Aviation Sector Awaits A380 Effect

There is a total of 159 "orders and commitments" for the massive new plane, though not all are for the passenger model, with the world's cargo operators keen to start using the freighter version, which is yet to fly.

And the giant jet - while not expected to be a regular visitor to Auckland, will be flying not too far from us, with Singapore Airlines first deploying it on the Sydney-Singapore-London route.

There is a total of 159 "orders and commitments" for the massive new plane, though not all are for the passenger model, with the world's cargo operators keen to start using the freighter version, which is yet to fly.

Emirates, the Dubai-based airline that has been flying to New Zealand for just over two years, may again shake up the local aviation scene with its anticipated Auckland-Dubai direct flights.

With the biggest single order for A380s among the world's airlines, there's every chance that a few of the 48 white and gold Emirates double-decked jumbo jets will be making the flight to New Zealand - tacked onto Australia-Dubai services.

Emirates New Zealand head Chris Lethbridge says more direct services between the Middle East and New Zealand will allow the airline to better target the European market.

Such a move will open up a rival direct route to Europe for New Zealand travellers, who now travel via Asian hubs such as Singapore and Hong Kong, or US cities such as Los Angeles.

Lethbridge says Dubai is now established as an alternative stopover destination for New Zealanders travelling to Europe, a status that can only improve with the introduction of Auckland-Dubai nonstop flights.

"Dubai has certainly become the flavour of the month with New Zealand tourism as a stopover," he says. What was previously unheard of and difficult to get to now features on the itineraries of many Kiwi travellers.

The state of the business in New Zealand is absolutely superb, says Lethbridge, with very strong forward loads. "From a growth point of view, we've had a tremendous year this year."

Emirates won an airline of the year award from one of the major aviation consultancies in the region, the Centre for Asia Pacific Aviation. At a recent conference sponsored by the centre, the head of its financial analysis unit, Timothy Ross, said the recent outsourcing move by Air New Zealand and the likelihood that Qantas may head down the same path could be the start of an industry-wide trend.

Centre director Peter Harbison says 2006 may be "the quiet before the storm" - a period when airlines need to consolidate and put in place the necessary foundations for a massive upgrading of fleets and route systems.

In the centre's roundup of the region's airlines, Air New Zealand's relentless attack on operating costs is heartily endorsed.

"Air New Zealand's progress towards establishing itself as a viable, long-term competitor in its own right will depend on the airline's ability to further reduce operating costs to strengthen returns - in particular on the Tasman.

"As with Qantas, the airline is driving to enhance productivity through progressive labour reforms and more flexible working. It is improbable that these changes will be introduced without upheaval."

For Air New Zealand, 2006 will be the first full year in the job for new chief executive Rob Fyfe, who as former No 2 took over the top job from Ralph Norris.

The first few months of this year will be dominated by the plan to outsource all heavy maintenance of its long-haul fleet, with the possible loss of 600 jobs.

Some way of staunching heavy losses on the "bloodbath" Tasman routes is also being pursued by the airline as it investigates different ways of cutting capacity.

Any such cut needs Qantas to play its part too, which will attract the gaze of anti-competition authorities, particularly our own Commerce Commission, which spent the best part of two years investigating and ultimately rejecting an earlier application from the two airlines for a merger/alliance.

By the end of next year Air New Zealand would have finished revitalising its long-haul fleet of aircraft. This involves the complete refit of its Boeing 747-400s.

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