Plane orders from Auckland to India show travel boom’s longevity

Qantas Airways Ltd. and Air New Zealand Ltd. have both snapped up new planes to boost previous multibillion dollar aircraft orders, suggesting aviation’s lucrative post-Covid travel boom is far from over despite concerns about sky-high fares.  

Australian national carrier Qantas on Thursday purchased 12 Boeing Co. 787s and 12 Airbus SE A350s jets to replace its fleet of aging Airbus A330s that shuttle to Asia and the US. The airline has options to buy even more of the aircraft over the next decade.

In Auckland, Air New Zealand said it was buying two 68-seat propeller-driven ATR72s to ply short domestic routes, along with two more Airbus A321s — capable of flying more than 200 people to Australia and the Pacific Islands.

The rival airlines, whose bases are separated by a three-hour flight across the Tasman Sea, announced their race to get more planes in the skies as each returned to profit following the pandemic. Underpinning the earnings — and soaring ticket prices — is an enduring mismatch between travel demand and available seats.

It’s a similar picture in many parts of the world. From India’s IndiGo to Ryanair Holdings Plc in Europe, airlines are lining up jet deliveries stretching into the next decade as an insatiable appetite for international flights collides with a shortage of new planes.

“Fundamentally, travel demand is extremely robust,” outgoing Qantas Chief Executive Officer Alan Joyce said, announcing his last set of results before handing over in November to current finance chief Vanessa Hudson. “We can afford to invest and grow — especially in new aircraft.”

Soaring Demand

Airlines are wary of holding back on plane orders because the waiting times for the most popular jets made by Boeing and Airbus are already years-long. 

“It’s very hard to get new aircraft now,” Joyce said. 

Qantas’s order marks its third major plane purchase in less than two years. In late 2021, it unveiled a multibillion dollar deal with Airbus to replace its short-range Boeing domestic workhorses. Months later, Qantas ordered a dozen ultra-long-range Airbus A350-1000s for direct flights connecting Australia’s east coast with New York and London — some of the world’s longest hauls — due to start in late 2025.

Air New Zealand’s new purchase means the airline has 16 aircraft — eight Boeing 787 Dreamliners, six Airbus A321s and two ATR72s — scheduled for delivery between 2024 and 2028.

Post-Covid demand for seats has been fueling concerns about the soaring cost of air travel. Still, Air New Zealand CEO Greg Foran said that while the extra capacity afforded by the new planes will help ease pressure on fares, there’s little chance of a return to the pre-coronavirus prices of 2019.

“Flying continues to be in high demand, both here and around the world, and it means prices have been higher than usual,” he said. “Our costs continue to rise significantly in many areas, and the reality is that airfares are unlikely to return to pre-pandemic levels.” 

Auckland Airport, New Zealand’s main gateway, on Thursday announced its first underlying profit and dividend in three years. In the 12 months ended June, passengers jumped 183% to 15.9 million, the airport said.

The airport said trans-Tasman capacity is back to 96% of pre-pandemic capacity, while flying between Auckland and North America is set to exceed 2019 levels during the southern hemisphere’s summer season.