Aviation Sector Awaits A380 Effect

New Boeing 777 aircraft are arriving, with the full complement of eight to be in service by the end of this year. On the Tasman and Pacific services, where low-cost rivals are making inroads, Air New Zealand is merging its fleet of A320 planes with those flying the Freedom brand, putting them all into one operating unit.

Customers, says the airline, should not notice any difference in service.

Airline analyst at Goldman Sachs JB Were, Peter Sigley, says he is interested the kind of impact Emirates and the introduction of the A380 might have in this part of the world. There is a chance Emirates could even fly it across the Tasman, as part of its Dubai-Australia services.

Sigley is looking for 2006 to be the year when restructuring, rebranding and changes of the past few years will be truly put to the test at Air New Zealand - when we see if they will make a meaningful difference to the bottom line.

"Our expectation would be that 2006 could be a relatively slow year in terms of the [visitor] arrivals environment, in which terms a lot of what they are doing could be around regaining market share," he says.

Sigley says another thing to watch for this year is the possible announcement of new routes into Asia (a Shanghai service is in the advanced planning stages) and the possibility of new flights into the UK.

When it comes to the ailing Air New Zealand share price, Sigley says prospects for a recovery are "starting to look quite reasonable".

"Maybe they've just turned the corner. When you see airlines start to perform, they tend to do it with a bang - when it happens, it happens quickly.

"Without wanting to prejudge it, there are signs that things are coming into alignment."

The spin-off

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