Air New Zealand - images of new long haul

How the Skycouch works (folding up from under the seat).










Premium Economy looks closer to some business class designs, although the recline is little different:


















Business Premier looks little different:























Video summary of all products


Full Air New Zealand image set on flickr

Air New Zealand new long haul - compared with the competition?

In economy, skycouches can’t be beaten. For those not in skycouches it becomes a different story. For legroom and seat width, both Thai and Malaysian beat NZ with wider seats and marginally more legroom in economy. However, NZ easily beats Qantas and Cathay with two inches more legroom and comparable seat width. Emirates is probably on a par with NZ, which is frankly a slight step backwards.

In premium economy the only competitor is Qantas, and with this NZ has slipped ahead a couple of notches. With Cathay and Malaysian airlines both announcing premium economy products, it will be a segment of the market that will be moving ahead. Of course on both of the London runs, BA and Virgin compete for the LA and Hong Kong routes from London, but NZ beats both. Certainly the catering offer in premium economy remains the best. NZ’s main competition is probably cheap business class on the likes of Royal Brunei (although it is a three stop service to London!).

In business premier Singapore Airlines remains the standard to beat on flights to NZ. With such wide seats, privacy, large entertainment screens and seating parallel to the cabin, on its 77W flights to/from Auckland (not the 77E flights to Auckland and Christchurch), it has in my view, the superior hard product. However, NZ still soundly beats the rather narrow cheap version of the same seat concept on Cathay, whereas Malaysian, Korean and Thai still have sloping lie flat seats on flights to NZ. Qantas only has fully lie flat seats on the A380s, which are only some flights to London, although BA has long had fully lie flat seats on all long haul flights in business. Emirates has a mix of fully flat and recliner seats on routes from NZ to Europe, although A380s are consistently with fully flat products. However, NZ’s proposed food offering will easily excel all of them.

For catering, NZ will clearly be the market leader in its part of the world. Only a few airlines, like Austrian, go for cooking food fresh, it isn’t cheap, but it makes a major point of difference from other airlines. It will be a significant reason to use NZ over other carriers in the front cabins.

For entertainment, it will be another step forward, with larger entertainment screens in at least economy and premium economy, and an improved system. It will be up with the current best, although it is unclear if there will be USB ports to charge MP3 players and laptop power at every seat.

Still, it keeps NZ ahead of the game, and gives some further potential to move forward when the 787s arrive.

Air New Zealand new long haul - soft product and entertainment

The news here is primarily in catering.

New ovens allowing food to be freshly cooked, with indications this can include steak, bacon, eggs and pizza. Business Premier customers will be able to order on demand food the way they want it. Premium Economy looks like having a similar option. Undoubtedly compared to reheating food, this is a major step up from the status quo. Although eating on demand in business class is increasingly available, it is typically seen in first class.

No doubt economy class food will still be reheated, as there would not be enough time to do anything else. However, being able to order snacks and drinks on demand will be a challenge for the cabin crew. Crew will face the challenge of people ordering drinks more easily than at present (easier to select on a screen than to push a call button and ask for service), but also cooking rather than heating meals.

A new entertainment system will be installed, using the Panasonic system now installed on 767s and A320s. Screens in economy will be 2” larger than at present, and it will be touchscreen. Without hard shell seats in economy, this could be a nuisance particularly with children behind a passenger. However, one innovation will be the use of the system to indicate when meals are to be served, what is available and when lights will be turned down. This additional information for travelers will be a nice touch. It also looks like all seats have power points for laptops and MP3 players.

Bathrooms have been redesigned, hopefully premium bathrooms will have more room and it is interesting to see NZ following Lufthansa in having opening windows in bathrooms.

So overall some useful tweaks, although I'd be interested to know the size of entertainment screens in premium economy and business premier. The latter now has screens smaller than the latest products by Singapore and Emirates.

Catering is the most exciting change though. It is an area Air NZ has decided differentiates itself clearly from the competition, and is an opportunity to be innovative and get a reputation that premium travellers will appreciate.

