Tuesday, November 03, 2009

Air NZ abandons Boeing for domestic routes

Just to show Air NZ's predominantly state ownership does not stop it from applying good commercial acumen, the NZ Herald reports that it has wisely chosen now to order replacements for its Boeing 737-300 fleet, which is almost exclusively used on main trunk domestic flights. Wise, because the global recession has meant deals are easier to get from the two main suppliers of replacements, Boeing and Airbus.

What it will mean is an end to the long history of Boeing 737s on domestic routes, which started in 1967 when the then NAC ordered them to replace the turboprop Vickers Viscount. That first generation set of 737s was at a time when 737s were not popular internationally, and there was a hard sell from a British delegation to order the now virtually forgotten BAC 1-11. Boeing proved its 737 was more promising, despite much British lobbying, and it was right. The Boeing 737, and its second and third generation derivatives has been the most successful airliner made ever, with over 6,000 produced and another 2,000 on order.

The BAC 1-11 sold 244, including bizarrely 22 built in Ceaucescu's Romania. A legacy of a deal signed in the late 1970s. NAC made the right choice.

Since then, the original fleet of 3 has expanded to 15 today, and has been renewed twice. Although Air NZ has tended to order the last of the line of versions about to go out of production. In 1985 the original Boeing 737-200 fleet bought under NAC were replaced with the updated Boeing 737-200 Advanced series (around the last ever made). In 1999 these in turn were replaced with the last Boeing 737-300 series ever made, which saw an end to the noisy 1960s generation turbofan engines well remembered by those living in Wellington's Eastern Suburbs because conversations would need to stop whilst they would take off.

The Boeing 737-300s remain in service today.

Boeing undoubtedly offered its "next generation" 737 series 700, 800 and 900, Airbus had an advantage in Air NZ already having A320s largely used to fly services across the Tasman and to Pacific Islands.

The choice of the A320 was made on price, and it enables economies to be made in having one type of aircraft. The A320 has two other advantages, it has a slightly wider cabin so enables slightly wider seats and aisle, but also carries standard cargo containers in its belly. The "next generation" 737 cannot do that, as its fuselage is still essentially based on the long out of production Boeing 707.

So good for Air NZ, new aircraft, with a lot more seats, more cargo capacity, at a good price, and economies of scale of having one small jet type.

Bad luck for Boeing having lost a sale for a loyal customer of over 40 years for its most successful type.

For passengers it should mean more seats that are slightly wider, perhaps a common fleet that may all have personal TV installed at seats and business class once more domestically perhaps (unless there will be domestic and international configuration A320s). Overall it means that in a few years time, Air NZ's entire jet fleet will be comparatively very young as the 747s and 767s are phased out over the next 5 years as well.

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