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Zkpilot
Posts: 4522
Joined: Wed Mar 08, 2006 8:21 pm

Re: New Zealand Aviation Thread - March 2020

Mon Mar 30, 2020 12:47 pm

ZK-NBT wrote:
Zkpilot wrote:
All this talk of getting rid of 77E and bringing forward 78J Tallis just nonsense.
1) Cheapest fuel in over a decade (fuel efficiency isn’t so important).
2) sale value - 77E are almost worthless to sell now.
3) purchase price of 78J - hundreds of millions which NZ won’t want to be spending anytime soon.
4) finance costs - 77E are fully depreciated etc they basically only cost their maintenance and very cheap leases now vs interest (was it 9%?) and/or lease costs on hundreds of millions.
Nope sorry but with everything that’s going on they aren’t going to bring them forward. They might drop a couple of planes that are surplus but they’re trying to conserve cash.


I’m no expert but you have to see the seriousness of the situation. I agree we don’t know yet what that is and anything we say is pure speculation, which I enjoy a bit of in this context.

1. Yes fuel is cheap, aircraft aren’t so having multiple aircraft parked for to long might not be an option so they may offload more than you think, they might not as well.

2. Benefits of mix of owning and leasing, parking some owned frames could be an option, as you say they won’t be worth anything. Trying to end leases early, it maybe more cost effective to keep flying them and park owned frames.

3. Simplify the fleet sooner, park entire 777 fleet and use the 781 to grow, yes as you say fuel is cheap but there are other savings. There may be financing they can get that will benefit the 781 coming earlier.

4. There will be benefits to keeping the 772s as well I agree If they are needed.

Conserving cash yep, but they also have to look at how to best move forward long term.

You say “you have to see the seriousness of the situation” then advocate spending over a billion dollars on new planes to replace ones that are still adequate for the job (especially in a low priced oil market).... Yes the 77E may go, but they won’t be bringing forward 78J orders (unless there is a rapid turnaround in events - ie treatment/vaccine for Covid19 and V shaped recovery).
Let me put it another way for you, the interest costs on a fleet that is worth $80m at most (probably more like $40m now) at 9% is $7.2m pa. The interest costs for a new fleet ($1B at the very least) is $90m pa. Then you have costs to train crew, extra spares, extra sims etc etc vs everything already set up.
Literally the only things you save money on are fuel and maintenance. In the current environment, fuel cost differences are negligible, while maintenance differences don’t come close to making up the $81m pa delta.
Only way I see the 78J coming in earlier is if Boeing trades in NZ’s 777 for them and offers a better deal.
64 types. 45 countries. 24 airlines.
 
Kiwirob
Posts: 12983
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Re: New Zealand Aviation Thread - March 2020

Mon Mar 30, 2020 1:44 pm

DavidByrne wrote:
And as for a second runway at AKL - that's now pie-in-the-sky for the foreseeable future. AIAL will have many more pressing concerns for a good number of years (like how to balance the books) than worrying about mega-dollar investments. And don't hold your breath for a new terminal either: that will be low priority once traffic stabilises at a lower level than 2019.


Now would be the perfect time for the govt to nationalise AIAL and any other airport they can buy, these are strategic assets and should never have been privatised.
 
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SelandiaBaru
Posts: 106
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Re: New Zealand Aviation Thread - March 2020

Mon Mar 30, 2020 5:55 pm

DavidByrne wrote:
NZ6 wrote:
It's not that you've been saying these things.... it's to the extent you've been saying them. You're rightly or wrongly expressing an absolute worst possible case scenario.

Hey I don't mean to upset people by offering negative scenarios. I just call it the way I see it, just as everyone else does on this forum. I get the feeling, though, that some people want this to be a "good news" forum, and don't want unwarranted optimism called out for what it is.

I've looked back over my posts over the last couple of weeks, and I don't think there's much I would change. Much of what I've said which was pooh-poohed at the time has already come to pass. Some of the issues I've raised a week ago about the the crisis for the travel industry probably lasting a long time now been publicly spoken about by our PM (she suggested 12-18 months). I don't claim any special insight, other than being a keen student of global affairs as well as the airline industry.

I'm genuinely sorry if my pessimism has upset people. I've recorded my agreement on a number of occasions in the last fortnight with posters who have taken a more nuanced view. But I don't see why unbridled optimism should get a free ride.

aerokiwi wrote:
You even have to qualify the experts' assessments with your videoconferencing and fare discounting predictions.

Eh? So just because the "experts" (which another poster said were just stating the obvious anyway) didn't mention something in a short TV interview that means it can't be a thing? Or that I can't offer an alternative view on the likelihood of fare discounting? Is there a script or something which I am not aware of?


