Quay Tower
29 Customs Street West
Auckland
New Zealand
Company Perspectives:
The Air New Zealand--Ansett Australia Group operates a competitive network serving key gateway airports of the Asia-Pacific region. The Group flies to more destinations in Australia, New Zealand and the South West Pacific than any other airline.
History of Air New Zealand Limited
Air New Zealand Limited (ANZ) is New Zealand's largest airline. The acquisition of Ansett Holdings has made ANZ one of the 20 largest air carriers in the world. Marketing alliances with numerous airlines, including United Airlines, Lufthansa, and British Midland, bring it traffic from around the globe; ANZ carries approximately eight million passengers a year. In addition, the company operates subsidiaries involved in a range of businesses, including cargo services, travel agencies, terminal services, and engineering services.
Operated as a government-owned airline until the mid-1980s, Air New Zealand established itself as the dominant national carrier, although its profit record was spotty. After bottoming out in the early 1980s, Air New Zealand was privatized beginning in the mid-1980s; healthy sales and profit gains ensued and even accelerated after the company became fully private in 1989. ANZ took on considerable debt in acquiring Australia's Ansett Holdings in the 1990s, and faces a well-funded and well-organized rival in Qantas.
Tasman Origins
Tasman Empire Airways Limited, the company that became Air New Zealand, was registered on April 26, 1940, as a limited liability company in Wellington, the capital of New Zealand. Its first flight occurred just four days later.
New Zealand's government originally owned 20 percent of the enterprise, while the remainder was held by regional airlines BOAC (38 percent) and Qantas (23 percent), and Union Airways of New Zealand (19 percent). The company started out as a specialty carrier, providing air service across the Tasman Sea (between New Zealand, Australia, and Tasmania) with 'flying boats.'
F.M. Clarke was the first general manager of Tasman Empire Airways. However, it was Sir Geoffrey Roberts, who joined the company in 1946, who became known as the 'Father of Air New Zealand.' Roberts served as general manager until 1958, and then as a director and chairman of the company during the 1960s and 1970s.
In 1953 the governments of New Zealand and Australia became the sole owners of Tasman Empire Airways, each with a 50 percent share. The New Zealand government bought out Australia's half in 1961, though, and became the sole owner of the operation. In 1965 the name of the company was changed to Air New Zealand Limited to reflect its status as a national air service provider. Throughout the 1960s and 1970s, in fact, the government invested heavily to make Air New Zealand a leading airline in the South Pacific. The company expanded with destinations throughout the New Zealand/Australia region and South Pacific Islands, but also to other locales in Asia and the West. During that period, the company logged millions of miles flying over water and forged a worthy reputation in the global airline industry as a safe and competent carrier.
Air New Zealand benefited during the 1960s and 1970s from government ownership. Besides having easy access to investment capital, the airline enjoyed protection from competing carriers in its domestic market. Despite deep pockets and protected markets, however, Air New Zealand eventually began to suffer from limitations imposed by the vast bureaucracy that engulfed the enterprise. High operating costs and a stifling management environment were hurting the company's performance. Intensifying the strain was the government decision to merge Air New Zealand and National Airways Corporation. The government had created National Airways in 1947, a few years after Tasman Empire was formed. That government-owned operation was initiated to provide domestic air service, as well as regional services to other South Pacific Islands. The two airlines were merged into a single entity called Air New Zealand (ANZ).
1980s Turnaround
The operations of National Airways burdened the resultant organization with even higher operating costs, such as big wages paid to union workers. The airline was losing money and, by the early 1980s, even the government recognized that something needed to be done to turn it around. To that end, in 1982 it brought in Norman Geary to serve as chief executive of the company and to whip the organization into shape. Geary succeeded Morrie Davis, who had been with Air New Zealand since the 1940s and had served as chief executive since 1975. Under Geary's direction, ANZ's financial performance began to improve. In fact, the company started posting profits in 1982 and continued to do so throughout the 1980s and into the early 1990s.
Geary was able to achieve gains at ANZ by reducing operating costs and boosting revenues. He accomplished that by convincing the government to back him up in key efforts, particularly related to labor negotiations, and by breathing new life into the company's marketing strategy. Soon after taking the helm, for example, he launched a route from Auckland to Los Angeles to London. He also purchased a new fleet of Boeing 747s and initiated an effort to boost ANZ's share of the Pacific tourist market. The government had sponsored studies that suggested that those moves would fail. Nevertheless, Geary was committed to the new strategy and was even able to persuade doubting bureaucrats to give him a chance.
