Airline gets us comfortable first

Air New Zealand's international boss says if the airline's new lie-flat economy seats and upgraded premium economy class prove popular it may provide an opportunity to increase prices.

Yesterday, the national carrier unveiled the cabin designs for its new 777-300 aircraft, due to start arriving in November. The redesign includes the Skycouch, the world's first lie-flat economy seat.

Chief executive Rob Fyfe said Air New Zealand flew a disproportionate number of long-haul routes with 70 per cent of its passengers being visitors to the country, so the project team was set the challenge of developing a new category of air travel.

General manager for international Ed Sims said the aims of the redesign were to create more demand for the airline's services and for New Zealand, and to generate more revenue.

The airline would start with broadly similar pricing for the new seats as its current services. "But if demand runs away with us then clearly it gives us greater flexibility."

Sims said the airline aimed to build on its history of innovation, such as being the first in Australasia to introduce a fully lie-flat bed in the premium economy class.

"We had to push ourselves to invent a New Zealand product. We were like technically capable but confidently lost male drivers - we were not going to ask directions if it killed us."

Fyfe said executives had visited Boeing's seat gallery, where airlines look for products to fit out their cabins.

"To be quite frank ... we were underwhelmed."

Initial designs by the Kiwi team included staggered seating, where the middle seat in a row of three was moved forward, creating more leg room. However, in testing passengers had described feeling as if they were in "crowded isolation". Plans for bunk beds were also rejected as being too technically difficult at this stage.

Air Transport World magazine senior editor Geoff Thomas said the airline was providing something different from everyone else in that it was offering passengers five or six different comfort choices.

Instead of having to upgrade to a business class ticket if they wanted to lie flat, they could now choose the more moderately priced Skycouch.

"It will be very interesting to see what people will be prepared to pay."

Rob Mercer, head of research at Forsyth Barr, said Air New Zealand's innovativeness had helped it to stay relatively profitable during the economic downturn and this was a progression of that. "It's all about trying to be ahead of the curve."

The airline was reliant on people flying ultra-long haul, so the discount model as developed by European carriers did not suit a New Zealand product.

Shares in Air New Zealand closed down 1c at $1.19 yesterday.