ANZ frustrated over new 787-9 delay

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Air New Zealand has said frustration would be an "understatement" of its reaction to a new delay that could now see the Boeing 787-9 enter service later in 2014 than planned.

Boeing had last advised ANZ, the launch customer of the stretched 787, that it would receive its first of eight aircraft in late 2013 or early 2014. ANZ said that date has slipped to an undetermined period in 2014 that it is still in discussions with Boeing about.

A spokeswoman for Boeing said that late 2013 remains the target, "although we are continually assessing that schedule as we move toward planned rate increases in the programme".

Boeing had not provided delivery guidance since confirming in the week beginning 11 July that earlier in the month it had implemented a hold until the first week of August to the 787 final assembly line.

It expects to provide further guidance during its 27 July second quarter earnings call.

"It would be an understatement to say we are frustrated and disappointed," said ANZ chief financial officer Rob McDonald.

The 787-9's original delivery date was late 2010 and ANZ had planned to use the aircraft for fleet simplification and expansion, forcing the carrier to change strategy.

"We're on about plan C," McDonald said.

ANZ hoped to retire its Boeing 747-400 fleet by the end of 2012 but will now keep an undisclosed number until the 787s arrive. It will also postpone retiring its 767s, which the 787s are largely due to replace.

ANZ currently operates five 747-400s and five 767-300ERs, according to Flightglobal's ACAS database.

While ANZ would prefer to retire both types, McDonald said keeping the

767 is more ideal. "Our 767 fleet is very sound and relatively low-cost and performs its mission really well."

In comparison to ANZ's 777-300ER, McDonald said the 747 uses 30% more fuel to carry approximately the same number of passengers but 40% less cargo.

Despite that, McDonald is adamant keeping the 747s and 767s is appropriate.

"It's better to do that and wait for the 787 than get a lot more aircraft that aren't as suitable as the 787s," he said. "You might get an early lead for a couple of years but you might not have the right plane in 20 years."

In the long-term, the 787 will enable ANZ to serve South America. The carrier sees the continent - and Sao Paulo in particular - as holding growth opportunities as ANZ and its government seek to develop New Zealand into a hub for passengers travelling between Australasia and South America, waypoints currently connected via hubs in the Middle East and Europe.

"For South America we're certainly looking for a game-changing aircraft that we can exploit," McDonald said, adding that existing aircraft would have payload restrictions or prohibitively high fuel burn rates between New Zealand and South America.

In the short-term, ANZ could see a South American traffic boost if LAN Airlines, which serves Auckland from Santiago, switches alliances from oneworld to ANZ's Star Alliance. Last year LAN agreed to merge with Star Alliance carrier TAM. The two have not announced which alliance they will participate in post-merger.

"In South America there is alliance positioning going on. We'll have to see how that plays out," McDonald said.

Despite interest in South America, McDonald said ANZ was most likely to first deploy its 787-9s to Asia, and specifically China or Japan.

But he said ANZ is in discussions with Boeing about the number of 787-9s initially to be delivered.

McDonald said ANZ does not plan to order additional aircraft but noted that "we do have options". That includes options for 31 Airbus A320s, nine 777-200ERs, 15 777-300ERs, and 12 787-9s, according to ACAS.

ANZ still aims to streamline its long-haul fleet to the 777 and 787 and then use their cockpit commonality to establish a single pilot group that could fly anywhere on the carrier's long-haul network.

"There are some great rostering efficiencies you can get in there," McDonald said.