Air New Zealand to Cut Growth, Defers Aircraft Orders

After launching a review of operations in January, Air New Zealand has announced that it will be reducing its growth targets and deferring delivery of future aircraft. The decision comes after the carrier reduced its pre-tax earnings guidance from between NZ$425 million ($288 million USD) and NZ$525 million ($356 million USD) to between NZ$340 million ($240 million USD) and NZ$400 million ($271 million USD).

Additionally, the carrier also reported a 34.5 percent fall in profit for the first half of this year. Those combined factors lead New Zealand’s national carrier to reduce its network growth expectations to three to five percent over the next three years, down from five to seven percent.

In terms of deferring aircraft delivery, the carrier plans to delay the delivery of three Airbus A321neos by one year, one Airbus A320neo by two years, and two additional widebody aircraft by four to five years. The carrier, though, is still expected to receive one leased A320neo this year and another leased A320neo next year.

Air New Zealand also stated that it will be extending the retirement of its aging Boeing 777-200 fleet to between 2023 and 2025, as the carrier makes room for additional orders of either Boeing or Airbus aircraft. The deferrals in delivery and extended retirement will eventually lead to a deferral of NZ$750 million ($509 million USD) in capital expenditures.

Air New Zealand hopes that the reduced expectations and delivery deferrals will allow the carrier to improve revenue growth, efficiency, operating costs and overall customer experience.

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Akhil Dewan

An “AvGeek” for most of his life, Akhil has always been drawn to aviation. If there is an opportunity to read about an airline, fly on a new airplane, or talk to anyone about aviation, he is on it. Akhil has been on over 20 different kinds of aircraft, his favorite being the MD-80. Additionally, he has visited 5 continents and plans to knock out the remaining two (Africa and Antarctica) soon. Based in Dallas, Akhil graduated from Texas A&M University with a degree in Management Information Systems and currently works in consulting. His dream is to become an airline executive.

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