Air NZ aims for $100 million fuel saving
Air New Zealand is looking to save more than $100 million in fuel costs a year as it puts smaller planes on services to London.
Surging oil prices are causing airlines around the world to brace for slower growth, tighter earnings and deeper cost cutting.
Last week Air France KLM warned it would have to expect a 1.1 billion euro ($NZ2.25 billion) rise in fuel costs, squeezing profits this year and forcing it to find 150 million euros in savings.
Air NZ chief executive Rob Fyfe said his company was well positioned relative to other airlines with a good in-flight product, network and young fleet, The Dominion Post reported today.
"We do not intend to be part of the carnage that will result over coming months," he said.
Air NZ plans to replace its 379-seat Boeing 747-400 on the Auckland-to-London service, via Los Angeles, from late September with a more fuel-efficient, twin-engine 313-seat Boeing 777-200ER.
"Down-gauging along will save us over $100 million per year in reduced fuel cost."
A month ago, Air NZ said it expected rising fuel prices to lower its operating profit.
It did not expect to better its $268m profit before unusuals and tax in 2007, forecasting instead a result of between $200m and $220m.
From today the airline's trans-Tasman and Pacific Island airfares are rising an average 3 percent to counter rising fuel prices.
In January Air NZ said it was cutting domestic airfares by up to 30 percent to fill increased numbers of seats.
But by the end of April, it had announced its second increase in domestic fares in six weeks due to record jet fuel prices, with a 3 percent increase following a 3 percent rise on domestic, trans-Tasman and Pacific Island airfares announced in March.