But now that the first of the 14 aircraft has landed back in New Zealand after 184 days, there is a much bigger story behind its arrival.
A new way of working
The retrofits taking place at S.T. Engineering’s Singaporean facility, the airline’s heavy maintenance partner, are a significant investment from the airline.
It will cost roughly $35 million per retrofit, using parts purchased in different currencies, including yen and euros.
The total cost for all 14 retrofits is $500m, part of an even bigger $3.5 billion capital expenditure for the airline through to 2030.
“Wind the clock back to about 2020, back to February. The world starts to lock itself down, and we, at that point, are some way down the path of thinking about how we are going to retrofit a 787,” Air New Zealand chief executive Greg Foran said.
“But of course, the world gets locked down. How are you going to continue this work?”
The whole aircraft supply chain changed, and original equipment manufacturers (OEMs) were reevaluating the future.
Air New Zealand was also in the middle of raising capital.
Foran explained that once the company had raised $1.2b in 2022, the airline went straight to Boeing to see what could be done about getting a retrofit under way.
Traditionally, new products or designs are installed on planes fresh off the production line before being installed on older aircraft, known as a line fit.
That allows it to progress through the certification process, speeding up the subsequent retrofitting procedure to only one or two years.
However, as the rest of the industry experienced in 2022-2023, plans went askew.
“We said to ourselves, you know what, what happens as the new planes get delayed?” Foran said.
“It’s an easy thing to then say, oh, I’ll tell you what we’re going to do. We’re going to run these two things in parallel. We’ll do a new plane and we’ll do a retro.”
With Boeing short of engineers at Boeing Global Services, it wasn’t going to be able to meet the airline’s needs, and not any time soon.
Then came the suggestion from Air New Zealand: “What happens if we bring a third party into this equation?”
Building trust
Air New Zealand and Boeing turned to an integrator by the name of Northwest Aerospace Technologies, or NAT.
It’s part of the Safran group and is mutually known by Air New Zealand and Boeing, making them the ideal third party.
NAT is a leading provider of engineering, programme management, Federal Aviation Administration (FAA) certification and manufacturing services in support of airline interior retrofit programmes.
Foran explained that NAT would do the engineering work required to retrofit the planes, but Boeing would need to sign everything off.
However, as Foran shared, the Boeing 787 Dreamliner operates slightly differently from other aeroplanes.
“Other aeroplanes, like a 777, there’s a whole set of drawings that you go through, and you can turn the page. With the 787, this information is held tight and it’s held digitally.”
For the three parties to work effectively together, it required Boeing to change its operational processes and share its files with NAT.
That significant co-operation allowed the three partners to get the retrofit work completed before doing a line fit.
Strategically, the move has paid off, with Air New Zealand not expecting its new aircraft until the beginning of 2026.
Had the airline followed the standard procedure and waited for the retrofits until after, they wouldn’t have likely seen those until 2027-2028.
“That’s a credit to not just Erica [Pearson, Boeing] and all the Boeing team. It’s also a credit to Angie [McIvor, Air New Zealand] and the team that she works with because this is a heavy lift,” Foran said.
“You’re now changing the way that these things happen.”
Investment aplenty
Foran was confident that as supply chain pressures begin to ease and retrofitting is completed, Air New Zealand would be positioned much better than its competitors.
Not only does the airline have a young average fleet age of just over eight years, but its capex will be significantly lower than its competitors.
Take Australian competitor Qantas, for example. It has an average fleet age of 16 years and has to find A$15b ($16b) to fund capital expenditure until 2030, roughly quadruple Air New Zealand.
But it’s the diversity of investment that is important for Air New Zealand.
Its $3.5b capex to 2030 includes eight new 787 Dreamliners from Boeing, with options for more 787s on top.
Those new eight aircraft will be 787-10 Dreamliners, giving flexibility to the airline should it wish to convert them to 787-9s and vice-versa.
Another five Airbus narrow-body jets are included in the long-term investment plan, alongside a more modest retrofit programme on its 777-300ERs in 2031-2032.
Air New Zealand has seven 777s, which it owns, and three are ex-Cathay planes on lease.
Foran said that the sensible position for the airline is to keep those three ex-Cathay planes until at least 2030-2031.
That aircraft make-up, alongside newly retrofitted designs before its competitors, is crucial if the airline is to get ahead.
New developments
A lot has changed since Foran’s visit to Singapore in November last year, most notably his resignation as chief executive of Air New Zealand.
He was a big get when he accepted Air New Zealand’s top job in late 2019, formerly the chief executive of Walmart US, before Air New Zealand hired him to replace Christopher Luxon.
Foran said leading Air New Zealand had been one of the greatest privileges of his career.
“It’s been an incredible experience alongside an exceptional team. I’m incredibly proud of what we’ve achieved together and the way we’ve positioned Air New Zealand for the future,” he added.
“I am humbled by the work Air New Zealanders do every day and their extraordinary commitment to each other, our customers and our country.”
Foran will stay with Air New Zealand through to the middle of October, enough time to see a few more retrofitted aircraft return home in what could be the lasting legacy from his tenure.
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
*Tom Raynel travelled to Singapore courtesy of Air New Zealand