AIR NEW ZEALAND: Investor Day presentation shows plans for new destinations worldwide and a new loyalty tier

Air New Zealand held an Investor Day earlier this week. The key presentation, available online, indicates two interesting developments. The first is an expansion of routes and destinations once new aircraft arrive, and the other is the creation of a new tier in their loyalty program, Airpoints.

New Destinations posed at Investor Day

Air New Zealand is set to bolster its global presence and cater to its Kiwi clientele’s travel preferences. Air NZ has suffered badly from the aircraft and parts supply chain issues that arose after the COVID pandemic’s first three or so years. That shortfall in aircraft looks to be ending, bringing with it the possibility of extending its network. Air NZ has prioritised the United Kingdom but also has eyes for France and Germany in Europe.

But wait, there’s more. Air New Zealand is also eyeing Asia, including India, Malaysia, the Philippines, and Thailand, for direct flights.

Currently, Air New Zealand relies heavily on its joint venture partner, Singapore Airlines, to serve these routes. At the Investor Day 2024 on November 25, Air NZ displayed its own ambitions for expanding into some Asian and European routes.

The presentation notes that there are currently no direct flights between New Zealand and India, nor to the Philippines or Thailand. However, Malaysia Airlines does have a daily service between Auckland and Kuala Lumpur.

London calling

Recent speculation suggests a possible resumption of flights to London—a route that was abandoned in early 2020. Air NZ used to service London via Los Angeles. Replacing the slots at Heathrow it had, but sold for NZ$42 million, it now has gained a slot at Gatwick. And you don’t want to leave such a valuable slot idle for long. Given that the UK is a favourite destination for Kiwis with European heritage, I suspect, aircraft permitting, that London will be the first cab off the rank.

The debate then revolves around what city they will use as a stopover for the London route from Auckland. In the past, they used Los Angeles and Hong Kong. Other speculated options are Houston, New York, Singapore or even Vancouver. I’m going to add another possibility into the mix. I’m thinking Perth, so they can run in direct competition to the most profitable route Qantas runs.

I’m no route planner, so don’t ask me about the suitability of such an itinerary as far as aircraft suitability, fuel, economics, etc. But I do find it interesting that maybe Air New Zealand is the other airline Alex Macheras didn’t name that was looking at the route besides British Airways on his On-Air Podcast last week.

NZ travel economics

International travellers make up over a third of Air New Zealand’s passenger base and generate twice the revenue of domestic routes. That makes the expansion of Air NZ’s international routes strategically and economically significant. The overwhelming majority (50%) are leisure travellers. Only 12% fly for business, while the remaining 38% visit friends and relatives.

At the Investor Day, the opportunity of ‘premiumisation’ (ugh!) in long-haul was highlighted for 2025. That’s because AirNZ will have its new Business Premier seats and Business Premier Luxe suites available on new arriving aircraft. The airline hopes that this product improvement will seduce premium passengers to choose the airline. The new seats will greatly improve the now rather dated reverse herringbone business seats that the airline currently sports.

Introducing a New Airpoints loyalty tier

The Investors Day event also confirmed that Air New Zealand will be introducing a new top tier to cater to high-flying, high-spending loyalists. This move is a strategic response to the increased competition from rivals, I’m looking at you Qantas with your status matching offers to other loyalty scheme members, but in particular Airpoints members!

The highest tier in the Airpoints program is Elite, above Silver and Gold. However, speculation about a new un-named ‘Elite Plus’ tier has been rampant since at least 2020 because of responses to an Elite member survey regarding possible new benefits. Potential benefits included everything from same-day flight change for free, immediate upgrade confirmations, free preferred seating, an Airpoints bonus earn of 50% and even free parking at home airports.

Air NZ has yet to launch a branded credit card, an overlooked potential earner. CEO Greg Foran has previously hinted at it, but we have yet to see the airline introduce such lucrative revenue. Complimentary Elite staus for a family member, free flights and lifetime status have also been floated.

2PAXfly Takeout

Looks like Air New Zealand is thinking big both on potential route expansion and loyalty innovations. Given the number of international travellers that form their customer base, they need to have a loyalty focus that goes beyond the domestic.

I rarely fly Air New Zealand, preferring to boost my status credits with Qantas. On the few occasions I have flown with them, I have enjoyed the experience. The hospitality is casually attentive and friendly. Similar to what you get on Fiji Airlines, and Qantas and Virgin Australia. Once they upgrade those Business Class seats, I will definitely consider them for long-haul.

Bring on London!