It doesn't upset me and this is my livelihood that is under threat. As Foran has stated on a number of occasions over the last few weeks they make some working assumptions and think they're being conservative and then things get worse.

Thinking of different possible realities is worthwhile, it's worthwhile to challenge them with the information we have but it's worthwhile to mentally prepare for what could happen.

The whole things sucks but it is what it is. I just hope Air New Zealand survives and in that hope I don't lose everything I've spent 17 years building up.

For me discussing different potential outcomes does not upset me.
 
ZK-NBT
Posts: 7500
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Re: New Zealand Aviation Thread - March 2020

Mon Mar 30, 2020 7:26 pm

Zkpilot wrote:
ZK-NBT wrote:
Zkpilot wrote:
All this talk of getting rid of 77E and bringing forward 78J Tallis just nonsense.
1) Cheapest fuel in over a decade (fuel efficiency isn’t so important).
2) sale value - 77E are almost worthless to sell now.
3) purchase price of 78J - hundreds of millions which NZ won’t want to be spending anytime soon.
4) finance costs - 77E are fully depreciated etc they basically only cost their maintenance and very cheap leases now vs interest (was it 9%?) and/or lease costs on hundreds of millions.
Nope sorry but with everything that’s going on they aren’t going to bring them forward. They might drop a couple of planes that are surplus but they’re trying to conserve cash.


I’m no expert but you have to see the seriousness of the situation. I agree we don’t know yet what that is and anything we say is pure speculation, which I enjoy a bit of in this context.

1. Yes fuel is cheap, aircraft aren’t so having multiple aircraft parked for to long might not be an option so they may offload more than you think, they might not as well.

2. Benefits of mix of owning and leasing, parking some owned frames could be an option, as you say they won’t be worth anything. Trying to end leases early, it maybe more cost effective to keep flying them and park owned frames.

3. Simplify the fleet sooner, park entire 777 fleet and use the 781 to grow, yes as you say fuel is cheap but there are other savings. There may be financing they can get that will benefit the 781 coming earlier.

4. There will be benefits to keeping the 772s as well I agree If they are needed.

Conserving cash yep, but they also have to look at how to best move forward long term.

You say “you have to see the seriousness of the situation” then advocate spending over a billion dollars on new planes to replace ones that are still adequate for the job (especially in a low priced oil market).... Yes the 77E may go, but they won’t be bringing forward 78J orders (unless there is a rapid turnaround in events - ie treatment/vaccine for Covid19 and V shaped recovery).
Let me put it another way for you, the interest costs on a fleet that is worth $80m at most (probably more like $40m now) at 9% is $7.2m pa. The interest costs for a new fleet ($1B at the very least) is $90m pa. Then you have costs to train crew, extra spares, extra sims etc etc vs everything already set up.
Literally the only things you save money on are fuel and maintenance. In the current environment, fuel cost differences are negligible, while maintenance differences don’t come close to making up the $81m pa delta.
Only way I see the 78J coming in earlier is if Boeing trades in NZ’s 777 for them and offers a better deal.


They aren’t going to bring the 781 foward as a direct replacement for the 772, it’s more if they decide to park the 772 fleet soon and then they see a turnaround quite soon after, admitting they may run out of time to able to move orders by then.

This will likely be a fairly slow recovery, I think even the 77W fleet may not be safe if things don’t start to show signs of Recovery, they will have a timeframe.

Returning to LHR makes less sense to me.
 
zkeoj
Posts: 1228
Joined: Sun Feb 27, 2005 3:00 am

Re: New Zealand Aviation Thread - March 2020

Mon Mar 30, 2020 8:15 pm

NZ6 wrote:
ZK-NBT wrote:
NZ6 wrote:

It's not that you've been saying these things.... it's to the extent you've been saying them. You're rightly or wrongly expressing an absolute worst possible case

We don't know when it will end. From what I know there's a range of options and scenarios being planned for but it's tricky/risky to act now.

20-30% shrinkage is realistic.



Greg Foran emailed customers today, and said "at least 30%", so definitely more than the 20-30%...

Sad times, and I wish all Air New Zealanders the very best, and hope job losses are being able to be kept to a minimum. These are tough times, and I truly enjoy this thread, and all the contributions, including (or particularly) those of the Air New Zealanders among us. My highest respect to all of you!!!
 
zkncj
Posts: 3876
Joined: Wed Nov 09, 2005 4:57 pm

Re: New Zealand Aviation Thread - March 2020

Mon Mar 30, 2020 8:49 pm

zkeoj wrote:
NZ6 wrote:
ZK-NBT wrote:


Greg Foran emailed customers today, and said "at least 30%", so definitely more than the 20-30%...

