\u201cThat\u2019s from the heights of having 20% of our jet fleet grounded down to now just two aircraft.<\/p>\n
\u201cWe\u2019re now almost down to one grounded aircraft on both of our fleets. So we\u2019ve had our Rolls-Royce engines go through the Rolls-Royce engine shop and come back, a couple of them as quickly as in 35 days, which is a massive improvement to what we\u2019ve been seeing in the past.\u201d<\/p>\n
One widebody, a 787 with a Rolls-Royce Trent 1000 engine, was still grounded.<\/p>\n
The airline has announced cutbacks<\/a>, understood to be at management level just below C-suite.<\/p>\n But Ravishankar said: \u201cWe\u2019ve held a lot of labour capacity, particularly in the operations, cabin crew, pilots, engineers, in anticipation of having these [aircraft] returned to service.<\/p>\n \u201cIf anything, the thing that\u2019s suppressing demand at the moment is the fact that the fuel price is as high as it is.\u201d<\/p>\n That especially impacted inbound demand, he said, for both transtasman and longer-haul routes.<\/p>\n He said between now and the end of the next financial year, in June 2027, Air NZ would fluctuate between full strength and two jet aircraft not in service.<\/p>\n That depended on how many engine cycles were left in each aircraft and when they needed to go \u201cback into the shop\u201d for maintenance. <\/p>\n Please un-lease me<\/p>\n Air NZ should also be unbound from some engine leases.<\/p>\n \u201cTo deal with the engine issues … we ended up leasing a lot of spare engines, so on the Pratt & Whitney Neo fleet, we had at least an extra 15 engines on top of what we required.<\/p>\n \u201cNormally, we would have a fleet of 44 engines because we have 20 Neos. Instead, we have 59 engines.\u201d<\/p>\n He said the rule of thumb was two engines per aircraft, and then 10% spare.<\/p>\n \u201cSo getting back to the 44, 45 sort of level, that\u2019ll take another a year and a half.\u201d<\/p>\n By the end of 2027, those extra costs for the narrowbody leases should be released, he said.<\/p>\n In the widebody fleet, he said the airline couldn\u2019t lease engines in a similar way so had to lease four aircraft.<\/p>\n Three were dry leases from Cathay Pacific. One was a wet lease from a different provider.<\/p>\n In dry leases, an airline typically got the aircraft but had to take care of crew, maintenance or insurance itself.<\/p>\n One dry lease would be gone by this October and other widebody leases by the end of 2027, he said.<\/p>\n The airline would benefit from a tax tweak announced in last month\u2019s Budget<\/a>, where the Government ditched a tax for dry leasing aircraft parts.<\/p>\n Ravishankar said two new Boeing 787-9s<\/a> were going through certification now.<\/p>\n \u201cSo we\u2019re expecting to have them flying from November this year.\u201d<\/p>\n As for regional routes, the Herald asked if the airline could commit to retaining every single point-to-point route in New Zealand. <\/p>\n \u201cEven through the fuel crisis, we have retained all of the routes.\u201d<\/p>\n He said consolidations or frequency reductions on those routes were related to recent high jet fuel prices.<\/p>\n \u201cRegional aviation is extremely important to New Zealand and we should all be working together to ensure that we can have a thriving air connectivity solution for the country. <\/p>\n \u201cAnd the good thing is, we are all working together, there\u2019s a lot of effort going on behind the scenes, a lot of great engagement.\u201d<\/p>\n He said regional airports, local governments, and central government were engaging on the issue.<\/p>\n He said he was confident that work would yield \u201cgood results\u201d.<\/p>\n MORE FROM RIO: World airline summit: Should NZ carriers get handouts to save routes?<\/a><\/p>\n Tourism<\/p>\n The Iata summit heard the Northern Hemisphere summer outlook was looking promising.<\/p>\n That would largely affect North America-Europe traffic, or people leaving Europe for a variety of their summer getaways, Ravishankar said.<\/p>\n But he said for New Zealand\u2019s peak, what Iata called the northern winter, inbound demand was expected to be strong.<\/p>\n He said tourism was becoming a more dependable earner for the country.<\/p>\n \u201cWe\u2019re seeing a very steady growth in that space, which is very encouraging actually, not just for Air New Zealand, but for New Zealand.\u201d<\/p>\n He said one area for improvement was \u201cbreaking the seasonality cycle\u201d so a smoother flow of visitor arrivals occurred throughout the year.<\/p>\n \u201cIt\u2019d be good to break seasonality and the other thing we need to really work hard on is dispersal of tourists around the country.\u201d<\/p>\n He said tourism numbers were currently concentrated in just a few locations.<\/p>\n \u201cThis is where our regional turboprop business is such an asset for the tourism sector.\u201d<\/p>\n \u2018Gouging\u2019<\/p>\n Iata director general Willie Walsh blasted manufacturers as the global airline fleet reached averages of more than 15 years old. <\/p>\n Walsh in Brazil today said his views of supply chain delays might not be suitable for polite company.<\/p>\n But then he told the crowd there was no need to be polite.<\/p>\n \u201cStop gouging us and get back to making great engines that work and that last.\u201d <\/p>\n He added: \u201cThe aerospace supply chain continues its failure to deliver engines and aircraft parts.\u201d <\/p>\n Walsh said most engine manufacturers had booming profits, in contrast to airlines\u2019 wafer-thin margins.<\/p>\n The airline leader directed ire at OEMs (original equipment manufacturers) and especially engine makers.<\/p>\n He said the ageing fleet meant added costs for maintenance and fuel, as a backlog included fewer new fuel-efficient aircraft.<\/p>\n Walsh said worldwide, airline profits were down about half this year.<\/p>\n He said the airline business had been reeling from record-high jet fuel prices but demand was at least holding up.<\/p>\n Iata today said airlines would have a combined total net profit of US$23 billion ($39.7b) this year, down from the previously expected US$41b.<\/p>\n \u201cIt is also roughly half the US$45b net profit estimate for 2025.\u201d<\/p>\n Worse than Covid?<\/p>\n Asked if the current situation was as bad for aviation as Covid was, Walsh was emphatic.<\/p>\n He said the airline industry was still profitable, and resilient, whereas at one point in 2020 the industry was 95% grounded.<\/p>\n \u201cAviation changes the lives of over five billion travellers annually.\u201d<\/p>\n He said the sector employed 86.5 million people.<\/p>\n \u201cAviation makes the world a better place by bringing people together,\u201d he added.<\/p>\n AGM-related events continue in Rio de Janeiro this weekend, Brazil time.<\/p>\n Iata announced next year\u2019s AGM will be in the southeast Chinese city of Xiamen.<\/p>\n The next Iata director general is yet to be announced. A press briefing heard a decision may still be several weeks or more away.<\/p>\n -The Herald travelled to Brazil courtesy of Iata and Latam Airlines.<\/p>\nWillie Walsh, Iata director general. Photo \/ Money Sharma, AFP, File<\/p>\n