Air New Zealand Orders Boeing 787-10

Filed Under: Air New Zealand

A week ago I wrote about how it was expected that Air New Zealand would soon place an order for wide body Boeing jets.

The airline had been trying to decide between Airbus and Boeing for their fleet renewal, and we learned that their choice was Boeing. What we didn’t know is if they’d go with some model of the 777, or some model of the 787. Now we know.

Air New Zealand orders Boeing 787-10

Air New Zealand has today announced that they’ve placed an order for eight Boeing 787-10 aircraft, expected to be delivered between 2022 and 2027 (so they’ll very gradually be joining Air New Zealand’s fleet).

It seems like Air New Zealand has a lot of flexibility built into this deal:

  • The agreement includes the option for up to 20 planes, so they can increase their order by up to an additional 12 planes
  • The airline has substitution rights for the 787-9, so they could end up taking delivery of a combination of the two planes
  • The delivery schedule can be delayed or accelerated based on market demand

The list price for this deal is 2.7 billion USD, though as usual you can expect that they paid significantly less than that (I’ve always found it weird that airplane pricing is sort of similar to street market pricing).

What this means for Air NZ’s fleet going forward

As it stands, Air New Zealand’s long haul fleet consists of:

  • 9 Boeing 777-200ERs
  • 8 Boeing 777-300ERs
  • 13 Boeing 787-9s (with one more plane on order)

The plan is for these 787-10s to eventually replace their 777-200s, which will be phased out by 2025. Combined with the General Electric engines Air New Zealand has ordered, the plan is for these planes to be about 25% more fuel efficient than the planes they’re replacing.

As of 2025 the airline would have a long haul fleet consisting of 787-9s, 787-10s, and 777-300ERs.

Why the 787-10?

A lot of people expected that Air New Zealand might order the latest generation 777, which is the 777-8 and 777-9. I wasn’t expecting them to, and I’m not surprised they didn’t.

Why? It’s a high capacity plane (the 777-9 is bigger than any current model of the 777), and Air New Zealand is quite conservative with their growth. Their focus is on planes that are fuel efficient and aren’t too big.

What makes the choice of the 787-10 interesting is that it’s the shortest range version of the 787. When it comes to the three variants of the 787, the 787-9 is the longest range, followed by the 787-8, followed by the 787-10.

Here’s a comparison of some of the specs of the three variants:

6,430 nautical miles is about 7,400 miles. This is sufficient range for them to operate flights from Auckland to Australia, Asia, and select destinations in North America. For example, they could fly the 787-10 to Los Angeles and San Francisco, but not to Chicago and Houston, and Vancouver would probably be a stretch too with strong winds.

What’s interesting is this quote from Air New Zealand’s CEO:

“The 787-10 is longer and even more fuel efficient. However, the game changer for us has been that by working closely with Boeing, we’ve ensured the 787-10 will meet our network needs, including the ability to fly missions similar to our current 777-200 fleet.”

Nowadays aircraft manufacturers are constantly making improvements to planes even long after they design them (the range of the A220 was just recently increased), so it sounds like we can expect improved range on the 787-10 that would mean the 787-10 can more easily operate some of their flights to North America.

Bottom line

The 787-10 sounds like a good fit for Air New Zealand’s fleet. In particular, it sounds like it gives them the flexibility they need, in terms of being able to keep 12 options open, being able to convert the planes to 787-9, and also being able to accelerate or defer deliveries of these planes.

What’s most interesting here is that it sounds like Boeing is working on improved range for the 787-10, based on the fact that Air New Zealand says the plane should be able to operate similar flights to their 777-200.

What do you make of Air New Zealand’s decision to order the 787-10?

Comments
  1. This was fairly predictable – firstly, the choice of Boeing over Airbus (Boeings are substantially cheaper to buy necause they’re built down to a price – an average 787 is about half the price of an A350); secondly, the choice of the smaller capacity aircraft.

    ANZ is not bad in lots of ways – very jolly staff in particular – but, those J seats… They’re hideous enough on Virgin (who at least have recognised they need to replace them, albeit their choice of replacement is not very inspiring). I do wish ANZ would make a bold choice on replacing them.

  2. Most of the routes flown by ANZ’s 787-9 fleet are shorter routes to Asia, which the -10’s can easily fly, releasing the longer range -9’s for the longest routes. The 10’s could also do Auckland – California. By increasing premium class seating, the existing -9’s could do Auckland-NYC, which is a couple of hundred miles shorter than Qantas’ existing Perth-London route. If, as is likely, Boeing adds range to either model of the 787, that will be icing on the cake.

  3. Umm! List prices from OEM websites in USD.
    787-8 248.3
    787-9 292.5
    787-10 338.4

    A350-900 317.4
    A350-1000 366.5

    Note: Bus prices are in 2018 $ whereas Boeing prices are in 2019$ so you should add another 2% to the prices (average annual Bus price increase).

    @ The nice Paul math isnt exactly your strong suit eh?

  4. @ skedguy

    There’s a difference between the list price and the discounted price any airline actually pays. Why do you think so many airlines tell us about the difficulty they’re having in choosing between Airbus and Boring during sales negotiations? It’s all part of increasing the pressure, and the size of the discounts.

    Just like only a fool pays the list price for a new car.

    I’m guessing business is not your strong suit? 😉

  5. According to Australian and NZ aviation media where Air Nz Ceo is quoted, Air NZ has ordered a longer range version of 787-10 than the standard version. Worked with Boeing to extend range so can do Auckland to New York comfortably.
    They will be in a premium class heavy configuration seating less than standard 787-10

  6. Flying in any new aircraft is always a bonus (i.e. that ‘new’ smell, clean seats etc, etc) but in the case of NZ especially, the real drawcard – from a pax perspective – would surely have to be the forthcoming J class seats rather than the aircraft itself. I can’t think of another reputable southern hemisphere airline which is in greater need of changing its current seats.

  7. So that’s how trijets were sold. As if they were from a Turkish Bazaar

    For you my friend, special price one extra engine

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