Sad times, and I wish all Air New Zealanders the very best, and hope job losses are being able to be kept to a minimum. These are tough times, and I truly enjoy this thread, and all the contributions, including (or particularly) those of the Air New Zealanders among us. My highest respect to all of you!!!


I'm guessing all non New Zealand roles will be gone asap, and any markets they return to will just be handled by third party contractors.

Maybe the Q300 fleet will be parked up for good too? with the operating cost close to that of the ATRs 72-600s, along with there age they would make sense to be on the chopping block.


At 9.50am this morning - in the air over New Zealand:
- 1x A320
- 3x ATR
- 2x Q300s
 
zkncj
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Re: New Zealand Aviation Thread - March 2020

Mon Mar 30, 2020 8:53 pm

Interesting to see LA801 is still operating today, must be very empty?
 
ZK-NBT
Posts: 7500
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Re: New Zealand Aviation Thread - March 2020

Mon Mar 30, 2020 9:00 pm

zkncj wrote:
Interesting to see LA801 is still operating today, must be very empty?


It is interesting, SYD got 2 LAN flights yesterday SCL-SYD, I noticed 1 stopped in PPT on the way back.

Atlas 748 is on its way as the normal QF7552 service, usually operates on a Monday, better late than never.
 
NZ516
Posts: 450
Joined: Thu Aug 29, 2019 12:21 am

Re: New Zealand Aviation Thread - March 2020

Mon Mar 30, 2020 9:10 pm

NZ1 wrote:
PA515 wrote:
Air NZ 77E ZK-OKA returning from maintenance as NZ6003 SIN-CHC on Wed 01 Apr.

https://www.flightradar24.com/data/aircraft/zk-oka

PA515


The entire 77E fleet is earmarked for storage at CHC. Very unlikely they will fly for us again.


That is a real shame but not to be unexpected with the current situation. It's gonna get very crowded soon on the ramp at Christchurch with already 8 320s parked up on the post apron and 5 more 77Es coming down the deep freeze area won't be big enough to accommodate them all. I'm hearing gates will be used for long term parking as well.
 
zkncj
Posts: 3876
Joined: Wed Nov 09, 2005 4:57 pm

Re: New Zealand Aviation Thread - March 2020

Mon Mar 30, 2020 10:12 pm

NZ516 wrote:
That is a real shame but not to be unexpected with the current situation. It's gonna get very crowded soon on the ramp at Christchurch with already 8 320s parked up on the post apron and 5 more 77Es coming down the deep freeze area won't be big enough to accommodate them all. I'm hearing gates will be used for long term parking as well.


Basically the entire international terminal should be free for parking now for the next couple of months?
 
DavidByrne
Posts: 1666
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Re: New Zealand Aviation Thread - March 2020

Mon Mar 30, 2020 10:40 pm

zkncj wrote:
NZ516 wrote:
That is a real shame but not to be unexpected with the current situation. It's gonna get very crowded soon on the ramp at Christchurch with already 8 320s parked up on the post apron and 5 more 77Es coming down the deep freeze area won't be big enough to accommodate them all. I'm hearing gates will be used for long term parking as well.


Basically the entire international terminal should be free for parking now for the next couple of months?

I imagine so. Just checked the international arrivals and departures for CHC today, and there are none at all.
This is not my beautiful house . . . This is not my beautiful wife
 
DavidByrne
Posts: 1666
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Re: New Zealand Aviation Thread - March 2020

Mon Mar 30, 2020 10:46 pm

Kiwirob wrote:
DavidByrne wrote:
And as for a second runway at AKL - that's now pie-in-the-sky for the foreseeable future. AIAL will have many more pressing concerns for a good number of years (like how to balance the books) than worrying about mega-dollar investments. And don't hold your breath for a new terminal either: that will be low priority once traffic stabilises at a lower level than 2019.


Now would be the perfect time for the govt to nationalise AIAL and any other airport they can buy, these are strategic assets and should never have been privatised.

