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Air NZ rolls out long-haul passenger comforts

Tuesday 26th January 2010

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Air New Zealand has rolled out more comfortable seating and cabin facilities to maximize the comfort of its long-haul passengers to gain an edge over rival airlines. Its designs could become a valuable source of revenue in the future, says Forsyth Barr head of research Rob Mercer.

The national carrier’s in-house design centre, a few hundred metres from its Auckland CBD headquarters, has produced the Spaceseat for its Premium Economy class, and the Skycouch for Economy travelers, according to a statement today.

Mercer said that the Spaceseat was originally intended for Boeing’s 787-9 Dreamliner, for which Air New Zealand is a launch customer. With Boeing’s repeated delays in the Dreamliner’s development, the airline has rejigged the seat to fit its 777-300 fleet while it awaits the arrival of the new aircraft.

Compared to European discount airlines, whose passengers might be able to put up with a cramped five hour flight, “as a long-haul destination, Air New Zealand is emphatic in making a 12 to 24 hour flight as comfortable as possible at an affordable price,” Mercer said. “Such innovations put it ahead of its competitors, and give you a better chance of greater load factors when customers experience this choice, and a greater chance of repeat business.”

He notes that one reason Air New Zealand has remained profitable when other airlines have struggled is because of superior service.  The shares fell 0.8% to $1.19 today on the NZX and have climbed 35% in the past 12 months, outpacing the NZX 50.

“It is their ability to be innovative and flexible which has allowed it to remain profitable when others have lost money,” Mercer said. “An example of that is enhancing the travel experience for someone who wants to travel from Europe to New Zealand.”

Other examples are three different pricing levels for different parts of the plane; business, premium economy, economy; that allow the airline to maximize its per-plane yield.

Mercer said that yield is not just about a cheap seat price, or a high one for that matter.

“Yield is about the price and how full the plane is – maximising price and yield factors,” he said. “To get both those you need service and to be competitive on that price.”

By having different products, Air New Zealand can differentiate its price and offer to customers. The new seating options will simply increase the airline’s product mix and hopefully, profit.

Mercer said the introduction of the new seats is an example of Air New Zealand yet again getting its timing right. Its aircraft fleet is relatively young, and as the 747 is phased out over the next five years and new aircraft introduced, its design innovations will help it keep ahead of its competition.

As well as the seat design being licensed to aircraft seat manufacturers Recaro and Contour, Boeing has already indicated it is interested in the seats as a business class option for its 737 range. A new slip-on pillow will go over the winged headrest in Economy seats, eliminating pillow slippage and removing the need for neck cushions. A new foot bean bag style cushion named ‘Otto’ enables Premium Economy passengers to create their own position for sleeping rather than being restrained by an uncomfortable, stiff leg rest.

For Air New Zealand customers in the business class, which is usually full between airports such as Singapore and Europe, such innovations may be worth paying extra for.

Air New Zealand’s new oven technology will enable food to be cooked from scratch, rather than simply being reheated, and will be installed in all of the 777-300’s five galleys. This development has also interested other airlines.

These innovations could be worth quite a lot to Air New Zealand Mercer said, though it is unlikely to sell the technologies to competitors on its long-haul business.

Businesswire.co.nz



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