As a result of Geary's efforts, ANZ rapidly improved. The new route to London, for example, sold out quickly, and Geary's efforts to boost profits from tourism paid off. Indeed, during the 1980s New Zealand became an increasingly popular destination for leisure travelers around the world. New routes, upgraded equipment, elimination of unnecessary overhead, and improved marketing helped the company to boost its number of passengers to more than four million annually by the mid-1980s. Meanwhile, operating profits rose to more than NZ$100 million. Geary was eventually credited with turning ANZ into an efficient, profitable carrier. In 1987, the last full year that Geary was in charge, ANZ's revenues increased to about US$800 million and total passengers served climbed to about 4.7 million (about 3.3 million international passengers and 1.4 million domestic).
Geary departed in June 1988 and was succeeded by R. James Scott. Scott was brought in to usher ANZ into a new era of privatization. Indeed, New Zealand's government had started privatizing much of the nation's air transport system in the mid-1980s, including airports and air traffic control systems. It also started moving ANZ toward privatization and preparing to open the New Zealand market to competition. To that end, it allowed a new air carrier called Ansett New Zealand (renamed Qantas New Zealand in 2000) to begin operating in July 1987. From modest beginnings, the start-up expanded rapidly into other routes dominated by ANZ. It initially managed to snap up as much as 30 percent of the market in some of those routes and threatened to pose a formidable long-term challenge to ANZ's domestic operations; some observers speculated that the government's decision to allow Ansett to compete eventually played a role in Scott's leaving ANZ.
Private and Public in the 1990s
ANZ completed its privatization in 1989. Its new owners included Australian rival Qantas, as well as Japan Air Lines and American Airlines. Those three companies owned 35 percent of the company, and Brierley, a New Zealand investment firm, controlled about 65 percent of the stock, much of which it had agreed to sell to the public. Thus, Air New Zealand was effectively free from government interference. With the domestic market increasingly open to competition and offering few growth opportunities, Scott planned to focus the newly private ANZ on international business. Tourism had been surging in New Zealand and surrounding areas, and Scott planned to boost the share of ANZ's revenues attributable to international traffic from about 60 percent in 1988 to 90 percent by 1993.
Specifically, Scott wanted to turn ANZ into a 'quality niche carrier' that dominated the markets and routes that it was most able to serve, rather than trying to compete with major international airlines in the most popular routes. ANZ's financial performance and passenger volume declined in 1990 and 1991, primarily as a result of diminished international traffic during the global economic downturn. But management undertook a number of new initiatives that buoyed the company. For instance, ANZ reached marketing agreements with major airlines that strengthened its commitment to the North American and South Pacific market; for example, services were added or augmented in Dallas, Honolulu, Toronto, and Vancouver. Those agreements, according to Scott, represented ANZ's intent to double in size by the year 2000.
James McCrea replaced Scott as chief executive of ANZ in August 1991. McCrea had joined the airline in 1956, in the engineering division, and worked his way up to general manager of airline operations by 1982 and then to deputy chief executive in 1989. He worked closely with Scott to ensure that ANZ operated profitably and efficiently. As chief executive, McCrea continued to pursue many of his predecessor's goals, although he reduced ANZ's growth forecasts. Instead, he planned to steer ANZ on a course toward steady passenger growth and healthy profitability, largely by cultivating international tourism traffic. Importantly, the company began to promote what it termed 'multidestinational regional tourism.' In other words, it focused on encouraging leisure travelers to fly ANZ into New Zealand or some other South Pacific destination, and then on to other locations along ANZ's South Pacific network--Hawaii, Fiji, Tahiti, Western Samoa, the Cook Islands--during the same vacation.
ANZ prospered under new management during the early 1990s and into the mid-1990s. Passenger volume rose from about 4.8 million in 1991 to 6.4 million in 1995. During the same period, sales rose 30 percent, approaching the US$1.5 billion mark for the fiscal year ended June 1995. More importantly, operating profits rebounded and vaulted to roughly US$150 million annually by 1995. The gains were primarily the result of increased leisure traffic, particularly in Asia, and new programs designed to take advantage of tourism growth. In 1992, for example, the Australian government allowed ANZ to establish a minor hub in Brisbane, feeding traffic from Asian gateways to New Zealand. In 1993 ANZ initiated service to South Korea. In 1994 and 1995, moreover, ANZ boosted the number of direct flights from Los Angeles to Sydney to five per week.
On a typical weekday in 1995, ANZ made 528 flights between 60 airports and 19 countries. In addition to its thriving airline business, ANZ managed to rack up profit gains from its diverse assemblage of subsidiaries and operating units. Among the most important of those entities was Air New Zealand Engineering Services, which alone generated about US$176 million in sales for 1994. Additional profit centers included a pilot training center, travel agency, information systems services, and catering and cargo operations. Other operations included ANZ's domestic airline operations, which continued to face challenges prompted by deregulation and increased competition. For the mid- and late 1990s, ANZ management was planning to continue building its international leisure business with a focus on Asia, as well as to pursue its strategy of multidestinational regional tourism.
