Sam Stubbs is chief executive of KiwiSaver fund Simplicity and a regular opinion contributor to Stuff.
OPINION: Is Air NZ to New York a flight too far?
The desire for Air New Zealand to fly to New York is understandable. After all, it’s the Big Apple, and flying nonstop from Auckland is a dream come true for many tourists and business travellers.
It’s prestigious for Air New Zealand too, so much so that it has tagged the flights NZ1 and NZ2.
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The flights are popular, particularly in premium economy and business class. For many, paying the extra is worth it to avoid a stopover in traditionally grim American airports.
But flying direct to New York is proving to be a big stretch for Air New Zealand.
Because it takes 16 hours to fly there, and almost 18 hours to fly back, the extra fuel required means fewer passengers, baggage and freight.
The first two weeks of the service have been very problematic.
The maiden flight had to offload baggage. Passengers and baggage were offloaded on the return flight.
One flight looked like it would have to stop for refuelling, flying up replacement pilots and crew to Nadi just in case.
Another had to offload passengers and pay them to fly home another way.
All these disruptions have been in the name of safety, and Air New Zealand has a near-perfect record on that front. But none were as advertised.
The first couple of weeks should have been a public relations triumph for Air New Zealand, but have ended up more of an embarrassment.
So far it seems tough for them to seamlessly operate the New York flights in a way that pleases passengers and in a way that offers space to freight customers.
Given all the problems are related to the basic rules of flying, they aren’t teething problems that will go away easily.
It could get even worse.
Any long delays at departure could mean a stop in Nadi or Rarotonga to change crew due to time limitations.
This requires a new crew to be flown up from Auckland and is a major inconvenience for passengers. It could be a frequent occurrence with the severe New York winter weather.
Why all these issues? The problem may be the 787-900 aircraft Air New Zealand uses.
Interestingly, Qantas has removed its 787s from some ultra-long-haul flights, finding the aircraft isn’t as capable as they hoped it would be.
Our exporters have already suffered due to the limited 787 carrying capacity. Air New Zealand flights to and from Chicago had valuable fresh produce offloaded to save weight.
Cargo capacity to New York seems very limited, if any at all. This feels like a wasted opportunity for producers of high-value produce, meat and seafood.
Air New Zealand’s selection of the 787 was no doubt a rigorous process. It has proven a very capable plane on standard long-haul routes.
But there is always a risk when buying new aircraft that the reality doesn’t quite live up to the promise. This appears to be the case with flights as far as New York.
Nothing in the announced capabilities of the new 787-10’s, which Air New Zealand takes delivery of in 2024-25, is any more encouraging.
So are Air New Zealand 787’s just the wrong aircraft for ultra-long-haul flights? Do they need to change aircraft, so that passengers don’t have to?
Time will tell, but the signs are not encouraging.
Air New Zealand’s choice of JFK as its New York destination airport is a strange one too.
While it is New York’s most prestigious airport, JFK is not the hub airport for its Star Alliance partner, United Airlines.
That means passengers wishing to fly on to Europe or within America are either stranded at JFK, or have to transit to Newark to catch a Star Alliance connecting flight.
The irony is that Air New Zealand initially announced Newark as its destination airport, which makes much more sense to me.
Was the decision to use JFK a prestige vs practical decision, and the wrong one? Time will tell.
Another problem has just arisen from across the Tasman, with Qantas announcing a competing flight to New York, via Auckland.
This is a big deal, as it opens up serious competition on a route that Air New Zealand was hoping it would have to itself.
While Air New Zealand is likely to be making money on the New York route right now, the arrival of Qantas may severely dent the long-term profits it was hoping for.
Because Qantas passengers will be able to easily connect with its One World partner airlines at JFK, it may be a more attractive option for passengers from Auckland transiting through New York.
While they are starting their service with a 787 similar to Air New Zealand, Qantas are configuring their aircraft with fewer seats, which should mean their service is more reliable.
Qantas has the option to upgrade to the newly ordered A350-1000 from 2025, once passenger and freight volumes rise.
If Qantas uses these on the Auckland-New York route, our exporters of high-value products might relish using this service, at the expensive of anything offered by Air New Zealand.
Flying to New York has also given Qantas impetus to upgrade their lounge in Auckland, which will make them more competitive vs Air New Zealand across the Tasman.
So in spite of the All Blacks just winning the Bledisloe, Qantas may have just outmanoeuvred us – and on our own turf.
Nevertheless, competition is a good thing for consumers, and Kiwis may soon be able to choose how they fly directly to New York. If flying to New York makes commercial sense for both airlines, everybody wins.
But millions of us own shares in Air New Zealand via our KiwiSaver schemes. If Air New Zealand has made the wrong commercial decision by flying to New York, we may be poorer for it.
I love Air New Zealand. The KiwiSaver fund I work for owns many Air New Zealand shares.
But their flagship New York flight has been a nonstop (or not) service. Is it simply a flight too far?
The jury is out. Sadly, our bags have been too.
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