Verdict: Potential for NZ to be world leader in business class catering, it already is in premium economy (serving business class food). In Economy it's already good by industry standards. Entertainment system largely a tweak, but the introduction of inflight information through the system regarding food, lighting and the rest is a good step forward. Gets an A.

Air New Zealand new longhaul - Business Premier

It’s fair to say there is nothing revolutionary about what NZ is planning here. It is essentially the same herringbone configuration, just with some tweaks of the seats. The big leap forward is the catering (described elsewhere).

One of the main criticisms of the NZ (and VS, and to be fair CX and AC) product is the lack of storage space and the inability of passengers to look out of the windows. That hasn’t been addressed, which is presumably because to do so would mean less seats. However, NZ has had substantial success with this product as it is, and it still beats most of its competitors. The story hear is evolution not revolution.

Verdict: An already good product significantly improved with catering upgraded. Not the best in its class, but certainly in the top five. A "B" for the improvement, and it's all about catering.

Air New Zealand new longhaul - Premium Economy

By increasing the size of premium economy to 50 on the 77Ws compared to 39 on 747s (and 36 on 77Es) Air NZ is betting on this being a class for substantial growth. The new premium economy class looks like it will be setting new standards for this class.

New Premium Economy on 777-300ER

It's fair to say Air NZ's existing premium economy hard product didn't involve much imagination. On 747s it is the economy class seat, with an inch or so more width, and much more seat pitch with double the recline. However, it is in essence, the same recaro economy class seat. One of the advantages has been the cabins, with the upper deck and the small side cabins in front of economy on 747s offering quietness and exclusivity in themselves, as well as side storage bins for luggage.

However, on 77Es premium economy is about legroom, with 10 inches more seat pitch and more recline, but the same width. The 3-3-3 configuration on existing 777s has been criticised for being below the standard of other airlines with premium economy. Notably BA's 77Es have a 2-4-2 configuration with wider seats. Air NZ is quite wrong in its press release claiming 3-3-3 is the industry standard for premium economy.

I had predicted Air NZ would remove a seat in each row for premium economy, but it has gone much further. It is now 2-2-2. Only BMI offers such a configuration in premium economy, and it doesn't fly anywhere near NZ (and it is basically offering its old business class).

The new seats are in hard shells and face away from each other, creating a degree of privacy. A key innovation is that pairs of seats can either be treated as separate, or the space between them used for couples to share meals or to lounge. These options help to establish the product as being seriously superior to economy.

Instead of a footrest, passengers get a beanbag to rest their feet on, which will be interesting to see how successful it might be.

The degree of recline is not a step up from the current product though, it is 9". That sadly does not bring it up to the level of BMI's A330s, and only matches the likes of Qantas. There is no doubt this is a better seat than Qantas, but to really be an economy version of business class it would need to offer a recline of around 45 degrees to passengers.

However, the seat pitch is apparently 36" according to the LOPA. Given premium economy on 747s is currently 38" and on 777s it is 42", this is a significant sacrifice of legroom. Maybe the configuration makes up for this, but we will have to see.

All in all it looks good, offers more comfort and privacy, but an alternative to business class it isn't. By no means is this a substitute for a lie flat bed, or indeed given some airlines offer cheap deals in business class (though usually not fully lie flat products), that would be preferable to premium economy.

Verdict: A serious improvement to the previous product, with wider more private seats, more flexibility and a improvement in catering. It would get an "A" if the pitch wasn't being sacrificed, but it is. So I'm going to say a B.

Air New Zealand new long haul - Economy skycouches

The big news has been the announcement of the skycouches in economy. However, it is worth reviewing the total hard product that has been announced.

First, beyond the hype about the Skycouch is the rest of the cabin.

Seat pitch (distance between rows) is one inch LESS compared to the 747 fleet, but one inch MORE than the 77E fleet. Given the product is for aircraft replacing 747s, this is a minor, but noticeable step backwards.