New Alliances in the Late 1990s
In May 1996, ANZ unleashed an A$45 million 'Pacific Wave' marketing campaign, designed to position the airline as a leading Pacific Rim carrier. The next month, it was due to acquire a 50 percent stake in Ansett Australia Holdings. This acquisition seemed to alienate Qantas, which sold its 19.4 percent stake in Air New Zealand for NZ$426 million (A$373 million) in March 1997. A couple of months later, ANZ took full ownership of its Jetset Travel venture, which had lost millions in the hands of its former management.
Strategic alliances helped supply ANZ with traffic during the Asian financial crisis. However, ANZ was still forced to cut back its flights in Korea, a particularly hard-hit area, in early 1998. The crisis allowed the carrier to step up delivery of several new Boeing 737s as other buyers reneged on purchase agreements.
By this time, Singapore Airlines (SIA) had been making overtures towards an alliance with both ANZ and Ansett. In early 1999, ANZ and SIA struggled for control of a half interest in Ansett. During this time, Brierley increased its ownership in ANZ to 47 percent, near the 49 percent limit for foreign ownership (whereas foreign airlines could together hold no more than 35 percent). Brierley had moved its headquarters from Wellington to Singapore (and changed its country of incorporation to Bermuda), transferring some of its ANZ shares to local subsidiaries, which had local and independent directors on their corporate boards, making them sufficiently 'ring-fenced' for the satisfaction of the New Zealand government. However, it did raise some controversy; Alliance party leader Jim Anderton maintained 'ANZ should be renamed Air Asia because it is no longer a New Zealand airline in any meaningful sense.'
In February 2000, ANZ agreed to pay News Ltd. A$580 million plus 10.5 percent of its shares for the remaining half of Ansett Holdings. The impending arrival of Richard Branson's Virgin Express discount airline in the Australasian skies sped up the deal. Singapore Airlines had bought a 49 percent interest in Virgin Atlantic the year before. There had also been a management buyout offer on the table for Ansett. Yet another factor precipitating the sale was the appointment of Brierley's new CEO, Greg Terry, who felt his firm should begin to divest its ANZ holdings. Together, ANZ and Ansett had A$6.7 billion in assets and 24,000 employees, and likely much room for combining operations between them. ANZ management anticipated saving NZ$250 to NZ$350 million annually as a result of the merger.
SIA then aimed to ultimately increase its ownership of ANZ from eight percent to 40 percent and to gain board control of the airline. New Zealand's prime minister, Helen Clark, opposed the sale since it would have the appearance of giving control of ANZ to the government of Singapore (which owned 54 percent of SIA). Brierley took its 47 percent stake in ANZ off the market when ANZ's board discovered Qantas was also interested in it.
SIA bought an initial 8.4 percent stake in ANZ in April 2000 for NZ$140 million (A$116 million). The New Zealand government soon cleared SIA to increase its shareholdings to 25 percent, the maximum any single foreign airline was allowed to hold.
ANZ CEO Jim McCrea resigned in July 2000, a sign of SIA's growing control over the airline. By one count, annual profits had risen by a third to NZ$177.9 million (A$134.7 million) due to rising passenger counts. However, ANZ reported a NZ$600 million loss for the 1999/2000 fiscal year due to a change to international accounting standards. ANZ continued to show an interest in regional air services in Australia, bidding A$15 million for Hazelton Airlines Ltd., based in New South Wales, mostly because it needed Hazelton's slots at Sydney Airport to compete for its share of the lucrative business market.
Although ANZ executives had initially forecast good results for the 2000/2001 fiscal year, partly due to the Olympics, in the end higher fuel costs, unfavorable exchange rates, and increased competition pointed towards a substantial revenue drop. Gary Toomey, taking over as CEO in early 2001, faced a debt load of NZ$3.9 billion (A$3.05 billion), devalued share price, and formidable competition from well-funded Qantas. Toomey had been finance director at Qantas, where he was known for slashing costs; it was hoped he could apply some of the same winning formulas at ANZ.
