Good afternoon, everyone, and welcome to Air New Zealand's Annual Shareholder Meeting for 2024. My name is Therese Walsh, and I am the Chair of Air New Zealand's board, and we are very pleased to be able to join you here today from Ōtautahi, Christchurch. Thank you, and welcome to those of you who could join us here in person today. Kia ora [Foreign language], and this meeting is also being webcast live for those unable to physically attend, and at Air New Zealand, we are committed to making our meetings as accessible as possible, regardless of the physical location, and we hope that our hybrid meeting will continue to support greater participation and engagement with our shareholders. On behalf of the board and the executive team, I would like to extend a very warm welcome to you all.
We value and appreciate your interest and continued support of the airline. Before we begin our formal proceedings today, I would like to introduce you to my fellow Air New Zealand board members. From my far right, we have Laurissa Cooney, Dean Bracewell, and Alison Gerry. And from my far left, we have Paul Goulter, Claudia Batten, and our CEO, Greg Foran. Larry De Shon, our U.S.-based director, is also joining us remotely today, and he is all the way in Florida. Seated in the front row we have Richard Thomson, our CFO.
Kia ora.
Our General Counsel and Company Secretary, Jennifer Page. Chris Goddard from Bell Gully, the company's lawyers. And we also have Melissa Collier from Deloitte, the company's auditor, on behalf of the Auditor-General, online today. We also have members of Air New Zealand's executive team and our share registrar, MUFG, present today, as well as our investor relations team. Before we go any further with the formalities of the day, I would like to take this opportunity to thank Paul Goulter. Paul is retiring at the conclusion of today's meeting. Paul has made a significant contribution in his time as a director of Air New Zealand, particularly with his deep industrial relations experience. And given that we have a workforce that is more than 70% unionized, his insights and guidance during his time with us have been invaluable, and I would like to thank him for his significant contribution.
Turning to the formalities of the meeting, I note, based on the information conveyed to me, there is a quorum of shareholders present, and I declare the meeting open. Notice of the meeting was circulated to all shareholders, and I will therefore take it as read. We will discuss the resolutions later in the meeting. Please note, only shareholders, proxy holders, or shareholder company representatives may vote. For those of you joining us online, you will be able to vote and ask questions during the meeting. Please refer to the Virtual Annual General Meeting Online Guide, which is available on the NZX website and on our Investor Centre website for specific instructions. And if during the course of the meeting you need any further assistance, please call the MUFG helpline 0800 number highlighted on this slide.
The order of events for today's meeting will be as follows: I will comment briefly on the company's performance for the 2024 financial year and on the broader environment in which we are operating. I will also discuss the trading conditions we are currently observing early in 2025 financial year. You will then have the great pleasure of hearing from Greg Foran, our CEO, and following that, you will have an opportunity to ask questions related specifically to our twenty twenty-four financial performance. Then I'll move to the resolutions, the formal resolutions of the meeting, which relate to the re-election of two of our directors who retire by rotation today, and voting on those resolutions will be conducted by way of poll.
Now, for those of you here with us in Christchurch, you will be able to cast your vote by filling out the voting card received at registration, which will be collected at the end of the meeting. You may also use your smartphone to vote, and to do this, you will need to have registered with a PIN prior to entering the meeting. If you are a shareholder and did not register on arrival and wish to vote, please make your way to the registration desk and staff from MUFG will assist you. And for those attending the meeting online, you will be able to cast your vote using the electronic voting card that you received when you validated your registration.
And if you have any issues at all, please refer to the Virtual Annual General Meeting Online Guide that has been sent to shareholders and can also be found on the main page of our Investor Centre website. And following this and the voting, I will open the floor to any general questions that you may have. And immediately after the conclusion of the meeting, we invite shareholders who are attending in person to join with us, the board, and members of our executive team for refreshments in the foyer. So across the twenty twenty-four financial year, our amazing team of Air New Zealanders continued to demonstrate their ability to adapt and innovate, delivering new tools and digital enhancements, greater self-service capability, and refreshed onboard offerings for our customers, all against the backdrop of what could only be described as an incredibly dynamic and challenging operating environment.
The board and I are proud of what has been achieved and of the agility, resilience, and ongoing commitment to safety and excellence that the entire Air New Zealand whanau has shown over this time. We know this is going to hold us in good stead as the short-term headwinds we are facing start to abate. So the financial result we announced a little under a month ago, with earnings before tax of NZD 222 million and net profit after tax of NZD 146 million. It was, as expected, considerably lower than the 2023 result, when pent-up demand and constrained capacity led to one of the strongest financial results in our history. But there is so much more to the 2024 financial year than just the financial result, and reflecting on the year, there is much to be proud of.
We carried 16.5 million passengers on our network and rolled out a series of customer innovations, new products, and digital solutions, all with a view to improving our customer proposition and the way our people deliver it, and Greg will touch on this in a little more detail shortly. We were again awarded New Zealand's Most Attractive Employer, highlighting our ongoing commitment to creating a diverse and inclusive workplace for our people, and we also delivered improved on-time performance, up almost three percentage points, even though we operated 17% more capacity this year, and we reinstated ordinary dividend payments to shareholders. These are all impressive achievements when you consider the raft of obstacles the airline has faced over the course of the year.
Now, Greg will speak to these a little later, but I wanted to highlight perhaps the most impactful of these of those obstacles here, and the one that has had a significant impact on the airline's financial performance. Additional maintenance requirements globally for the engines that power our A321neo and Dreamliner fleet have resulted in up to six of our A321neo aircraft and up to three of our Dreamliner aircraft out of service at any one time. That's close to NZD 1 billion's worth of our most efficient aircraft sitting on the ground, unable to be flown. We estimate earnings for the year would have been around NZD 100 million higher, net of compensation, had we been able to operate our aircraft and schedule as intended. Despite this, we remain focused on the big picture.
In times like this, it would be easy to pull back, to stop investing, and focus purely on short-term profitability. But we know this approach will not set the airline up for success in the mid to long term. Our balance sheet is robust and has the capacity to weather the storm without compromising on our core strategy. We remain committed to investing sensibly in the areas that matter to our customers and our people, and focusing on opportunities to improve returns for our shareholders. One important thing I did want to mention before we go any further: as many of you will be aware, in July this year, Air New Zealand removed its 2030 science-based carbon reduction target and withdrew from the Science Based Targets initiative. This was a very difficult decision and not one that we took lightly.
It does, however, reflect the reality that many of the levers needed to meet this target are not progressing at the pace required and are outside our control. We are currently developing a potential replacement that more appropriately reflects the challenges we face, and we will provide an update in due course. I want to assure you, though, that our work on decarbonization remains a critical priority. Turning now to our Capital Management Framework, we've taken a number of steps this year to align our current metrics with the targets that have been set out in our revised Capital Management Framework. In addition to reinstating an ordinary dividend in line with our target payout ratio range, we have purchased aircraft with cash, helping to grow our unencumbered fleet to approximately NZD 1.6 billion. We also chose to make early repayments of about NZD 70 million in secured aircraft debt.
