What lies ahead: Aviation

Next year is shaping up to be a year of new planes, new uniforms and a return to dividends for Air New Zealand.

The first of its new fleet of Boeing 777 long-range jets are due for delivery in October, as the airline embarks on a $1.8 billion programme to replace its dated fleet of Boeing 767-300 jets.

They will be especially welcome on the New Zealand-Asian routes, where passengers expect better inflight entertainment than a distant movie screen showing a family favourite.

Longer range means new routes, so 2005 should be the year that new Chinese destinations - probably starting with Shanghai - are introduced.

A $20 million per plane refit of the Air NZ Boeing 747-400 fleet also begins this year, with new interiors, crew uniforms and inflight entertainment.

Air NZ is buying four of the new 777s and leasing the other four. The eight new aircraft will begin arriving in October 2005, with the last to be delivered in September 2006.

The company will be watching closely developments around its other, bolder aircraft order - the Boeing 7E7, which is under development and is yet to fly.

Boeing has put a lot of stock in the new 7E7, that - through the use of less aluminium and more carbon-fibre composite materials - will be much lighter than other aircraft.

Air NZ last year became only the second airline in the world to agree to buy the 7E7.

Japanese carrier All Nippon Airlines ordered 50, and Air NZ said it would buy two. A third carrier, Japan Airlines, has just signed up for 50 of the new planes as well, taking some of the pressure off Boeing as it waits for more to follow suit.

A new plane that is too big (and probably too expensive) for Air NZ is the Airbus A380, the double-decked, 550-seat behemoth, being unveiled in France next month. Singapore Airlines, Qantas and Emirates, all of whom fly here, are buying the new plane, designed to increase capacity on the world's busiest routes.

The A380 has already overhauled the legendary Boeing 747, with orders for passenger versions of the US-built workhorse almost totally dried up.

Airlines want new, more efficient planes, but paying for them is the problem. The International Air Transport Association (IATA) estimated the global airline industry would lose between $US3 billion and $US4 billion in 2004.

These losses were due largely to surging oil prices cutting benefits from growing passenger numbers.

After three years of crisis - with large US carriers slowly drifting into bankruptcy - the unexpected jump in oil prices came as a rude shock, with IATA originally predicting the industry could break even or post a profit in 2004.

Next year may mark the first time in a long while that stories about Air NZ's financial performance will be written without including the words "back from the brink".

It plans a return to dividends in 2005 which the taxpayer, having already bailed out the airline to the tune of $1 billion, may find even more attractive than a personal video screen.