Principal Subsidiaries: Aeropelican Air Services Pty Limited (Australia); Air Nelson Limited; Air New Zealand (Australia) Pty Limited; Air New Zealand Destinations Limited; Ansett Australia Limited; Ansett Australia & Air New Zealand Engineering Services Limited; Ansett Holdings Limited; Ansett International Limited (Australia; 49%); Blue Pacific Tours Limited (Japan); Eagle Aviation Limited; Jetset Travel & Technology Holdings Pty Limited (Australia); Kendell Airlines (Australia) Pty Limited; New Zealand International Airlines Limited; Safe Air Limited; Show Group Pty Limited (Australia); Skywest Airlines Pty Limited; Tasman Aviation Enterprises (Queensland) Pty Limited (Australia); The Mount Cook Group Limited; Traveland International Pty Limited (Australia).
Principal Divisions: Air NZ Domestic/Trans-Tasman & SW Pacific; Air NZ International; Ansett Domestic; Ansett International; Australian Regionals; Terminal Services; Cargo; ANNZES (Ansett Australia and Air New Zealand Engineering Services).
Principal Operating Units: Corporate; Commercial; Airline; Service.
Principal Competitors: Qantas Airways Limited.
Related information about Air New Zealand
Air New Zealand is a major scheduled passenger airline based in Auckland, New Zealand. It is the New
Zealand flag carrier, focusing on Australasia and the South Pacific, with services to Europe, North America and Asia, and a Star Alliance member.
Originally named TEAL (Tasman Empire Airways
Limited), its first flight was on 30 April 1940, with a Short Empire flying boat carrying 10 passengers from
Auckland to Sydney. Registered ZK-AMA and
named "Aotearoa", the
aircraft took around 7 hours 30 minutes to travel the 1345
miles.
TEAL's first annual report, dated 31 March 1941,
revealed that 130 trans-Tasman flights had been completed, 174,200
miles flown and 1461 passengers carried, with a profit of 贈NZ31,479
($NZ62,958).
During WW2 TEAL
undertook several special charter and reconnaissance flights to New
Caledonia, Fiji, Tonga, Samoa and Hawaii to assist the war effort.
NAC was formed from Union Airways and a number of other smaller operators,
and equipped with de Havilland Dragon Rapides, de Havilland Fox
Moths, Douglas
DC-3s, Lockheed
Electras and Lockheed 14s which initially operated inside New
Zealand. In the late 1940s NAC also provided international services
to nearby South Pacific
countries, using converted ex Royal New
Zealand Air Force Short Sunderlands. A former Royal New
Zealand Air Force PBY Catalina was used for survey flights. One of the
Solents is preserved in TEAL colours at the Museum of
Transport and Technology, Auckland.
TEAL's initial schedule of two weekly flights from Auckland to
Sydney was soon expanded to add departures from Wellington, and flights to
Fiji were also added during
the early years.
In 1953 the Australian
Government bought 50% of TEAL, with the New Zealand Government
buying the rest. In 1954 TEAL added the Douglas
DC-6 to its fleet,
and the landplane replaced the outdated flying boats on most
international services. The turboprop aircraft was capable of
carrying 71 passengers at nearly 400 miles per hour, and reduced
flying time on the Auckland to Sydney route to 3 hours 50
minutes.
In 1961, as the airline had become a successful company, the New
Zealand Government bought out the Australian Government's half
ownership, and on 1
April 1965 the airline
was renamed Air New Zealand.
The 1960s
Air New Zealand entered the jet age with the arrival of its
first DC-8 on
20 July 1965. The increased range of the
jets enabled Air New Zealand to commence services to the United States and Asia for the first time - on
14 December the
first Auckland to
Los
Angeles service took off, via Nadi and Honolulu. Erebus In 1970 Air New Zealand placed an order
for its first wide-body aircraft: the McDonnell Douglas
DC-10.
The first arrived in January 1973, and Air New Zealand continued to add to
its route network during the 1970s.
On 1 April 1978 the domestic airline NAC
(including its subsidiary Safe Air Limited) were merged into Air New Zealand,
which used the NAC NZ prefix for domestic flight numbers and the
Air New Zealand TE prefix for international flights until the late
1980s, when NZ became universal.
On 28 November
1979, an Air New Zealand
sightseeing flight crashed into Mount Erebus, Antarctica. In 1982 the first Air New Zealand flight to
London (via Papeete and Los Angeles)
took place. Qantas with
19.9%, Japan
Airlines 7.5%, American Airlines 7.5%, and a New Zealand
Government "Kiwi" share made up the balance.
Further expansion
In 1989 its first 747-400 was delivered, and in 1991 it received its first
767-300,
supplementing the seven 767-200s then in service.
The early 1990s saw new routes added:
- 1990: Kuala Lumpur, Denpasar, Bangkok
- 1991: Nagoya, Taipei
- 1993: Seoul
- 1994: Sydney - Los Angeles,
Osaka
- 1995: Fukuoka
Australia
After the success of the deregulation of the Australian domestic
air market in 1990, the Keating government announced that it would allow New
Zealand carriers unlimited access to the Australian market.