We remain committed to maintaining an investment-grade credit rating, as it provides financial resilience and flexibility in terms of access to various funding markets and attractive pricing. And I'll close this section of the AGM out by briefly discussing the outlook statement. Along with some of the operational issues I've just outlined, there were also a number of trading conditions that significantly impacted our result for the second half of the 2024 financial year. In particular, the tougher economic backdrop in New Zealand, driving softness and demand, the cumulative impact of inflationary cost pressures, and the impacts of aircraft availability issues, and significant competition on our U.S. network. We expect those trading conditions to remain similar through the first half of the 2025 financial year. Given the ongoing uncertainty, the airline is not providing guidance at this time.
What I do want to reiterate, though, is that these challenges will pass. Our strong leadership, innovative mindset, and customer-first mentality will see us come through the current environment stronger than ever. I am enormously proud of how Air New Zealand has navigated the past year, and on behalf of the board, I would like to thank the entire Air New Zealand whanau, and I also thank my fellow directors and you, our shareholders, for your ongoing support. I would now like to invite Greg to address the meeting. Kia ora [Foreign language}, Greg.
Tēnā koutou, Therese. Tēnā koutou e ōku rangatira, ki ngā mana whenua, ki a tātou katoa. Ka nui te mihi. Kia ora {Foreigh language]. Good afternoon, everyone. Twenty twenty-four was a year that was as satisfying and as rewarding as it was challenging and frustrating, often all in the same week. But you know what makes me most proud is how our team's energy and drive to deliver for our customers shone through. We rolled out new features on our digital app, including baggage tracking capability and multiple other booking management enhancements, which place more self-service capability in our customers' hands and help us manage disrupts more effectively.... Our recently launched Ops Collab platform, which provides instant multi-way communication between cabin crew and ground staff, has been a game changer for improving our boarding and aircraft turn times.
We redesigned check-in areas at Auckland Domestic and International, minimizing queues and providing a better customer experience. We also rolled out a reinvigorated Seats to Suit product on our international short-haul network to give customers greater flexibility and to ensure that we continue to provide great value across all ticket price points. In other words, we haven't been sitting idle, waiting for the current operating and macro environment to improve. We've been focused and deliberate with our decisions and our investments, with a view to making sure that we're fighting fit once aircraft availability issues subside. Now, although there are considerable distractions in the current environment, we are facing our challenges head-on, and I'm not going to go into each point in detail, but there's a huge amount of work that we have undertaken to mitigate some of the headwinds.
As noted earlier, the additional maintenance requirements for the engines that power our A321neos and Dreamliners has been the single most operational challenge this year, but we took immediate action to minimize disruption, leasing three Boeing 777-300s and securing additional engine spares, and that's no easy task in a market where many other airlines globally are also searching. You also saw us make some really difficult decisions, like temporarily suspending our direct route to Chicago to deliver a schedule that was more reliable. Now, moving on to the economic slowdown in New Zealand, which has impacted demand on our domestic network, particularly in the corporate and government sectors. We responded quickly, making targeted schedule reductions, reviewing our revenue management settings, and focusing on improved ancillary revenue offerings.
Overall, market capacity for the North American network is actually up almost 50% on last year, but our strategy for international markets remains clear. Our premium cabins are important to us, and you'll see this reflected in our retrofit program later this year with the introduction of new products such as the Business Premier Luxe. As our 787s start arriving from Boeing in 2026, you'll also see our long-awaited Skynest product being released to the market. We'll also continue to build marketing programs that inspire travel to and from New Zealand on Air New Zealand. Now, the impact of inflation being felt across the business is significant, and it's meant that non-fuel operating costs have increased 20% to 25% across the past five years, which, in a tight revenue environment, is pretty difficult to navigate.
A key priority for us continues to be delivering excellent customer service in a range of competitive fares. This requires ongoing discipline around our cost, cost base, and you've seen us already make targeted adjustments, including a 2% reduction in headcount, as well as pursuing improvements in the controllable cost base. As Therese noted earlier, we remain focused on the big picture. For me, that means controlling what we can, relentlessly focusing on customers and our people, and investing, albeit very sensibly. You'll see on this slide that there are three key areas where we are directing our investment spend over the coming years. This includes our fleet, key infrastructure, such as engineering hangars and hybrid electric ground service equipment, as well as digital initiatives and enhancements. These investments are the right thing to position our airline for success over the medium and long term.
Now, despite the external dynamics at play this year, our Kia Mau strategy continues to provide a roadmap for our business. It allows us to look beyond these temporary headwinds and ensure we're continuously improving our customer proposition and delivering sustainably stronger financial performance over the medium to long term. We've made demonstrable progress against this roadmap and are excited about the momentum that is building in a number of areas, and I'll touch on just a few highlights from the last year. Looking at our three key profit drivers, our efforts to grow domestic, although currently somewhat challenged with the NEO issues, we've enhanced and added more self-service offerings by our app, invested in new and efficient hybrid electric equipment to support operational reliability. We're about to start trialing a Starlink-powered Wi-Fi solution on domestic aircraft.
All of these investments will put us at the top of our game when we see our NEO fleet scale back up and return properly to the domestic network. Progress against our Elevate International pillar has spanned across all areas of the customer experience, many of which I've already highlighted here today. Responding to significant demand, we now offer Bali services year-round. We've had our revenue alliance partnership with Singapore Airlines reauthorized for almost another five years. And as aircraft availability issues start to resolve, we're turning our minds now to network opportunities and potential new routes we may look to serve in the future. As we look to lift the value of loyalty to our members in our airline, it's been a really big year. After many months of hard work across the business, we've successfully launched our Airpoints program in the iFly platform just a few weeks ago.
Now, ifly lays the foundation for an improved member experience, making it easier to access and view Airpoints and all the benefits that come with it. We're streamlining the process to expand and onboard new ground earn partners. It's a key step on our journey to create a more rewarding experience for our loyal customers today and in the future. We expect to have more developments to share as the twenty twenty-five financial year progresses. I won't go into details across each of the key enablers, but this year has been significant in terms of the level of new and enhanced data and digital tooling that we've put in the hands of our people. Better data at their fingertips, providing real-time information and feedback, help our people get continuously better at delivering world-class service for our customers.
We believe in the strength of our Kia Mau strategy and our fantastic team, and I'm excited about the opportunities ahead as we move out of this current cycle. Tēnā koutou, tēnā koutou, tēnā koutou katoa.[Foreign language]
Kia ora, [Foreign language] Greg. Thank you. I now open the meeting to any questions that shareholders may have that specifically pertain to the company's twenty twenty-four performance. We'll have an opportunity for general questions that you may have and wish to be addressed later on in the meeting. So can I just check in now: Are there any questions on the twenty twenty-four performance of the company in the room? There don't appear to be any, but, can I please check, Kim, if there have been any questions on financial or other performance for twenty twenty-four that have come through online?