Agree, the airport (and other strategic assets) should never have been sold. But it's extremely unlikely that there will be cash available for such a purchase give the unbudgeted billions of dollars that they're having to borrow to keep the rest of the economy pumped up (sort of). But even under public ownership, I can't see how airport expansion would be a priority for many years to come. NZ has, after all, just handed them a likely more than 30% cushion in terms of traffic.
This is not my beautiful house . . . This is not my beautiful wife
 
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zkojq
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Re: New Zealand Aviation Thread - March 2020

Mon Mar 30, 2020 11:18 pm

Zkpilot wrote:
All this talk of getting rid of 77E and bringing forward 78J Tallis just nonsense.
1) Cheapest fuel in over a decade (fuel efficiency isn’t so important).
2) sale value - 77E are almost worthless to sell now.
3) purchase price of 78J - hundreds of millions which NZ won’t want to be spending anytime soon.
4) finance costs - 77E are fully depreciated etc they basically only cost their maintenance and very cheap leases now vs interest (was it 9%?) and/or lease costs on hundreds of millions.
Nope sorry but with everything that’s going on they aren’t going to bring them forward. They might drop a couple of planes that are surplus but they’re trying to conserve cash.


Well said. CAPEX will be reduced to an absolute minimum for the coming years. I expect all 787-10s and A321neos to be pushed back a few years. Might even convert them down to -9s and A320neos.

A year or so ago, when the A350/777x RFP was coming towards a finale, I remember a lot of people, including myself, wondering if - going forwards - the 77Ws were too bigger aircraft for an increasingly fragmented network. With the prospect of Newark not happening, Chicago being cut and Houston + Vancouver having frequencies reduced, does the retrenchment from the fragmentation strategy mean that 77W sized aircraft are now relevant again for the airline? Presumably they'll be focused on LAX and SFO for the North American network for the time being?

DavidByrne wrote:
NZ6 wrote:
It's not that you've been saying these things.... it's to the extent you've been saying them. You're rightly or wrongly expressing an absolute worst possible case scenario.

Hey I don't mean to upset people by offering negative scenarios. I just call it the way I see it, just as everyone else does on this forum. I get the feeling, though, that some people want this to be a "good news" forum, and don't want unwarranted optimism called out for what it is.


Agreed. I'm not really sure why people are upset with what you said. Others here have offered an entirely "sunshine and rainbows" perspective on Air New Zealand's future for the past months. That's ok too - I'm not going to attack them for voicing that opinion.

Personally, my outlook had become quite bearish in the past few days, especially with suggestions being floated that the travel ban could last for the rest of the year.

NZ1 wrote:
PA515 wrote:
Air NZ 77E ZK-OKA returning from maintenance as NZ6003 SIN-CHC on Wed 01 Apr.

https://www.flightradar24.com/data/aircraft/zk-oka

PA515


The entire 77E fleet is earmarked for storage at CHC. Very unlikely they will fly for us again.


Yikes, that's bad. So which was the last 77E pax service then?
First to fly the 787-9
 
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MillwallSean
Posts: 973
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Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 12:53 am

DavidByrne wrote:
Kiwirob wrote:
DavidByrne wrote:
And as for a second runway at AKL - that's now pie-in-the-sky for the foreseeable future. AIAL will have many more pressing concerns for a good number of years (like how to balance the books) than worrying about mega-dollar investments. And don't hold your breath for a new terminal either: that will be low priority once traffic stabilises at a lower level than 2019.


Now would be the perfect time for the govt to nationalise AIAL and any other airport they can buy, these are strategic assets and should never have been privatised.

Agree, the airport (and other strategic assets) should never have been sold. But it's extremely unlikely that there will be cash available for such a purchase give the unbudgeted billions of dollars that they're having to borrow to keep the rest of the economy pumped up (sort of). But even under public ownership, I can't see how airport expansion would be a priority for many years to come. NZ has, after all, just handed them a likely more than 30% cushion in terms of traffic.


I think we all agree that there wont be cash avaliable for a purchase of any part of Auckland airport by public entities. well have to borrow quite a fair bit as it stands and the publics appetite to borrow for purchasing the airport, I dont see.
BUT the government dont need to purchase anything.
The logical thing here, would be for the government to pay for the upgrades (second runway, new terminal etc) and if the airport cant pay that back within a set timeframe it becomes equity in AIAL. seems fair and it helps both improvoing pone of the countries most important pieces of infrastructure and get the economy back on track again after this shutdown. A huge building project in SW Auckland is after all a pretty good thing. Might start that tramline as well and build it towards mangere while at it.
No One Likes Us - We Dont Care.
 
DavidByrne
Posts: 1666
Joined: Mon Sep 10, 2007 4:42 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 1:29 am

MillwallSean wrote:
I think we all agree that there wont be cash avaliable for a purchase of any part of Auckland airport by public entities. well have to borrow quite a fair bit as it stands and the publics appetite to borrow for purchasing the airport, I dont see.
BUT the government dont need to purchase anything.
The logical thing here, would be for the government to pay for the upgrades (second runway, new terminal etc) and if the airport cant pay that back within a set timeframe it becomes equity in AIAL. seems fair and it helps both improvoing pone of the countries most important pieces of infrastructure and get the economy back on track again after this shutdown. A huge building project in SW Auckland is after all a pretty good thing. Might start that tramline as well and build it towards mangere while at it.