Expansion
In 1995 Air New Zealand added Fukuoka to its
Japanese destinations, and announced its long-standing plan to buy
50% of Ansett
Airlines, a significantly larger company than Air New Zealand
itself. The deal had been under discussion with both of Ansett's
owners since October 1994, and required some complex manoeuvering
to meet regulatory requirements on both sides of the Tasman,
including the sale of Ansett New Zealand, Air New Zealand's only significant
home market competitor (to News Limited) to satisfy New Zealand
Commerce Commission requirements ,and the sale of 51% of Ansett
International (to a consortium of Australian institutional
investors) to satisfy Australian Foreign
Investment Review Board requirements that, if not met, would
have meant the loss of Ansett International's bilateral air service
agreement rights.
The terms of the agreement saw Air New Zealand pay $A475 million
for half of Ansett, including a $A150 million capital injection,
and the transaction was completed on 1 October 1996.
A low-cost subsidiary, Freedom Air, began operations in 1996.
In 1997 South Korean
flights were suspended because of the Asian financial
crisis, and a small partnership was formed with United Airlines.
In 1998 EVA Air and Air
New Zealand jointly started operating Boeing 767 services between Taipei and Auckland.
In addition, Air New Zealand received three new Boeing 737-300s to operate on
flights between New Zealand and Australia.
During 1998 the company started selling all five of its 747-200
aircraft to Virgin Atlantic, with these being disposed of during
1999 and 2000.
Sir Selwyn
Cushing became the company's chairman after Bob Matthew stepped down,
and also in 1998 Air New Zealand announced alliances with various
airlines and the intent to become a member of the Star Alliance in 1999. Of
the two half owners, News Limited was more interested in selling
out and investing the proceeds in other industries, while Air New
Zealand did not have the funds to spare: with 102 aircraft, nearly
15,000 staff and a turnover of $US2.3 billion (as compared with Air
New Zealand's 72 aircraft, 9,200 staff and $US1.8 billion turnover)
Ansett's need for capital was greater than Air New Zealand's
ability to provide it?particularly given the age of Air New
Zealand's own fleet.
Singapore
Airlines (SIA) and Qantas expressed an interest in buying Air New Zealand,
Ansett employees planned a staff buy-out, and both SIA and Air New
Zealand looked at buying News Limited's 50% share of Ansett.
However as part of its original deal to buy TNT's half of Ansett,
Air New Zealand had a pre-emptive right to News Limited's half,
provided only that it matched or bettered other offers.
The Air New Zealand board eventually approved the sale to SIA, but
negotiations stalled when major Air New Zealand shareholder
Brierley
Investments began buying more Air New Zealand shares and
attempting to get SIA to buy Ansett through either Air New Zealand
or Brierley, rather than from News Limited. Industry observers were
united in the belief that it was a bad decision: the price was
probably too high, and Air New Zealand would not be able to fund
the badly needed re-equipment.
Former Qantas chief financial officer Gary Toomey was appointed Chief Executive Officer
of both Air New Zealand and Ansett Holdings in December 2000.
Services to Frankfurt
and Honolulu from
Los
Angeles were dropped, and were taken on by Air New Zealand's
Star Alliance partners Lufthansa and United.
In 2001 Air New Zealand announced plans to buy 16 new Beechcraft Raytheon Beech 1900D aircraft to replace its
Bandeirantes and
Metroliners, which
had served faithfully for 20 years, servicing airports without jet
capability.
To cover the loss of one third of Ansett's capacity, Air New
Zealand chartered Ansett a 767 and a 747 from its own fleet, and
additional aircraft were chartered from SIA, Air Canada, and Emirates. Deputy Prime Minister
Jim Anderton said "the idea of selling our national airline to
anyone would be an anathema", even though Air New Zealand was at
that time already 49.9% foreign-owned: 25% by Singapore Airlines,
and 24.9% by Brierley Investments, which was originally a New
Zealand-based concern but had relocated to Singapore in 2000, and
circumvented the foreign ownership restrictions by using a New
Zealand-based trust to hold its Air New Zealand shares.
The inconsistencies of national pride were not confined to the
eastern side of the Tasman: public opinion polls showed that while
New Zealanders were strongly opposed to Qantas buying into Air New
Zealand, and moderately opposed to SIA increasing its stake,
Australians were in favour of a Qantas buy-out of Air New Zealand
but objected to any further SIA ownership of Air New Zealand (and
thus Ansett) on the grounds that it would mean foreign ownership of
Ansett?forgetting that Ansett was already 100%
foreign-owned.