Yes, there is one.
Thank you.
Why are the board and management receiving full bonuses when shareholders are receiving a smaller dividend?
Okay, thank you for that question. So, the first part of the question, just to make it clear, that the board do not receive any bonuses under any conditions in any year. So, our fees are constant, as they are scheduled. So, the second part around the leadership part of Air New Zealand and the executive team, there are two parts to the remuneration arrangements on top of fixed remuneration. The first is what we call the STI or the short-term incentive payment. That's paid out based on achieving a number of indicators within a scorecard. And for 2024, that was paid out and achieved at a 50% level, so half of target. And that changes each year depending on the performance.
In terms of the long-term incentive or LTI plan that we have in place for certain members of the leadership, that is based on meeting a certain share price hurdle, and that was partially met for an allocation of shares. That was allocated in twenty twenty. So there was a partial vesting in twenty twenty-four at just over 50%. So I think those bonuses were very much in line with the performance of the company at that time, during twenty twenty-four. And I think it's important for shareholders to acknowledge that it is really important, especially through the cycle, that we retain excellent talent at Air New Zealand and reward people appropriately. Thank you. Kim, are there any other questions around the twenty twenty-four financial performance?
No, there are not.
Okay. Thank you very much. We will now come to the formal resolutions of the meeting, and the resolutions for consideration today may only be voted on by shareholders, proxy holders, and shareholder company representatives. The matters to be voted on today are the re-election of two of our existing directors, who retire by rotation, being Claudia Batten and Alison Gerry, and Air New Zealand's constitution requires that directors are appointed by the board and brought to the annual shareholders meeting to retire and to be re-elected at the next meeting. As already mentioned, voting on all the resolutions will be conducted today by poll. When you registered on arrival, you should have been given your shareholder voting card.
If you are a shareholder and did not register on arrival and wish to vote, please make your way to the registration desk outside the room, and staff from MUFG will assist you. If you are both a shareholder and a proxy holder or shareholder company representative or have more than one holding, you would have received a separate voting card for each holding. When you note, vote on the resolutions, please complete all voting cards given to you at registration. If you hold shares in joint names and all holders are here today, you will have received one voting card only for your holding. Shareholders voting using their smartphone can swipe left to follow and vote on the resolutions. Again, if you require any assistance, one of the MUFG staff can assist you. The company secretary holds a record of the valid proxies and postal votes received.
Before I put the resolutions to the meeting, you can see the results of the voting directions given to proxies and the postal votes at the bottom of the slide for transparency. We will now discuss and vote on each resolution in turn, and MUFG will tally the votes at the end of the meeting. I will now turn to the re-election of Claudia Batten as a director. Claudia has been an independent non-executive director of Air New Zealand since October 2021, and currently sits on the Audit and Risk Committee. She has a background in technology ventures in the United States and contributes strongly to the technology capability of the board. Further credentials of Claudia Batten are detailed in the notice of meeting. I now invite Claudia to give her comments in relation to her re-election. Kia ora, Claudia.
Tēnā koutou katoa. Ngā mihi nui kia koutou katoa i tēnei ahiahi. Nau mai, haere mai ki tēnei hui ā tōu. Kia ora. Ko Claudia Batten tōku ingoa [Foreign language]. Good afternoon, I'm Claudia Batten, and I've been on the Air New Zealand board since October 2021. I currently serve as chair of listed digital travel company Serko, and I'm on the board of Vista Group, who operate a global cinema ticketing software company. I've also recently joined the board of Michael Hill International. My background, after an early career in corporate law, is in entrepreneurship. I spent 20 years, the large majority of my professional career, in the United States, where I was the founding member of two digital advertising companies that were both subsequently acquired. I now live full-time here in New Zealand after returning in June 2021.
I have a deep passion for building innovative businesses that represent New Zealand on the world stage. International markets are critical to New Zealand's long-term prosperity, and Air New Zealand is quite literally the wind under the wings of Kiwis with big ambitions for themselves and our country. Whether people are traveling for work, play, sport, or to be with loved ones, Air New Zealand's mission is to power that connection within New Zealand and to the world. It is an honor and a privilege to sit on the Air New Zealand board. The care and commitment of the Air New Zealand team is unrelenting. This past year of complexity has brought out the absolute best in everyone. Challenge has been met with determination and tenacity as innovative solutions are sought in response to weather events, supply chain constraints, inflationary pressures, and everything in between and beyond.
As a member of the board and the Audit and Risk Committee, my focus is to support Air New Zealand in being an airline that you can trust. Trust is a big word, and not something we take lightly or for granted. Trust is earned through small actions and often forged through the hard moments. Iti Nui is one of my favorite concepts: from the little, comes the big, and the airline is doing a lot of little things, some visible, some invisible, and some yet to be delivered. From new aircraft and retrofits, new uniforms, technology advancements and innovation, our pilot cadetship program, and infrastructure investments, all so we can continue to be the carrier that you trust. Thank you for your support, and I humbly offer myself for re-election. Ngā mihi. [Foreign language]
Kia ora, [Foreign language] Claudia. Thank you. I move that Claudia Batten is re-elected as a director of the company, and I'll just check if there are any questions from anyone in the room in relation to that resolution. Thank you. Can I just check, Kim, if there are any questions online? No, there are not. Thank you. Okay, our next resolution is in relation to the re-election of Alison Gerry as a director. Alison has a very strong background in governance, capital management, and audit and risk, particularly in the financial services and infrastructure industries. Alison is the board of our Audit and Risk Committee, and is also on the Health, Safety, and Security Committee. Further credentials of Alison Gerry are detailed in the notice of meeting. I will now invite Alison to give you her comments in relation to her re-election. Kia ora [Foreign language], Alison.
Kia ora tātou [Foreign language]. I'm Alison Gerry. I joined the Air New Zealand board in 2021, and as Therese said, I'm currently the chair of the Audit and Risk Committee, and a member of the Health and Safety Committee. I'm putting myself forward for re-election on the basis that I can make a positive contribution to the company and to the board, and have the relevant skills, appropriate experience, and importantly, the capacity to help Air New Zealand achieve its many goals and objectives. In terms of my experience, I've worked in finance, treasury, and risk management, primarily in Asia and in Australia, for about 20 years, with my last executive role as the group treasurer at Lion Nathan. For the last 17 years, I've worked in governance as a director of a number of large New Zealand companies, mostly in the infrastructure and financial services space.
