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Home / Business / Companies / Airlines

Air NZ expands Dreamliner fleet

Grant Bradley
By Grant Bradley
Deputy Editor - Business·NZ Herald·
8 Dec, 2014 04:00 PM3 mins to read

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Air New Zealand was the launch customer for the Boeing 787-9 Dreamliner. Photo / Peter Meecham

Air New Zealand was the launch customer for the Boeing 787-9 Dreamliner. Photo / Peter Meecham

Air New Zealand will buy two more Boeing 787-9 Dreamliners and is looking at new places to fly.

The extra planes will take the total number in the fleet to 12 within the next four years.

The NZX-listed airline was the launch customer for the 9-series, the second version of the fuel-efficient plane, and has had three already delivered. They have been used on Australian and Asian routes for the past three months.

Air New Zealand is nearing a decision on a new United States route in addition to Los Angeles and San Francisco and chief executive Christopher Luxon said a new global destination would be announced soon.

"We hope to make an announcement around a new market before Christmas."

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He has said previously that a South American country was missing from Air New Zealand's route map and yesterday said this was still being studied. India was also suggested as a possible destination when the airline first opted for the Dreamliner and that country is seen as a growth market.

The airline is benefiting from strong demand and falling fuel prices and is on track to improve significantly on last year's $244 million profit.

"We can only open up new markets because of the profits. We only buy these aircraft because of that," he said. "All the investments coming into our business are quite profound and putting us on a very aggressive growth platform. It's profitable growth."

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Being the launch customer for the 787-9 meant the airline was able to get a good deal on the planes it ordered originally. Unlike some other airlines, Air New Zealand stuck with the plane maker throughout years of delays in developing and building the Dreamliner.

"I think we're getting a really good deal with it. Being in with Boeing from the very beginning was very helpful."

The airline was also able to access cheaper funding compared to most airlines because of its relatively strong credit rating.

The planes are made up of about 50 per cent carbon fibre and typically sell for between $150 million and $200 million.

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Christopher Luxon says the Dreamliners are exceeding performance expectations. Photo / NZME.

Luxon said Dreamliners already in service were exceeding performance expectations.

"We love the aircraft, it's gone slightly better than we expected and we had pretty high expectations."

On the Auckland-Perth route there had been a "significant" uplift in traffic as passengers opted to travel on them.

New destinations being considered in the United States include Chicago, Houston and Las Vegas and the decision is seen as a close call.

More Dreamliners gave the airline more opportunities in North America and in other countries, he said.

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"For us there's a number of options - we could put them on 777 routes and redeploy them [777s] elsewhere or put them into new locations."

The two additional aircraft are expected to be delivered in late 2017 and the latter half of 2018 respectively. The airline has another six 787-9 purchase options still available.

Salt Funds Management director Paul Harrison said the aircraft were perfect for the airline's long, thin routes - where there were not huge passenger volumes.

Harrison said flights into South America were more likely in partnership with another carrier. New routes required roughly $50 million in revenue a year to make them profitable.

Air New Zealand shares closed down 1c at $2.38 yesterday after a 22 per cent surge last month.

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