However it’s paid for, someone will have to borrow the money initially. The question will be how much sense airport expansion will make compared to all the other infrastructure projects that are also decades late in coming to fruition. We know NZ is forecasting an airline less than 70% the size of today’s; other carriers will surely be in the same situation. How will other infrastructure projects measure up post-virus? Too early to tell. But I’m certain that “nice-to-have” projects won’t get a look in, and from what I can see the runway and terminal fall into that category. We will have many other things to worry about, not least paying back the debts incurred in the last month and the ones we’ll undoubtedly incur before the virus is beaten. There’s no free lunch here.
This is not my beautiful house . . . This is not my beautiful wife
 
NZ6
Posts: 1598
Joined: Fri Jan 22, 2010 6:50 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 2:44 am

SelandiaBaru wrote:
DavidByrne wrote:
NZ6 wrote:
It's not that you've been saying these things.... it's to the extent you've been saying them. You're rightly or wrongly expressing an absolute worst possible case scenario.

Hey I don't mean to upset people by offering negative scenarios. I just call it the way I see it, just as everyone else does on this forum. I get the feeling, though, that some people want this to be a "good news" forum, and don't want unwarranted optimism called out for what it is.

I've looked back over my posts over the last couple of weeks, and I don't think there's much I would change. Much of what I've said which was pooh-poohed at the time has already come to pass. Some of the issues I've raised a week ago about the the crisis for the travel industry probably lasting a long time now been publicly spoken about by our PM (she suggested 12-18 months). I don't claim any special insight, other than being a keen student of global affairs as well as the airline industry.

I'm genuinely sorry if my pessimism has upset people. I've recorded my agreement on a number of occasions in the last fortnight with posters who have taken a more nuanced view. But I don't see why unbridled optimism should get a free ride.

aerokiwi wrote:
You even have to qualify the experts' assessments with your videoconferencing and fare discounting predictions.

Eh? So just because the "experts" (which another poster said were just stating the obvious anyway) didn't mention something in a short TV interview that means it can't be a thing? Or that I can't offer an alternative view on the likelihood of fare discounting? Is there a script or something which I am not aware of?


It doesn't upset me and this is my livelihood that is under threat. As Foran has stated on a number of occasions over the last few weeks they make some working assumptions and think they're being conservative and then things get worse.

Thinking of different possible realities is worthwhile, it's worthwhile to challenge them with the information we have but it's worthwhile to mentally prepare for what could happen.

The whole things sucks but it is what it is. I just hope Air New Zealand survives and in that hope I don't lose everything I've spent 17 years building up.

For me discussing different potential outcomes does not upset me.


Very well said and I agree and feel the exact same way.

The brand WILL live on even if the worst case scenario is they go backwards 50 years. Something I'm putting serious consideration into not being apart of.

Closing the border, going into "lock down" and the USA/Europe situation has moved my personal outlook towards the negative end of the scale over the last few weeks. But I still remain strongly of the opinion, this is all unknown to EVERYONE. and we cannot predict worst case scenario as fact. China has been recovering for sometime now. Very little new cases and the economy is bounced back quicker than experts predicted.

It's very easy to be lead by the media into this line of thinking as almost everything being reported is negative, even the positive stories are written with a negative undertone to them. Pandemic experts publish their expert analysis which is shared by the media with horrifying headlines such as worst case scenario death rates even though we've not even come close to in them in the 4 most effected countries.

Based on some outcomes being suggested, it does beg the question why only 30% reduction is needed. There seems to be a real conflict there somewhere.
 
NZ6
Posts: 1598
Joined: Fri Jan 22, 2010 6:50 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 2:51 am

zkeoj wrote:
NZ6 wrote:
ZK-NBT wrote:


Greg Foran emailed customers today, and said "at least 30%", so definitely more than the 20-30%...

Sad times, and I wish all Air New Zealanders the very best, and hope job losses are being able to be kept to a minimum. These are tough times, and I truly enjoy this thread, and all the contributions, including (or particularly) those of the Air New Zealanders among us. My highest respect to all of you!!!


Is there some dispute here?

I'm saying 20-30% which is my prediction
Greg is saying at least 30%

I'd say it's pretty much on par with each other given the information I've seen, heard, been told and working on and the end result is NOT known. It could well be 40% it could be 27%.