Currently, I'm the chair of Infratil and Sharesies, and also director of ANZ Bank, where I chair the Audit Committee. My experience has been particularly helpful in my role as the chair of Air New Zealand's Audit and Risk Committee. Over the last year, as well as being focused on our financial reporting, risk, and assurance activities, we have also been overseeing the implementation of Air New Zealand's revised capital management framework, which we announced in August 2023, and in practice, that means looking at how much cash we hold on the balance sheet, how much debt we think we should have, and what is the right balance between paying dividends to shareholders versus reinvesting in the company and in our core operations.
We also oversaw the preparation of the airline's first mandatory climate statement, which was released to the market this last August, and we spent a lot of time discussing the airline's climate-related risks and opportunities. For me, the most important thing when deciding to seek re-election is whether the company's purpose resonates with me, and whether the company is committed to making a positive difference to New Zealand and to New Zealanders. Given that I live near Arrowtown, I fly regularly to visit my parents in Whangārei, where I grew up. I've got two children who live in Sydney and a husband who commutes regularly to Kerikeri for work. It is very easy for me to be passionate about Air New Zealand's purpose of connecting New Zealanders with each other and New Zealand with the world.
But as you've heard from Greg and Therese, we are operating through a challenging environment at the moment. However, I'm optimistic about the future for our company, for our customers, and for our shareholders. I humbly seek your support for my re-election to the Air New Zealand Board. I'm up for the challenges ahead, and I'm committed to work hard on your behalf. Nga mihi nui.[Foreign language]
Kia ora [Foreign language], Alison. Thank you. I move that Alison Gerry is re-elected as a director of the company. Are there any questions from shareholders in relation to this resolution? Thank you. Can I just check online if there are any questions? Thank you, Kim. If you could now please submit your vote by ticking either for, against, or abstain on your voting form under Resolution two, to re-elect Alison Gerry. Thank you.
Do you want an Air New Zealand pen?
You, you want an Air New Zealand pen? Greg, have you got one of those in your pocket? He normally has one. I see people are still voting. I think we're looking good. Have all who wish to vote, done so? Excellent. Thank you so much. MUFG staff will be collecting your voting cards as you exit the room, and once all the cards are collected, they will count the votes, and shareholders participating via the virtual meeting website should now submit their votes, and voting will remain open until the close of the meeting. The results will be announced to the NZX and ASX after the conclusion of the meeting. I now welcome you to sit back, relax, and watch the following video before we proceed to general business.
I'm young, wild and alive. Show you what I'm made of, and give my dreams life. I put it all on the line, just like I'm young, wild and alive. I'm young, wild and alive. I'm young, wild and alive.
Right. I'll call the meeting back to order, and as a reminder, the results of the poll will be made available on both the NZX and the ASX after the meeting. It's now an opportunity to open up today's meeting to any other questions you may have. Can I please ask that we use this time to focus on questions relating to matters that are relevant to the airline? If you have any customer-related matters you would like to address, please direct your comments to our investor relations team, and we have a number of our executive here today who'd be happy to help. While we wait for members of our audience and our online shareholders to ask a question, I will address some of the questions we have received prior to the meeting.
The first question is: Delhi to Auckland is one of the largest unserved sectors in the world, and India is the most populous nation and fastest-growing major economy on the planet. Why has Air New Zealand not made plans to launch direct nonstop flights to India? Right. I would agree that India is a fabulous market. It's a growing market, and from our perspective at the moment, we're very constrained around fleet, as we have described. However, when we look to the medium and long term, we are contemplating how we might see potential routes or expansion in our network, and so that's always under review, and we never say never to a particular destination.
However, what I would encourage you to do, is to tell Greg Foran on your way out, what your two preferred destinations are in the world, and we will tally the votes at the end of the meeting also. So watch this space. Thank you. Our second question is: "I am a loyal shareholder of Air New Zealand and am surprised, given the higher prices of tickets compared to some of your peers, that customers are offered only a light drink and snack when flying to Australia. I think it's reasonable to expect more, given airfares are so high right now." Again, thank you for your question, and I think, as shareholders, that's a good question to ask.
We have, and we sort of outlined earlier, there has been an enormous amount of cost pressure in all areas of the company, and so ticket prices are higher right now. They're about 30% higher than they were in 2019 on average across the board. What we have done is redesigned our Seats to Suit product across the Tasman, which allows people to select, you know, whether they'd like a full meal offering or a snack, et cetera, with their ticket. That's to really reflect that customers can have choice and control over what they would like to pay for. You know, we've done that, acknowledging that there are some very difficult times out there at the moment, economically and financially, for households and businesses. Thank you.
And the next question: "I am concerned with the low share price. It's almost as low as the offer price was during the capital raise, which demonstrates I am essentially losing money holding shares. What is your plan to improve shareholder confidence and the share price?" So, I mean, firstly, I, myself, am a significant shareholder of Air New Zealand, and I think we can all agree that the share price is not where we would like it to be. And I think, really, for us, it's about looking through the FY twenty-five, through FY twenty-four, that we've just experienced, and actually to look through, to developments under our Kia Mau strategy, all of the things that, Greg outlined earlier as to how we are building the company up, building those foundations, and getting ready for the cycle to change.
I just encourage shareholders to have confidence in those plans and in the actions that we are taking, and that we'll enjoy once we have more of our fleet back into our network, we have new fleet coming into our network, and some of those things occur. And in time, as that happens, we would very much hope to see returns enhanced as well as perhaps the share price. Right, thank you. The next question. Yes, hello? Sorry?
Could I apologize for my phone going off?
Oh, absol-absolutely.
Sorry.
No problem at all. This is the day of technology and devices. It's absolutely fine. Thank you for your kind words. Okay, on to the next question: "Can you please tell me how you are thinking about dealing with the following? Firstly, the uncertainty of fuel prices, the quality of the engines, and the downturn in government spending on air travel." We've covered a couple of these things, but I'll just a few more details. I mean, firstly, in terms of fuel prices, we have had for many years a fuel hedging policy, which has served us well. It allows us mostly to be quarantined against the downside, but able to participate in the upside, and so that holds us in good stead.
It has for many years, and we'll continue to uphold that hedging policy. In terms of the engines, it's important to be really clear that the engines are not a safety issue. It's just simply about a part within an engine that is wearing out more quickly than you might have otherwise expected, and so that part needs to be replaced more frequently, and therefore, the engine actually needs to go out of service to allow for that part to be obtained, I guess, would be the right word to use. So there's no safety issues. Obviously, we don't enjoy having engine issues and aircraft on the ground.
There's in fact two behind me at Christchurch Airport that are on the ground at the moment as we speak, and there are a number in other parts of New Zealand and Alice Springs. But actually, engines being out of service is quite a common thing across all types of engine types and we will see this through. Various changes are being made, and we're very confident going forward. So thank you. "And after reading the annual report and focusing on the lack of progress on emissions mitigations, how much would need to be added to each seat price and each kilogram of freight price to offset total emissions? For the sake of future generations, please add a surcharge now and encourage your competitors to do the same." Well, I mean, thank you for...