Meanwhile, Air New Zealand's financial position was
deteriorating, and Ansett was losing market share to both Qantas
and a new entrant on the Australian domestic market, Virgin Blue. the initial
$A120 million offer was deemed insufficient and in August Virgin
Blue owner Sir
Richard Branson, with his customary gift for publicity, put an
end to negotiations when he tore up on television what he claimed
was a $A250 million Air New Zealand cheque.
On 10 September
2001, in desperation Air
New Zealand offered to sell Ansett to Qantas for $1.
In an angry statement, Air New Zealand denied that there had
been a programme of last-minute asset-stripping, that it had put
$A200 million of Air New Zealand fuel bills through Ansett, cleaned
out Ansett's bank accounts, or taken Ansett engines and spare parts
to New Zealand.
New Zealand media criticised Australian media for "Kiwi
bashing", contrasting poor coverage of instances of Australian
protectionism and criticising pressure for New Zealand taxpayers to
prop up the uncompetitve Australian business.
Laid-off Ansett workers were eventually paid most of their
entitlements, partly from an $A150 million compensation package
offered by Air New Zealand in return for having the ASIC enquiry
dropped, but mostly by an $A10-per-seat levy imposed by John Howard's government on
Australian airline passengers.
Rebirth
In October 2001 the New Zealand Government announced that it
would provide Air New Zealand with an $NZ885 million rescue
package, and in return would take up 80% ownership. Gary Toomey resigned as CEO
the same month.
In early 2002 Ralph
Norris, formerly head of ASB Bank, one of New Zealand's main banks, was announced
as the new CEO of Air New Zealand, and commenced the difficult task
of pulling the airline back from near-death.
In mid 2002 Air New Zealand announced it would reconfigure its
domestic operations as a lower-cost airline, doing away with
business class and meals on most domestic flights, the longest of
which was an hour and a half. During July 2002, the airline
announced an order for 15 Airbus A320-200 aircraft, to replace Boeing 737-300 and Boeing 767-200 aircraft then in use on the Tasman. In late 2003
the Australian and New Zealand regulatory bodies both rejected the
alliance as being anti-competitive, despite a worldwide trend for
airlines to consolidate (such as the 2003 acquisition of KLM by Air France). Early indications are that this move
has also proved successful, with an estimated 10% increase of
bookings in the first few months of operation.
On 30 June 2004 the airline commenced non-stop
services from Auckland
to San Francisco,
the first new international destination for eight years.
In September 2004 Air New
Zealand was named Best Long Haul Airline in the seventh annual
Conde Nast
Traveller UK Readers' Awards.
On 20 September
2004 the New Zealand High
Court blocked Qantas' plan to buy 22% of Air New Zealand.
However, both Ralph
Norris and his counterpart at Qantas, Geoff Dixon, have stated
that the airlines will continue to assess other forms of
cooperation that will not conflict with competition
regulations.
In October 2004 SIA sold its remaining stake in Air New
Zealand.
Onwards into the future
On 2 June 2004 Air New Zealand announced its
fleet renewal plan, to acquire eight new Boeing 777-200ER and two 787-8 aircraft at a cost of NZ$1.35 billion, as well as
rights to purchase a further 42 long-haul aircraft. On 27 October 2005 it announced that it was
ordering another two Boeing 787-8 aircraft. On 11 May 2006 the
airline converted its four 787-8 orders to 787-9s - tt will be the first airline to
take delivery of the 787-9 variation, in December 2010.
Four of the Boeing
767-300 aircraft that
operated the services which the new Boeing 777-200ER aircraft now operate will be returned to their
owners when their leases expire, while the five that Air New
Zealand own will remain in the fleet for short to medium distance
operations until delivery of four Boeing 787-9 aircraft has been completed. From the end of 2006
the Air New Zealand longhaul aircraft fleet will consist of eight
Boeing 777-200ER and eight Boeing 747-400 aircraft, all with
the new longhaul product.
On June 14 2005 Air New Zealand Chief
Executive Ralph Norris announced that he had accepted the position
of Managing Director and Chief Executive of the Commonwealth Bank
of Australia and therefore would be leaving Air New Zealand on
August 31. The hunt
began for a new Chief Executive and a number of internal and
external candidates were considered.
On 30 May 2005 the United Kingdom and New
Zealand reached an agreement that removed Air New Zealand's
effective restriction of seven return services per week, along with
several other restrictions.www.beehive.govt.nz/ViewDocument.aspx?DocumentID=23786
Limits may still be imposed on the number of passengers carried by
airlines from New Zealand on routes between London and the USA, because under the current
bilateral agreement the UK has with the US restrictions apply on
the number of passengers that may be carried by UK airlines between the
USA and the UK.