Naturally Foran would articulate that end of the estimate when he's (unfortunately) needing to remove over 3,000 employees from the business. He can't incorporate a message of hope and optimism in the message can he.

It's not like I'm suggesting 5% and he's saying 80%. Gee we can get caught up the finer details here can't we.
 
DavidByrne
Posts: 1666
Joined: Mon Sep 10, 2007 4:42 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 2:53 am

NZ6 wrote:
Based on some outcomes being suggested, it does beg the question why only 30% reduction is needed. There seems to be a real conflict there somewhere.

Foran said that it would be "at least" a 30% reduction. You might be surprised to know that I thought it would be less than that!
This is not my beautiful house . . . This is not my beautiful wife
 
NZ6
Posts: 1598
Joined: Fri Jan 22, 2010 6:50 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 2:59 am

DavidByrne wrote:
Kiwirob wrote:
DavidByrne wrote:
And as for a second runway at AKL - that's now pie-in-the-sky for the foreseeable future. AIAL will have many more pressing concerns for a good number of years (like how to balance the books) than worrying about mega-dollar investments. And don't hold your breath for a new terminal either: that will be low priority once traffic stabilises at a lower level than 2019.


Now would be the perfect time for the govt to nationalise AIAL and any other airport they can buy, these are strategic assets and should never have been privatised.

Agree, the airport (and other strategic assets) should never have been sold. But it's extremely unlikely that there will be cash available for such a purchase give the unbudgeted billions of dollars that they're having to borrow to keep the rest of the economy pumped up (sort of). But even under public ownership, I can't see how airport expansion would be a priority for many years to come. NZ has, after all, just handed them a likely more than 30% cushion in terms of traffic.


30% doesn't mean a 30% decrease in AKL movements

That 30% is 30% of the overall airline and just one airline for AIAL

AIAL was bursting at the seams at International. Like I've said before. It buys AIAL time. Air travel will return. Airlines will return. Building a second runway is a long term project being built for the future long term.

When the time is right, build it, build it early. Hopefully they wont be short sighted with it, but it doesn't mean let's get the spades out after lockdown.

The government won't have the money to buy back assets at this time otherwise I've been supportive of this idea.
 
NZ6
Posts: 1598
Joined: Fri Jan 22, 2010 6:50 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 3:16 am

zkojq wrote:
NZ1 wrote:
PA515 wrote:
Air NZ 77E ZK-OKA returning from maintenance as NZ6003 SIN-CHC on Wed 01 Apr.

https://www.flightradar24.com/data/aircraft/zk-oka

PA515


The entire 77E fleet is earmarked for storage at CHC. Very unlikely they will fly for us again.


Yikes, that's bad. So which was the last 77E pax service then?


Not 100% yet.

Correct me if I'm wrong here, being stored and very, very unlikely they will be needed within the next 12-18 months given all 14x 789's are airworthy (looking ahead to peak NW21/22) From there we start getting into or very close to the overlap of the 787-10 order (should that continue) at which point they started to exit the fleet anyway.

The question mark is around the potential order for when the 772 exit and how slowly it takes to recover the market bearing in mind NZ keeping some for that wonderful "spring day" of sunshine vs offloading them all in a market saturated with unwanted equipment that's for sale.

Without question, some will go earlier than expected.
 
NZ6
Posts: 1598
Joined: Fri Jan 22, 2010 6:50 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 3:20 am

DavidByrne wrote:
NZ6 wrote:
Based on some outcomes being suggested, it does beg the question why only 30% reduction is needed. There seems to be a real conflict there somewhere.

Foran said that it would be "at least" a 30% reduction. You might be surprised to know that I thought it would be less than that!


Because no one knows where and when this will end.

At least means it could be more and isn't be capped at 30%.He can't lock himself into anything here.
 
ZK-NBT
Posts: 7500
Joined: Mon Oct 16, 2000 5:42 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 3:39 am

zkojq wrote:
Zkpilot wrote:
All this talk of getting rid of 77E and bringing forward 78J Tallis just nonsense.
1) Cheapest fuel in over a decade (fuel efficiency isn’t so important).
2) sale value - 77E are almost worthless to sell now.
3) purchase price of 78J - hundreds of millions which NZ won’t want to be spending anytime soon.
4) finance costs - 77E are fully depreciated etc they basically only cost their maintenance and very cheap leases now vs interest (was it 9%?) and/or lease costs on hundreds of millions.
Nope sorry but with everything that’s going on they aren’t going to bring them forward. They might drop a couple of planes that are surplus but they’re trying to conserve cash.


Well said. CAPEX will be reduced to an absolute minimum for the coming years. I expect all 787-10s and A321neos to be pushed back a few years. Might even convert them down to -9s and A320neos.