I mean, obviously, we're all very ambitious around decarbonization, and it's a really clear thing for us in terms of our strategy. I think the one thing to say is that just putting some sort of surcharge on for carbon offsets is. We don't view that necessarily as the answer. It hasn't worked in a number of other places where they have done so. The key thing for us to focus on is getting down our gross emissions, and so that's what we're focusing on, and we're still committed to our 2050 target. So we consider all of that within our overall financial planning, costs, and ticket prices. Thank you. "How will the board deliver and address significant improvements in shareholder value?
The share price has remained stagnant for an extended period and continues to perform poorly post-COVID compared to other airlines, for example, Qantas." So I think I addressed earlier around a question around the share price. All the steps that we are taking in our strategy, in our Kia Mau strategy, to build back the airline better, and there are many things. And I think Alison said it very well with, or Claudia, with that some things are visible to you now, some of those innovations that Greg spoke of, some of those things are still to come, but there's a lot of work underway. We feel very excited about what's coming. It is really difficult to compare share prices from company to company and from airline to airline around the world. We both, we all have different profiles.
We're all in different places in terms of our recovery and in terms of the economics around the markets that we serve. So, really difficult to draw that comparison. All I can say is that we are very excited about the strategic plan we have and how that will get us through the cycle and see some really fabulous things come through in future years. Okay, so those are the questions we have online at this stage. I'll now ask for questions from anyone in the room. Kia ora.[Foreign language]
Hello, everyone. My dream for Air New Zealand would be to go into getting a regional jet for flying thinner Tasman routes. The Embraer 190 is a really good platform aircraft, and we could join up with Alliance Airlines. They've got a large fleet and looking for more operators to operate them. They would be quite good for Air New Zealand to fly year-round to Auckland, Cairns, Auckland, Sunshine Coast, Auckland, Hobart, especially for the low seasons. And we have a restricted international Airbus fleet at the moment, but if we could get a fleet of a hundred, hundred-seater Embraer one nineties, it would fit in between sixty-eight seater ATRs and the hundred and seventy seat A320s. So there's a big gap between the currently between the ATR and the A320.
So I would like that my dream for Air New Zealand would be to go in and look into this. And we'd probably open up more routes across the Tasman, like.
Yes.
Auckland, Canberra-
Yes
... and maybe Newcastle.
So you've had your two votes already now, haven't you?
Yeah.
Yes.
So that's one, anyway, that's one of my dreams for Air New Zealand, and I think that's a gap where we could grow our business and help to protect against the increasing competition on the Tasman that we face.
Okay.
Thank you, guys.
Thank you. Thank you for your suggestion, and we are always reviewing the network and doing medium and long-term planning, and so it's an interesting thought. Greg, you might want to give a more detailed response.
I'm going to hand over to either Richard or David, and they can add something in.
Yes.
Yeah, one of the challenges with a business like Air New Zealand is the degree of complexity relative to the scale of the business. So every time you add a new fleet, you've got a whole bunch of costs that come with it, and you need to be sure that you're going to get a return on that particular investment. So, so, you know, what happens when you add a new plane in, as you obviously know, because you're quite familiar with the aircraft, is I've now got a whole set of tools that we have to get, and you have to sort out what you're going to do with hangars, and you've got to sort out what you're going to do with the collective employment agreements. And so you've got to weigh up all that cost and complexity with, is it going to actually give you a return?
For an airline that, you know, does sort of NZD 5 billion in passenger revenue, NZD 1 billion or so in cargo, we think the mix we've got at the moment of having the Dreamliner, and that's what we'll progressively move towards. We've got triple sevens at the moment, but over time, they will retire, but not anytime soon. We end up with a set of Dreamliners, either nines or tens. We really like the Airbus 320 and 321. We think that is incredibly efficient, and we like the idea of having Boeing for long haul and Airbus for the short haul. And then, you know, you're suggesting add another fleet in between that and the ATR and De Havilland, and I'd say that's not something that we see a market size for at the moment.
But good question to us, and I appreciate, you know, you sharing your thoughts on it. Richard or David, you got anything you want to add?
I don't have much to add to that.
No, I think that covered it well.
It's a good question.
Yeah.
Okay, kia ora for that question. Are there any other questions in the room? Okay, I'll go back online because I think there are more questions coming through online, and of course, I'll give you another opportunity later if there anything else springs to mind. Okay, so, Kim, would you like to read out any questions you have online?
Yes. First question: Are the engines that you are using covered by warranty, and if not, why not?
Richard, would you like to take this question?
Yeah. So the engines are covered by a warranty. We do have a warranty. The reality of it is, though, that the cost of the interruption we're suffering is incapable of being covered by the proceeds we'd get under any warranty. And the, you know, Pratt & Whitney, for instance, had to pay every airline that's suffering from this problem, the full cost of covering it. They'd probably go bankrupt themselves, which wouldn't do them any good, nor us any good. So yes, we do get compensation, and we've worked through that. They are covered by warranty, but as I say, it's sort of cents on the dollar, relative to what it's costing us to work our way through.
Thank you, Richard. Appreciate that. Kim?
Next question: I live in a provincial town, and Air New Zealand has become quite unreliable on its scheduled flights. What plans does the airline have to reduce the impacts on its customers in the coming twelve months?
I'll hand that to our CEO.
Sure, and I apologize for the inconvenience when we do have disruptions through cancellations. We continue to do everything we can possibly, as we've sort of shared the ecosystem around the world, and airlines hasn't recovered. For those who follow it, you'll know that Boeing have their challenges. Even Airbus is still struggling to get back on their feet. Getting spare parts is quite challenging. We're chasing more engineers so that we can get on top of this. We do understand the issue, and we're dealing with it to ensure that we keep cancellations and disruptions down to a minimum.
Yeah. Thank you. Kim?
Next question: In twenty twenty, Air New Zealand had a fleet of twenty-one, twenty-nine wide-body aircraft. With the arrival of eight new Dreamliners and retirement of the triple seven fleet, it's only going to mean a fleet of twenty-two wide-body aircraft in twenty thirty. How are Air New Zealand going to be able to grow the business with fewer aircraft, and at what point are we likely to see additional aircraft being ordered?
Thank you, and yep, that's fine. You go for it.
Look, that's a great question. We've actually just gone through our five- and ten-year plan. The number of wide-body aircraft we're going to end up is going to be circa 27, 28. As I just previously mentioned, we'll hold the triple sevens for a bit longer. We think that's a smart move. They're good aircraft, and, you know, you can't rely at this point that Boeing are going to deliver everything that they said they would. So we've got 8 Boeings on order. We've got options, I think, for another 6, if we want them. We think the right number of wide-bodies for the fleet is sort of about 27, 28. Leave it at that.