Seat width is between 0.5 and 0.8 inches less than the 747 and the 77E fleet. With an extra seat squeezed into a cabin that is currently 3-3-3 as the industry standard in economy, Air NZ is putting itself in league with other width thieving airlines like Emirates and Air France/KLM.

In other words, it isn't a step up for those NOT in skycouches.

Secondly, it looks like arm rests will finally be able to be folded fully back between seats, so passengers with a spare seat beside them will be able to stretch out, even if it is not a skycouch.

The Skycouch itself is in the first 11 rows of economy on the window sides only, and appears to involve an extension of the seat base so that a flat couch surface can be established across three seats. It wont be available in the middle three seats, presumably because there is no convenient surface for passengers to rest their heads. Clearly the ability to do this is a step change in flying economy class, because it will allow passengers to fly in a Z position (it wont be long enough to be fully stretched unless you're quite short).

So who might be able to do this? Well it is clear that it is aimed at couples who buy two economy seats, and can pay half price for the third seat. Whether individual travellers can do the same is a good question, although it would be cheaper to buy premium economy seats, the question is whether it is better to get the flat surface than the reclined one of premium economy.

For couples this makes a serious difference, for a premium that is a fraction of paying for both to go premium economy, let alone business premier, they will be able to lie flat. Compared with the small recline available in economy usually, this is a different world for most tourists. For those travelling together who aren't so "intimate" it might be less compelling.

NZ has anticipated the biggest risk of the whole idea - the mile high club. The press release states:

"For those who choose, the days of sitting in economy and yearning to lie down and sleep are gone. The dream is now a reality, one that you can even share with a travelling companion - just keep your clothes on thanks!"

The big question will be whether enough will do that to justify setting aside such seats. If they get filled up regularly, it will have made a difference, as long as the pricing makes it more profitable than the average loading across three seats.

Air NZ will be keen to avoid it cannabilising revenue in the front cabins. I suspect that is why exact details on pricing, and whether Airpoints upgrades might include this option, will wait until April 2010.

Seat recline is the industry standard 6", without hard shell designs it will encroach somewhat on the skycouch area.

So in summary, for couples willing to pay this product offers a seriously improved alternative that puts Air NZ beyond all others in economy. For everyone else, it is a small step backwards, although other product improvements (entertainment, catering) are positive.

It is worth noting there remains nothing equivalent to NZ's Space +, which is available on the 767 and A320 fleet.

It is fair to say NZ has successfully generated enough hype and publicity about its new cabin to offset the negativity, but don't forget, a maximum of 44 people will benefit from the Skycouches. 180 will be getting less width and legroom that they do today on the 747s.

Verdict: The Skycouch has to be a winner in attracting business, differentiating the product and increasing yields. I suspect it will take couples business away from premium economy, as a flat surface for two is better than reclining for two. For everyone else, it wont make much of a difference, but if you wanted legroom and seat width, it will be tighter. A for Skycouch a D for everyone else.

Air NZ's new product - the business case

With the coming arrival of the Boeing 777-300ER (77W in industry shorthand) to replace the increasingly dated and fuel thirsty Boeing 747-400 fleet (average age 15 years), Air NZ decided to significantly refresh its long haul product. The five new 77W will operate on the Auckland-LA-London route, and also provide extra capacity for other flights to LA, San Francisco and Vancouver. If British tourists start returning to NZ, the Auckland-Hong Kong-London route may also get them in due course.

Air NZ has also said it would retrofit its smaller Boeing 777-200ER fleet with similar products, and it is likely the Boeing 787s will get something similar again. However, the timeframes for them (and the likelihood they will operate on some medium haul routes) will mean that is less certain.

Air NZ is the market leader on all of its long haul routes bar one (Hong Kong), but to be fair there aren’t many long haul routes and competition on them varies considerably.

