Air New Zealand says it will ground all Boeing 777 passenger flights until April 2021, with the Boeing 777-200s potentially facing an earlier retirement as new Boeing 787-10s join the fleet – although delivery dates for the Dreamliners have also been pushed back slightly.
While one of the airline's 16 Boeing 777s has been converted to a dedicated cargo freighter by removing all the seats, an internal Air New Zealand staff communication forecasts "a relatively slow return of demand to international travel, with no passenger flying on the 777 until April 2021."
"The use of the 777 fleet will largely be determined by the rate of border reopening," Air New Zealand Chief Revenue Officer Cam Wallace tells Executive Traveller, which he expects to be a gradual process on a per-country basis.
"There'll be some different countries potentially that we can travel to first, rather than a generic opening of the borders, they'll open up in an incremental way," Wallace predicts.
"One of the things we don't want to lose sight of, in the medium to long term, is we don't want to leave ourselves so constrained with the aircraft that we don't sense or execute an opportunity – because at some stage the markets will re-open and at some stage we will see demand coming back."
"And I suppose we've got to balance the now, which is making sure we survive, while in the medium to long term we want to thrive. And that's about making sure we're flying to the right markets with the right equipment at the right time, so we can capture opportunities."
Non-stop to New York
The sheer unpredictability over how and when international travel will restart is also reaching forward to the opening of new routes.
A red-letter day on Air New Zealand's 2020 calendar was to have been the October 29 launch of non-stop flights between Auckland and New York, with a Boeing 787-9 – reconfigured to carry more premium passengers and a lower overall headcount – making the 14,200km marathon journey.
With wry understatement, Wallace now suggests "there's probably not as much demand as there was a few months ago."
"We haven't made any announcements but that's looking very, very challenging," Wallace admits. "We clearly want to go to that market, but we've got to do the level of preparation to make sure it's a good entry, so that's looking under a lot of pressure."
Boeing 787-10s pushed back
With the shape of Air New Zealand's operational fleet being "very sensitive to underlying demand and when borders open," this could also change the future make-up of the long-range fleet.
The Kiwi carrier has eight of Boeing's largest 787-10 on order, and each Dreamliner joining the fleet would eventually see a Boeing 777-200ER put out to pasture.
"We've already pushed those orders back a little bit," Wallace says of the Boeing 787-10s, which were previously due from late 2022.
"We have fleet flexibility. Our team and financing fleet are working through the options in terms of what are the different scenarios if we did make some changes to those delivery dates, or would it be better taking them and just not flying some of the older fleets."
Hitting pause on new business class
A necessary focus on short-term survival has also put the brakes on the airline's launch of all-new business class seats, slated for the Boeing 787-10 as well as a retrofit to some of the Boeing 777 fleet as a replacement for the current decade-old sleepers.
They're been under development since mid-2018 at a secret secure facility dubbed 'Hangar 22' near the airline's Auckland headquarters, where selected AirNZ passengers –including some of its most frequent long-haul flyers – have been invited to sample the new seats.
This includes conducting simulated flights over the course of a weekend, so the product development team can study how passengers move through different transitions of work, rest and sleep.
"Like all airlines we've put a pause on capital expenditure, our focus is on getting our costs down as quickly as we possibly can," Wallace says.
"We still have aspirations for new products and new services as new planes come in, but that's work for a later date. We're just managing our way through this crisis at the moment, but that will be top of mind once we get some more stability in the business."