As a result of this agreement, on April 5 2006 Air
New Zealand announced a new service between Auckland and London
Heathrow via Hong Kong, commencing October 28 2006.
On September 7
2005 the Boeing Company advised Air New
Zealand that due to a strike by assembly workers the delivery of
the new Boeing 777
aircraft would be delayed, possibly by months. Air New Zealand
finally took delivery of its first Boeing 777 aircraft on 28 October.
On October 5 2005 Air New Zealand announced
plans to fly to Adelaide from Auckland, starting March 2006. The carrier will use new
Airbus A320 aircraft on the route.
With Polynesian Airlines canceling their services to Niue on
October 7 2005, Air New Zealand announced
that it would be commencing weekly services using an all-economy
737-300.
On October 14
2005 Air New Zealand
announced that Rob Fyfe, the General Manager of the Airlines
Division, would succeed Ralph Norris as CEO. The airline announced
that it would be applying for consent to commence direct thrice
weekly return services between Auckland and Shanghai.
On October 16
2005 Air New Zealand
unveiled its new uniform.
On October 26
2005 Air New Zealand
announced that it was doubling its order for Boeing 787-8 aircraft,
from two to four.
Outsourcing of maintenance
On October 19
2005 Air New Zealand
proposed outsourcing most of its heavy maintenance on its long-haul
aircraft and engines, which would result in about 600 job losses,
mostly in Auckland. (NZ Herald)
New Brand Identity
At 12.01am on March
27, 2006 Air New
Zealand embarked on a worldwide synchronised changeover to a new
brand identity, involving
a new Zambesi-designed
uniform, new logo, new
colour scheme and new look check-in counters and lounges.
At the same time, the airline worked through the night to install
new greenstone-coloured walls featuring a fern-like extension of
the koru behind check-in
counters at Auckland, Wellington and Christchurch airports, and
removed reception desks at the entrance to Koru lounges in Auckland, Wellington, Christchurch, Sydney and Los Angeles, to enable staff
to welcome and greet customers in a more friendly and relaxed
manner.
The key features of Air New Zealand's new brand identity
include:
New Zambesi uniforms:
the most globally visible part of the brand change, more than 5000
staff from airports and offices around the world stepped into
stylish new Zambesi-designed uniforms, six months after they were
revealed at Air New Zealand Fashion Week 2005. Following the
unveiling at Auckland,
Wellington and
Christchurch
airports on March 27,
2006, the new colour will
be progressively introduced in all Air New Zealand environments
over the next two years. Inspired by the colour of the pounamu, the
prized gemstone found in New Zealand, this deep rich colour reflects New
Zealand's lush fauna, landscapes and forests.
Renewal and rebirth the Air New Zealand Koru, itself a symbol of
renewal and rebirth, is iconically linked to Air New Zealand's
heritage.
Trans-Tasman AOC changes
To help combat increasing labour costs Air New Zealand is
merging its fleet of A320 aircraft, which operate trans-Tasman
services, under the Air Operator's Certificate of Freedom Air, its
wholly-owned subsidiary.
Flights for travel from 31
July 2006 have been
re-numbered to the NZ700-999 series.
On April 12, 2006 Air New Zealand and Qantas
announced that they had signed a codeshare agreement for their
trans-Tasman routes and would file for authorisation from the New
Zealand Minister of Transport and the Australian Competition and
Consumer Commission. www.wellington-airport.co.nz/extras/pdf/alert_no_2%20_%205_may_06.pdf
Services
New Longhaul Product
On 28 June 2004, Air New Zealand released some
of the details regarding their new longhaul product, which will
help the airline turn around the profitability of its international
services. Every seat on their Boeing 747
(and ordered Boeing
777) fleet of
aircraft will be replaced with a more comfortable seat equipped
with a personal LCD screen linked to an audio and video on demand
system which allows passengers to play, pause, stop, rewind and
forward media on demand, just as they can with DVDs and CDs at
home. In a first for Air New Zealand, every seat in the main cabin
will have an 8.4" personal LCD screen linked to the system.
Pacific Premium (Premium Economy) Class is a new concept to
Air New Zealand, which will be the only airline offering the
product into New Zealand. Since then another six 747-400s have been
refurbished, and these fly the daily non-stop Auckland - Los Angeles services
(NZ1/2/5/6) and the continuation of NZ1/2 to London Heathrow. From October 28, 2006, a second daily service
between Auckland and
London Heathrow, via
Hong Kong, (flights
NZ38/39) will be inaugurated using 747-400 aircraft.
