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.
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.
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