Brook Sabin: Air NZ is weak — its new CEO needs to deliver cheaper fares and growth

Friday, 7 March 2025

Brook Sabin is a travel reporter at Stuff.

OPINION: Imagine an airline that’s growing. It’s launching new routes to Europe, Asia, the South Pacific, and even starting international flights to and from New Zealand regions.

Well, this airline exists: it’s not Air New Zealand. It’s their arch-rival, Qantas. (Or more precisely, Qantas Group the parent company of Qantas and its budget offshoot, Jetstar).

There’s no doubt Air NZ is under serious pressure from Qantas. Now, with CEO Greg Foran stepping down, the airline needs a leader who can turn things around.

Air NZ’s current predicament — slashing routes and frequencies due to engine problems — is, of course, not Foran’s fault. He has been dealt a very bad hand.

But under his leadership, you can’t look past the fact that the airline slashed roughly a third of its long-haul fleet during Covid by permanently grounding eight 777-200s.

I think this decision did a lot of damage: we are an island nation where almost every person arrives by air, and taking these huge planes permanently out of service has cost the country untold millions, if not billions.

Not having these jets has allowed airlines like Qantas, Fiji Airways, and the big American carriers to eat up valuable market share — something Air NZ took decades to build up.

You need to think of planes as bridges connecting New Zealand to the world. And having as many New Zealand-owned bridges as possible means more control over our connectivity, more competition to keep fares in check, and ultimately, more benefits for travellers and the economy. That’s why the government bailed out Air NZ all those years ago: it’s a national asset.

I wrote in 2023 how I thought slashing the long-haul fleet was a mistake, and the airline’s management got in touch, saying the jets had major engine maintenance due and it didn’t make sense to keep them. Well, I’d argue a smaller Air NZ, with fewer long-haul jets, isn’t in New Zealand’s best interest. Foran’s strategy during Covid was to emerge leaner (aka smaller) and I think that was a big error given how quickly travel rebounded.

Under pressure to show things were turning a corner, Air NZ even “announced” it was expanding capacity with eight new 787 jets back in 2023. This wasn’t new. The order was first placed in 2019, before Foran started the job. The only new element appeared to be that they’d swapped to the smaller 787-9, instead of the larger 787-10 originally ordered. A capacity reduction.

All up, by 2027, Air NZ still won’t have the same number of long haul jets that it did in 2019, before Covid hit.

In more recent years, the airline has been hit hard by engine problems outside its control that have severely exacerbated its already stretched fleet. It has had to lease long haul planes to try and ease the pressure.

All of this has added up to a loss of market share on key routes — with Qantas Group (including Jetstar) now having more international seats out of Wellington and Christchurch.

Air NZ has also cut back on Cook Islands flights, which has impacted its economy. It has also reduced frequencies elsewhere in the Pacific.

Qantas Group has done the opposite. Post-Covid, it has launched new routes from Australia to places as far away as France and Japan. Closer to home, it’s launched or increased services to the Cook Islands, Samoa, Tonga, Vanuatu, and even locations like Palau. Qantas would love to see the main gateway to the South Pacific become Sydney — not Auckland, as it always has been.

A perfect example of Qantas’ dominance is the Auckland to New York route. This was launched with much fanfare as Air NZ’s flagship route, but Qantas has since overtaken it, by operating five times a week compared to Air NZ’s three.

New York has been Air NZ’s only new international route post-Covid, and even there, Qantas is outperforming it.

Jetstar is even starting flights from Dunedin and Hamilton to Sydney, providing a huge injection of cash to regional economies.

Another example of Air NZ’s struggle is on routes to Fiji. The national carrierpreviously had seasonal flights from Christchurch and Wellington to Nadi. That’s long gone. Instead, Fiji Airways now exclusively operates these routes year-round and even outperforms Air NZ on its Auckland to Nadi service with more seats each day.

Fiji Airways is even trying to assert itself as a dominant South Pacific airline, with cheap deals through its Nadi hub to places like Tonga and Samoa.

I wrote when Covid hit that airlines would have a once-in-a-lifetime chance to reset the chessboard. Their strategy during Covid would directly impact the airlines for years ahead. Should they plan for a leaner future post-Covid, or one where demand bounced right back? Foran planned for the former, and I think it’s set the airline back years.

It’s time for a CEO who wants to aggressively take back market share from Qantas. To make sure Air NZ is the main international carrier out of the South Island and Wellington. It’s time to reassert dominance in the South Pacific. It’s time to grow domestically and outline a clear path for international growth and new routes. It’s time to start getting excited about what our national carrier can do. It’s time for a CEO who can take back the skies.

What do you think of Air NZ’s post-Covid strategy? And who do you think should lead the airline next? Let us know in the comments below.