A year or so ago, when the A350/777x RFP was coming towards a finale, I remember a lot of people, including myself, wondering if - going forwards - the 77Ws were too bigger aircraft for an increasingly fragmented network. With the prospect of Newark not happening, Chicago being cut and Houston + Vancouver having frequencies reduced, does the retrenchment from the fragmentation strategy mean that 77W sized aircraft are now relevant again for the airline? Presumably they'll be focused on LAX and SFO for the North American network for the time being?

DavidByrne wrote:
NZ6 wrote:
It's not that you've been saying these things.... it's to the extent you've been saying them. You're rightly or wrongly expressing an absolute worst possible case scenario.

Hey I don't mean to upset people by offering negative scenarios. I just call it the way I see it, just as everyone else does on this forum. I get the feeling, though, that some people want this to be a "good news" forum, and don't want unwarranted optimism called out for what it is.


Agreed. I'm not really sure why people are upset with what you said. Others here have offered an entirely "sunshine and rainbows" perspective on Air New Zealand's future for the past months. That's ok too - I'm not going to attack them for voicing that opinion.

Personally, my outlook had become quite bearish in the past few days, especially with suggestions being floated that the travel ban could last for the rest of the year.

NZ1 wrote:
PA515 wrote:
Air NZ 77E ZK-OKA returning from maintenance as NZ6003 SIN-CHC on Wed 01 Apr.

https://www.flightradar24.com/data/aircraft/zk-oka

PA515


The entire 77E fleet is earmarked for storage at CHC. Very unlikely they will fly for us again.


Yikes, that's bad. So which was the last 77E pax service then?


It to me does make it more plausible that the whole long haul fleet may be 789s. Personally so long as each city NZ serves in the US has recovered enough to resume service, some smaller aircraft lower frequency. I think they will given the cost to build a route up only to drop it when it was doing well, I think the OZ-US market will be important for NZ to get back to and rebuild, maybe more narrow bodies to ADL etc along with the Islands. EWR will imo be delayed.

I can’t see a 77W sized aircraft being relevant long term for NZ, well LAX/SFO sure and that’s 781 territory if they get them.
 
DavidByrne
Posts: 1666
Joined: Mon Sep 10, 2007 4:42 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 4:46 am

NZ6 wrote:
DavidByrne wrote:
[NZ has, after all, just handed them a likely more than 30% cushion in terms of traffic.


30% doesn't mean a 30% decrease in AKL movements

That 30% is 30% of the overall airline and just one airline for AIAL

OK, OK then, if we are going to split hairs: NZ has just handed them a “substantial” cushion.

The main point though is that AIAL is unlikely to have the wherewithal itself, and will be very chary about borrowing large sums, given that we’re heading into a recession that shows every sign of reducing GDP by more than the Great Depression did. If I was an AIAL director I’d be holding right back to see how much traffic recovers before even thinking about an investment like that.

It’s a nice idea to get AKL properly sorted, and I know you don’t want to hear me say so, but realistically it just ain’t going to happen.
This is not my beautiful house . . . This is not my beautiful wife
 
zkncj
Posts: 3876
Joined: Wed Nov 09, 2005 4:57 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 6:09 am

ZK-NBT wrote:
zkncj wrote:
TaniTaniwha wrote:

I like the way you think. If only this would be the case. I think reducing capacity is more related to number of aircraft, or size of aircraft rather than sheer number of seats. Would be nice tho.


That or the 77E's get an freight conversion done, NZ is operating 787/777s current only freight only flights to at-least bring some revenue back in.


No freight conversion available on the 772. That would take months per aircraft, I understand the problem on the 772 is the floor beams would need reinforcing at significant cost which is why no one has offered this.


https://twitter.com/CamWallace_NZ/status/1244770714722295808

Seems to be something they are look into though, which then could become demand for cargo conversation solutions for 777s over the next year. Passengers are down but cargo still needs to move.
 
ZK-NBT
Posts: 7500
Joined: Mon Oct 16, 2000 5:42 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 6:16 am

zkncj wrote:
ZK-NBT wrote:
zkncj wrote:

That or the 77E's get an freight conversion done, NZ is operating 787/777s current only freight only flights to at-least bring some revenue back in.


No freight conversion available on the 772. That would take months per aircraft, I understand the problem on the 772 is the floor beams would need reinforcing at significant cost which is why no one has offered this.


https://twitter.com/CamWallace_NZ/status/1244770714722295808

Seems to be something they are look into though, which then could become demand for cargo conversation solutions for 777s over the next year. Passengers are down but cargo still needs to move.