Five new Boeing 777-200ER aircraft are used on the Auckland to San Francisco, Singapore, Tokyo and Hong Kong routes (and some
Auckland- Melbourne, Sydney or Brisbane services). The
Auckland to Osaka route will be operated by
Boeing 777-200ER aircraft from 30 July 2006.
On June 18 2006 Air New Zealand announced the
flight schedule for a new non-stop route into Shanghai's Pudong Airport, to
commence on November
6, using new Boeing B777-200ER.
On July 12 2006 Air New Zealand announced that
its daily Auckland-Singapore Boeing 777-200ER service would be
terminated from 02
October 2006 due to
mounting losses. (This benefit is must be redeemed on Friday
through Sunday, and is valid for up to three days.)
Members also receive Star Alliance Gold status, providing a number of
guaranteed benefits with other Star Alliance carriers.
Gold Elite
Receive all the benefits of Gold plus
- May bring five guests into the Air NZ operated Koru Club and
International lounges
- Complimentary Upgrades are transferable and upgrades could
clear up to 12 months before the flight
- May gift rewards to up to four different people per
year
- Receive five 24-hour non-transferable valet parking coupons
valid at WLG, AKL and CHC, along with one Hotel and one Rental
Car voucher (instead of one or the other for Gold
tier)
- A partner card, providing some of the benefits of this status
to their partner when travelling on Air New Zealand operated
services.
Lounges
Subsidiaries
Air New Zealand has four wholly-owned subsidiary airlines -
three fully integrated regional airlines (Air Nelson, Eagle Airways and Mount Cook Airline) serving secondary destinations
in New Zealand, and Freedom Air, a low-cost international carrier flying
between New Zealand and eastern Australia and Fiji.
Air Nelson is based
in Nelson,
operating Saab 340A and recently acquired Bombardier Q300 aircraft. Flight
numbers are in the NZ8000 series.
Eagle Airways is
based in Hamilton, operating Beechcraft 1900D aircraft. Flight numbers are in
the NZ2000 series.
Mount Cook
Airline is based in Christchurch, operating 66-seater ATR 72-500 turbo-prop
aircraft.
Destinations
Fleet
The current Air New Zealand (including Freedom Air) fleet
consists of the following aircraft (at June 5 2006):
- 13 Airbus
A320-232 (hold options for 20) (ZK-OJK and OJL leased to TAM
in Brazil and Star Airlines in Germany, respectively)
- 14 Boeing
737-300
- 8 Boeing
747-400
- 7 Boeing
767-319ER (two being phased out over the next two
years)
- 6 Boeing
777-219ER
- 16 Raytheon Beech
1900D
On order:
- 2 Boeing
777-219ER
- 4 Boeing
787-919 (plus 14 options)
- 13 Bombardier
Q300 (for subsidiary Air Nelson)
The average age of the Air New Zealand fleet is 6.7 years (at
April 2006)
Livery
The M?ori symbol on
the tail of Air New Zealand is known as the koru. It is now seen on the tail of Air New
Zealand's fleet as it wings its way over the same waters, not only
still linking the Pacific peoples, but also reaching right across
Asia, and the Atlantic to London.
The koru was first applied to the tail of Air New Zealand aircraft
with the arrival of the DC-10 aircraft in 1973, and has remained
ever since. The current aircraft livery was adopted in 1997.
The koru also appears on the Air New Zealand house flag (see
illustration) and can be seen flying at international airports such
as LAX.
A redesigned logo was unveiled on March 21, 2006.
The decals featured actors from the The Lord
of the Rings film trilogy against backdrops of New Zealand
locations used for in the films.
Previous aircraft operated
- De
Havilland Fox Moth (NAC)
- De
Havilland Dragon Rapide (NAC)
- De
Havilland DH86 Express (NAC)
- De
Havilland Heron (NAC)
- Short S-30
Empire flying
boats: 2 (TEAL)
- Short
Sunderland (NAC)
- Short
Sandringham flying boats: 4 (TEAL)
- Short Solent
flying boats: 5
(TEAL)
- Douglas DC-6: 3 (TEAL)
- Lockheed
Electra 3 (NAC)
- Lockheed L-188 Electra:
5 (TEAL)
- Lockheed Lodestar: 12
(NAC)
- Lockheed 14 (NAC)
- Douglas DC-3: 29 (NAC)
- Vickers Viscount: 5 (NAC)
- Fokker F27-100 Friendship: 13
(NAC)
- Fokker F27-500 Friendship:
11
- Douglas DC-8-50: 7
- McDonnell
Douglas DC-10-30: 8
- Boeing 737-200:
24
- Boeing 747-219:
5
- Boeing 767-200: 7
- Fairchild
Metroliner
- Embraer Bandeirante
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