By far the most competitive route is Auckland to London, as the various options to travel that route are wide ranging depending on the transit airport and the number of stops travellers will tolerate.

For one stop service to London Air NZ has the following competitors:
- Cathay Pacific
- Korean Airlines
- Malaysian Airlines
- Singapore Airlines
- Thai Airways and;
- arguably Qantas/BA (via LA, although this transfer requires offloading bags and checking them back in, which is far more than the Air NZ route via LA requires).

For two stop there are also:
- Qantas/BA (codesharing on each others flights via Melbourne, Sydney then Bangkok, Singapore or Hong Kong);
- Emirates (via Australia and Dubai)

If you’re game you can go three stop with Royal Brunei, and there are various other permutations involving codeshares with different carriers.

Air NZ has one competitor on two routes (Hong Kong and LA with Cathay and Qantas respectively), but none on direct flights to San Francisco, Vancouver, Tokyo, Osaka, Shanghai or Beijing.

That’s it. So Air NZ simply has to be better than Qantas and Cathay on the one hand, and then seriously differentiate itself from the rest. Of the rest, Singapore and Emirates compete on quality, although Emirates has significant product inconsistency between planes and is a two stop route to Europe (although has the advantage of many different destinations in Europe through Dubai). Korean, Malaysian and Thai price themselves to be cheap, although all are quite good airlines.

So for the one stop premium end of the market, NZ has to look at Cathay and Singapore Airlines and do better. It has dominated the premium economy market (only Qantas offers an option to LA and only recently), but in economy it simply can’t compete on price, so is to compete on quality. With new seats and new catering options, there is little doubt it is testing, a rather small market, for some game changing ideas. Given Air NZ’s small fleet, and the timeliness of the fleet replacement, it is in a position to try out such new products on some of the longest airline routes in the world, with relatively low exposure to capital and risk.

The question will be whether it sets the bar for others to follow. If it is highly successful, it will prove lucrative not only on NZ focused routes, but the highly competitive London-Hong Kong and London-LA routes, where fares charged are almost as high (and in premium classes sometimes higher) than London to NZ. If it can make both of these routes serious money spinners, and licence the updated products to sell to other carriers, it will have shown a level of innovation and business acumen rarely seen in state owned airlines – with perhaps the obvious exception of Singapore Airlines.

It's worth noting these comparisons:

Air NZ current 747 configuration
Business Premier 46 seats (1-2-1 lower deck, 1-1 nose, 1-1 upper deck)
Premium Economy 39 seats (3-2 upper deck, 2 on sides lower deck)
Economy 294 seats (3-4-3 configuration)
TOTAL 379 seats

Air NZ current 777-200ER configuration

Business Premier 26 seats (1-2-1)
Premium Economy 36 seats (3-3-3)
Economy 242 seats (3-3-3)
TOTAL 304 seats

Air NZ new 777-300ER configuration

Business Premier 44 seats (1-2-1)
Premium Economy 50 seats (2-2-2)
Economy 246 seats (including 66 able to be converted into 22 skycouches) (3-4-3)
TOTAL 340 seats

UPDATE:

Worth noting here are some images of the internal configuration.

The LOPA (Layout Of Passenger Accommodation) shows business premier as usual, but premium economy in a staggered arrangements by the windows offering more privacy. Economy is confirmed to be in a 3-4-3 arrangement. The latter is rather unfortunate.

ANA is the current leader across all classes

On the eve of Air New Zealand announcing apparently groundbreaking new long haul products, and JAL going bankrupt, it is worth noting the airline I think has the most consistently good products across all classes.

Japan's second carrier - ANA

A first class product that competes well with all, perhaps only surpassed by the Singapore Airlines Suites on the A380.

A business class product that i think is second to none.

Premium economy with fixed shell seat backs and which is only surpassed by BMI using old deep recline business class seats.

Economy class with fixed shell seat backs and 34" seat pitch (which is only matched by Air NZ on 747s, Thai and Malaysian for seat pitch, but not seat design).