Hmm interesting thanks for that, no 777 has yet had pax to freight conversion. I think they are looking at something temporary? The 77W is what the 777BCF is going to based off.
 
zkncj
Posts: 3876
Joined: Wed Nov 09, 2005 4:57 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 6:46 am

ZK-NBT wrote:
zkncj wrote:
ZK-NBT wrote:

No freight conversion available on the 772. That would take months per aircraft, I understand the problem on the 772 is the floor beams would need reinforcing at significant cost which is why no one has offered this.


https://twitter.com/CamWallace_NZ/status/1244770714722295808

Seems to be something they are look into though, which then could become demand for cargo conversation solutions for 777s over the next year. Passengers are down but cargo still needs to move.


Hmm interesting thanks for that, no 777 has yet had pax to freight conversion. I think they are looking at something temporary? The 77W is what the 777BCF is going to based off.


Some airlines have removed seats, and bulk loaded cargo into the cabin.
 
NZ6
Posts: 1598
Joined: Fri Jan 22, 2010 6:50 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 7:54 am

DavidByrne wrote:
NZ6 wrote:
DavidByrne wrote:
[NZ has, after all, just handed them a likely more than 30% cushion in terms of traffic.


30% doesn't mean a 30% decrease in AKL movements

That 30% is 30% of the overall airline and just one airline for AIAL

OK, OK then, if we are going to split hairs: NZ has just handed them a “substantial” cushion.

The main point though is that AIAL is unlikely to have the wherewithal itself, and will be very chary about borrowing large sums, given that we’re heading into a recession that shows every sign of reducing GDP by more than the Great Depression did. If I was an AIAL director I’d be holding right back to see how much traffic recovers before even thinking about an investment like that.

It’s a nice idea to get AKL properly sorted, and I know you don’t want to hear me say so, but realistically it just ain’t going to happen.


Not splitting hairs, CHC-SIN as one example is part of the 30% and other carriers may(??) return.

Also 30% can be measured many many different ways.

Borrowing while interest rates are extremely low and construction costs are also low is also a very wise which means a great time to build.
 
zkeoj
Posts: 1228
Joined: Sun Feb 27, 2005 3:00 am

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 8:52 am

zkncj wrote:
ZK-NBT wrote:
zkncj wrote:

https://twitter.com/CamWallace_NZ/status/1244770714722295808

Seems to be something they are look into though, which then could become demand for cargo conversation solutions for 777s over the next year. Passengers are down but cargo still needs to move.


Hmm interesting thanks for that, no 777 has yet had pax to freight conversion. I think they are looking at something temporary? The 77W is what the 777BCF is going to based off.


Some airlines have removed seats, and bulk loaded cargo into the cabin.


And that's what Cam Wallace was about. If you scroll down a bit he answers this questions: Full freighter conversation or just removing interior for bulk load through PAX doors?
CW: Correct - bulk hold removal for pax door manual loading.
and
Very interesting... assume you're not meaning a full freighter conversion? And are you looking at something that could potentially be done here vs overseas?
CW: Just a modification so we can get more cargo into the passenger deck.
 
Deepinsider
Posts: 171
Joined: Thu Dec 08, 2016 10:36 am

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 9:40 am

zkncj wrote:
ZK-NBT wrote:
zkncj wrote:

https://twitter.com/CamWallace_NZ/status/1244770714722295808

Seems to be something they are look into though, which then could become demand for cargo conversation solutions for 777s over the next year. Passengers are down but cargo still needs to move.


Hmm interesting thanks for that, no 777 has yet had pax to freight conversion. I think they are looking at something temporary? The 77W is what the 777BCF is going to based off.


Some airlines have removed seats, and bulk loaded cargo into the cabin.

No need for any conversions in the present crisis.
The 772 can carry a massive amount in the holds,
and right now we can assume it's high value stuff.
Mr. Foran said recently the 789 could carry 11 containers,
the 772 will be similar or better. Fuel is cheap, no case to
spend millions on a conversion.
 
NZ516
Posts: 450
Joined: Thu Aug 29, 2019 12:21 am

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 9:54 am

Actually it's 11 pallets the 789 can carry. Pallets are larger than containers. If it was all loaded up with containers or cans, then it could take 22 of them. Such as AKEs one common type mostly used for bags and freight on every wide body aircraft. Plus a few more tonnes can be manually loaded in the bulk hold.
 
777ER
Head Moderator
Posts: 10110
Joined: Fri Dec 19, 2003 5:04 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 31, 2020 11:59 am

April 2020 thread viewtopic.php?f=3&t=1443793
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