Yeah. No, I think that's great, and that will get us back almost to that number that you spoke of. Thank you, and Kim, next question. Thank you.
Will Air New Zealand ever return to flying long haul from Christchurch to North America, Asia, Pacific Islands, Perth, Adelaide, and Cairns?
I think it goes back to the answer that I gave earlier, that we're always looking at options around different routes, and we're always looking at the network and seeing where the demand falls. We don't have any current plans, but, as I said before, you know, we're always reviewing, so, we'll leave that there. Thank you. Kim.
I always fly out, fly Air New Zealand out of Gisborne. I love Air New Zealand planes and its products. Well done, team. I also congratulate you for continuing to greet in te reo Māori. The seats on the Q300, however, are old and hard. Is there a refurbishment program for the seats planned?
Something we're looking at. I actually just got back from Canada. That's where that plane actually was built. They aren't building them anymore, but they may, and I stress, may, go back into production on them. In terms of how long we keep those Q300s, we like them as a plane. They're very sturdy. They're good planes. They can probably go, honestly, for another fifteen or twenty years, and we're looking at what we might do in terms of retrofitting them in time. We don't have an answer to that one yet, but we do like the Q300 fifty-seater, and we think it does a great job for regional New Zealand.
Thank you.
Is Air New Zealand capable of competing with highly competitive and productive global-leading airlines?
I'll just kick off with this by saying that, while we are a smaller airline than many internationally, we have so many things going for us, and that's why we're very excited about the future. You know, people love getting on our planes, the greetings, the service, the food and beverage offerings. There are so many things around our brand and our proposition that holds us apart from our international competitors. Of course, we're always reviewing the competitive landscape, other airlines, what the competition looks like for us at any given time, and we think about that in our strategic plans. But as I said before, it's also really hard to compare an airline like for like, but we're obviously always thinking about it.
You know, we've mentioned there's a lot of capacity coming out of North America, et cetera, so it's just constantly under review. But I would say that the proposition that Air New Zealand provides to the market is special, unique, and will continue to hold its value in a highly competitive marketplace. Thank you. So then next question, Kim, did you want to read that?
Yes. Is there any update on the trial electric aircraft to be based out of Wellington?
Who would like to take that?
Well-
You go for it.
First of all, we're gonna be there in a couple of days.
Yes, we will be.
You're gonna see it.
Yes.
That plane is going to be built in Vermont, up the top of the U.S., near the Canadian border. And, Kiri, do you wanna talk about what you got coming down the line with that particular electric aircraft?
Yes, I'm happy to say everything... Sorry. Thank you. Kia ora [Foreign language], happy to say that everything's on track for our Beta electric aircraft. It'll fly commercially from 2026 in Wellington, going across the Cook Strait to Blenheim, but we're hoping to bring it down earlier or a model of it down earlier next year, around March, and we'll sort of do a technical proving, a lot of flying down here, which will be pretty exciting. I think it means we'll be the first commercial airline in the world to fly an electric aircraft, so we're very proud. Thank you.
... Kia ora [Foreign language]. Thanks, Kiri, and over to you, Kim.
Why did Air New Zealand decide to invest in the cadetship program this year? Is this a trial, or has a decision been made that such a program is here to stay?
I'm going to actually pass this question in a moment to our chief pilot, Captain David Morgan. But what I would just say is that it's an incredibly exciting initiative that has come through this year, and it addresses a number of actual things, such as shortage of pilots, as well as bringing young people through, which is really exciting. And I think tomorrow, there'll be... I'm just looking at Rachel Morton, our media comms person. There'll be a lot of us, you'll see it on TV tomorrow, you'll see it in the news tomorrow, and it's really exciting, and I think you'll be quite inspired by it. But, David, did you want to answer the question too?
Thank you, Dame Therese. Kia ora [Foreign language]. Good afternoon. The Mangōpare, Mangōpare, cadetship program is ostensibly about filling the gap of the shortage of pilots that we have in New Zealand. We have a high demand for pilots over the next at least five years, partly driven by retirements from the airline, but also our longer-term growth strategy. The training system in New Zealand isn't capable of actually providing sufficient pilots for Air New Zealand's needs. And so for that reason, combined with the giving people the opportunity to become pilots who would otherwise not have had that opportunity, hence, we launched the Mangōpare. We [Foreign language]'ve had a tremendous amount of success in the cadetship program.
At the first flush, over two thousand people actually applied, of which eighteen hundred went on to the next phase. That was reduced to nine hundred, and now we have enough candidates to fill certainly the first year of the cadetship program, and the first members or cohort of that program will be actually heading off overseas for their first lot of training in Arizona tomorrow night.
Kia ora [foreign language]. Thank you, Captain David. Okay, Kim, next question. Thank you.
Thanks. My shares are now worth under 30% of what I paid for them in 2021. Are you confident in the next two years shareholders will feel confident enough to keep hold of the shares?
Kia ora. Thank you. It's a great question. A few things to add. Firstly, I won't be offering any financial advice to anyone today. It is your decision and your decision alone as to whether you hold shares in Air New Zealand. The second thing I would say is, as I said before, I am a substantial shareholder of Air New Zealand myself, and I am, as the Chair of the Board, feeling very excited about the future of this company. I've said many times today, and as has Greg, our CEO, that we are very excited about some of the innovation that we're bringing into the company, the way we're structuring for efficiency and productivity, and those things are starting to bear fruit and will bear fruit into the future.
However, I can't put a time horizon or make any specific promises about when and how with the share price. All I can say is that I feel we're doing everything possible to build a highly efficient, productive company that we can all be very, very proud of, and while I do hope you all hold your shares, that's obviously a personal decision for you. Thank you. Okay, Kim, thank you.
Can you please outline the previous experience of running an airline that certain board members possess?
Okay, so I'm just gonna give you a quick overview of how I see the experience, then I might ask a couple of my board members to speak. The first thing to note is that when you have sat on the board of an airline, as I have, I'm the longest-serving director on the board of Air New Zealand, you do learn a lot about airlines. So while that's not my background, I certainly know quite a lot more now than I did and compared to the average person out there who has not been exposed to an airline, and I think that's the same for each director as they build up their experience with the company.
We did make a decision early when I took over as chair of the board to bring on some specific airline experience, and in relation to that, we appointed Larry De Shon as a director of the company. Larry is based in the U.S. We wanted a global perspective and someone who had held senior roles in an airline, and in this case, United Airlines, which happens to be a very... We have a close relationship with United Airlines. Secondly, Larry was also the global CEO of a rental car company, which means that he has a lot of experience, additionally, in logistics and transport, which is peripheral, but also very important to the nature of this business.
So, Larry, I'm just checking if you can hear me online and just whether or not you would like to give any more outline of your experience.
Sure. Can you hear me?
Yes. Thank you, Larry. Proceed.
Good. Good afternoon, everyone. Yeah, I, I joined United Airlines in nineteen seventy-eight and started in the very front line of the airline, so cleaning planes, loading planes, working customer service, working in the ticket counter, and so forth. And over a 28-year career, worked my way up into the organization to run strategy, to run onboard service, food and beverage, marketing, and eventually global airport operations. So I have a significant amount of experience in the airline business, and as Dame Therese said, I followed that up with a career at Avis Budget Group, the rental car conglomerate.
I do have a lot of experience in complex kind of operations and logistics, and I feel like I can kind of bring that forty-two-year career to Air New Zealand and hopefully help them, you know, think through some of the challenges that they have and how we can kind of get through that.
... Kia ora [Foreign language]. Thank you, Larry. And the last person I'd just like to mention is Dean Bracewell, who is on the board. Now, Dean had a long career with Freightways, which is a logistics company and transport company. And Dean, I think that's really important, as Dean heads up our health and safety committee of the board. He chairs that, and I think that experience as well, because he had aircraft as part of his operations at Freightways. So, Dean, would you like to comment briefly on that?
Yeah, thanks very much, Therese. Look, my experience, as Therese has said, is 35 years within Freightways. We moved freight from one end of the country to the other. We connect the North and South Islands, or we bridge the North and South Islands, if you like, with aircraft that operate between Auckland, Christchurch, and Palmerston North. We started off with turboprop aircraft. We ran them for a number of years. You might have heard them coming into this airport, actually. We moved on to jets. Just prior to my leaving the company, we had a large number of engineers based in Palmerston North at Fieldair Holdings, a well-established significant employer in that area anyway, and a bunch of pilots who worked for us.
I experienced quite a bit to do with operating an airline on a lot smaller scale, obviously, than Air New Zealand and certainly than what Larry was involved in. But nonetheless, the trials and tribulations, the challenges, and the joy that can come with operating an airline as well, certainly came my way. And yeah, so that's me. I've got a bit of a airline experience as well. Larry's the main man.
Kia ora [Foreign language], but I think we've significantly increased the airline experience around the board table, which we intend to hold on to. Okay, thank you. Kim, next question.
There haven't been any recent announcements of executives or board members investing in Air New Zealand. Why?
Thank you for that question. I think, many board members and executives, either held shares or purchased shares, around the time of the capital raise, a few years ago, and I think there was quite a lot of activity around that time, and I think that's why we've seen a more settled patch. But, there's certainly a number of executives and almost the whole board who own shares in Air New Zealand, and I think that, that will continue, and, and over time, you may see changes in those holdings also. As I say, a lot of confidence in the company. Thank you. Next question, Kim.
Will Air New Zealand choose to code-share for tier two cities out of India? That's where the greater demand from India is. My question is for Greg Foran.
Yeah, so as we think about India, and as you mentioned, Therese, the opportunity that we see there is reasonably significant. To put a bit of color around how significant, about 25% of the people that fly to Singapore will generally then divert over to get into India, and they spread themselves right through. The biggest cities we know are Delhi, followed by Mumbai, followed by Bangalore. And as we think about India, almost certainly we'll work on a code-share, and that code-share partner fitting in with what you might do as a Star Alliance partner is likely to be Air India. So we haven't announced anything, but that's our thinking at the moment, and that planning is on our roadmap, and in due course, we'll talk some more about it. We're excited about the opportunity.
I'm open to where the next location might be.
As I say, cast your vote with Greg Foran on the way out today, and he'll take it into account. Okay, next question. Thanks, Kim.
How do you see the international political upset at the moment impacting operations? And is Air New Zealand exposed to any risk in these areas? If so, what sort of mitigation actions are you undertaking or planning at the moment?
Thank you, and I think the key thing to know is that geopolitical and economic and other issues are out there, are very firmly on our risk register at Air New Zealand, and we contemplate them frequently. There's a lot going on in the world, and of course, we're very mindful of those things as we are planning our network and as we are responding to how our competition is faring with such things also, so a number of significant things. I won't dive into a specific geopolitical issue at the moment, except to say that we're very mindful. Don't really wanna go into a number, but there are many out there at the moment. Greg, is there anything you wanted to add?
Yeah, I will jump in just to give a bit of color to the sort of things. You know, I thought COVID was enough, to be honest with you, for the first sort of year and a half or two years, capital raise, Justin. But, of course, no sooner do we get out of that, we've got Ukraine and Russia. And what do I learn about Ukraine and Russia? Well, Boeing had about two thousand engineers in that part of the world that used to do all the design engineers on how you retrofit a plane. So when you've got fourteen Dreamliners that need a retrofit, you need to be able to go to Boeing and say: We want to put this new seat on. So they have to do what they call mods and redesign, weights, and how it all fits together.
All those people went off to fight the war. You know, we're dealing with this issue. Guess what happens in Israel? Lots of very clever air parts, aircraft parts, are manufactured in Israel. So it's like two locations in the world that actually support the world ecosystem of airlines happen to be sort of Ukraine, Russia, and Israel, and both of those are going through geopolitical challenges. Now, every airline gets impacted on that, and you just have to deal with it, but it's one of the reasons why it's hard to get spare parts. It's not the only reason, but it's one of the reasons. You got to work at it, and people do. They work out how to work around it, but it has been challenging.
... Okay, thank you. On to the next question.
Has the board considered setting up a director cadetship to help grow local board-level leadership, capability, and experience? If not, would the board consider doing this in the future?
Thank you. We have considered it. We haven't decided to proceed at this stage. We've been through a very volatile time that's required real governance heft, and I think, it's been very complex. I wouldn't preclude it in the future, but we haven't made any firm decisions about when or how we might implement that. But I'll note, the Institute of Directors runs an amazing Future Directors program, and many of us here sit on other boards and have future directors. So it's certainly something we'll consider over time. Okay, Kim, over to you.
Next question: Do you have an independent annual survey for the health, safety, and well-being of your workforce? If so, do you share metrics and data back to the workforce?
Thank you. I'm just wondering who might like to take that. Alex, would you like to take that question? Yes, thank you.
Kia ora, everyone. Yes, on the health and safety side, we have a very robust safety management system that includes all different measures of health, safety, wellbeing, safety operating procedures that we have, regular daily and weekly and monthly coordination of how we're performing. We also have about three hundred health and safety representatives across the airline, and we have a system called KoruSafe, where we literally receive almost nineteen thousand reports a year, because we always want to be anticipating safety risks to our people and to the operation. So, very proud of the work that we do. We can never let our eye off the ball when it comes to safety. So, you know, health, wellbeing, accidents, injuries, preventative measures or risks that we see in the operation.
That's something that we're committed to and is core and foundational to all of us here at the airline.
Kia ora [Foreign language]. Thank you, Alex, and Kim, back to you.
Next question: Operationally, how does the company support staff that are members of the Pride community or working through a transition into the community? And where do you think you could do more?
Okay, so I'm gonna ask, Kiri to answer this question in a moment, but just to say that I'm really impressed and inspired by the network, support network structure that we have at Air New Zealand across, many different, parts of our Air New Zealand whanau, and the Pride Network, is a fabulous part of that. Kiri, would you like to give a few more details? Thanks.
Kia ora. Thank you for the question. It's lovely timing. Today, I got an invitation to the Pride celebrations in Auckland next week, where Air New Zealand is a finalist in some national awards, and I think that's a reflection of the fact that we-
Fantastic
... amazing pride in supporting all diversity, including sexuality, in our airline. So we've got a very active team group that runs Pride activities for our airline, and it's led from Therese, the board, and Greg Foran, but it's something that we are very passionate about supporting.
Kia ora [Foreign language]. Thank you, Kiri. And, there are no further questions online. I just want to go back to the room. I said I'd give you a chance to just contemplate if there was anything else on your minds. Feel free now. Yes, sir. Just a microphone on its way to you.
Paul Sheehan, out of Wellington. About a week ago, we saw an ATR land at Wellington Airport with steam and smoke coming out of the. And it was landed, and they handled it very well. Safety people came, and everyone was offloaded. Can we get a little bit of detail as to what the problem was and when it was satisfactorily resolved in the engineering workshop?
Yes, so,
I did hear various-
Thank you
- about the word.
Thank you. And I think one of the reasons when there's an incident, which we all find a little unsettling, is that we actually have to let the investigation kind of go through its course, and so sometimes that can take a wee while, which may be what you're speaking of. But I think there'll be a little bit of detail that our Chief Pilot, David Morgan, can share with you.
Thanks, Therese. The aircraft had an internal failure of one of its engines during the flight from Christchurch to Wellington, which obviously manifested itself in the final stages of the approach with quite a bit of smoke emitting from the aircraft. Yeah, we're very happy with the way that particular event was handled by the crew and by the team on the ground in Wellington and the support services that helped both the passengers and the crew deal with it once they subsequently came to a stop on the runway. The issue is under active investigation by the Transport Accident Investigation Commission. Being an investigated party, we typically will not make a comment on that matter.
Otherwise to say that or suffice to say that the engine in question is the focus of the investigation. It had just recently been delivered to us by Pratt & Whitney and is now back in Canada being stripped.
We only fly if we believe it is safe to fly. Thank you. Are there any other questions? Yes.
Good afternoon.
Kia ora. [Foreign language]
I've got two questions. One is, are you planning to replace the 321 engines due to its maintenance issue? And my other question is: Is there a chance to have a look at your strategic plan somewhere?
... Oh, I'll just go in reverse order with your questions, then I'll pass the first question over to Greg. But in terms of the second question, there's an annual report available online. There's probably a couple of copies here. And there's a lovely section, which I'm sure Alison will show us, hold up in the annual report, which is a summary of our Kia Mau, which is our get-ready strategy for Air New Zealand. Yep, thank you, Laurissa and Alison, my fabulous assistants here. Thank you. Page 70, and there is a lot of detail underneath the table as well, outlining so many of the initiatives that are underway and what we're trying to achieve in the short and the longer term.
So I think you'll enjoy that read, and it'll explain why we're feeling so upbeat at the moment. And Greg, would you like to answer the engine question?
Yep. Richard, help me out if I miss anything here.
Mm-hmm.
We've got two engines, actually, that are giving us a bit of heartache at the moment. One is a Pratt & Whitney, and that's a 1100. That is the model number. And if you went and bought a brand-new Pratt & Whitney 1100 today, it'd go pretty well for you. It's just that the first, I don't know, few thousand that came off the production line, they've got a bit of an issue with what they call the Geared Turbofan. And what happens is that, they need to go back on a much more regular basis than we would expect, what we call cycles, which are how many takeoffs and landings you get. You know, you might think you're going to get 5,000 takeoffs and landings, and they go, "No, you're not gonna get that many on this one.
It has to go to the shop and get a repair. You might only get six hundred or seven hundred. We unfortunately, in the batch of aircraft that we bought several years ago, happened to have ones that had this issue. Right today, and I was talking to the Chief Executive of Pratt & Whitney the other day, there are a thousand engines lined up sort of outside their garage, if you like, waiting to go in and get repaired. 'Cause they didn't expect that this would happen, so they don't have enough garages, they don't have enough mechanics to fix it and all the other things. We like the engine. It's just, it's not giving us the amount of cycles. As it gets repaired, they do actually start to perform. So we're happy with that engine. We'll stick with it.
We actually have a similar issue with the Trent engine on the Dreamliner, and that's not giving us the same amount of cycles that we want either, and you know, Rolls-Royce have got challenges 'cause they need parts out of places like Israel and all the other stuff, and so you know, we've got three Dreamliners at the moment that we can't fly. We've got two brand-new A321s just sitting down here. It makes me cry, and then just down in the hangar, just down here, we've got a 787 that we can't fly 'cause we just can't get engines. Richard, what did I miss? They're good, except they don't last-
Yeah
... as long.
Okay, thank you for your question. And just over here, sir? Got two. We're gonna meet. We're having a competition. Yep, there we are. You all right?
Thanks, thanks a lot. Booking international fares online, why are there far more options that utilize Air New Zealand services available from offshore airlines than from the Air New Zealand website?
Hmm, good question. I'm not sure I'm gonna answer that one. Richard-
Um, yeah.
Do you have any-
One of the things we're working on at the moment-
Yeah
... is to redesign that whole booking engine, and we actually-
Mm
... spent some time with the board just this week at one of our board meetings, and you'll recall-
Mm
... that one of the things that the team are working on is how do they improve that-
Mm
... So, you know, it's been, while we've been dealing with all these things, we've been rebuilding a whole bunch of platforms-
Yeah
... that are quite old. So the loyalty platform I spoke to actually was installed in 1989. We've now completely redone that. If any of you have the app on your phone, that's completely been re-platformed. So we've got work underway on the, retail, you know, what we call the retail platform. More to do on that, but it doesn't show all the options we want. Progressively, they are fixing some of those things, but there's still a lot more still to do.
I think probably the only other thing about it, we've got a lot of arrangements with multiple airlines internationally on what we called, they're called Special Pro-rate Agreements. But it's effectively a price list that we give to other airlines to access seats on our flights, so that they can use their own sales and distribution network to sell our seats for us, which is very helpful.
Thank you, Richard and Greg. Anyone else, in the room have any questions? Final call. No, and Kim, you're satisfied we've answered all those questions online? Excellent. Well, that completes the formal business of the meeting today. Thank you so much. Thank you for your attendance and your participation this afternoon. And in conclusion, let me say that your continued support of Air New Zealand is very important and very much appreciated. I formally declare this meeting closed, and we invite you to join us now for light refreshments and afternoon tea.