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Grant Bradley: aviation industry expert on Air New Zealand's engine struggles easing · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks be follow
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  Speaker 2: Air New Zealand says finally something's going right. They say
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  Speaker 2: their long running engine problems are finally easing. So in
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  Speaker 2: recent years, up to twenty percent of the airline's fleet
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  Speaker 2: has been grounded by global engine maintenance delays, and the
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  Speaker 2: airline estimates those disruptions cost it about ninety million dollars
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  Speaker 2: in earnings in the first half of the financial year.
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  Speaker 2: But chief executive Nikil Ravishanka says by the end of
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  Speaker 2: the month only two aircraft will still be unfliable. So
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  Speaker 2: Grant Bradley is an aviation industry expert, former New Zealand
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  Speaker 2: Herald aviation journalist, former correspondent with Me on the Afternoon
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  Speaker 2: The Hour show. Grant, loving to talk to you again.
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  Speaker 3: Absolutely nice to speak Andrew.
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  Speaker 2: Finally a win for Air New Zealand. Something's going right.
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  Speaker 3: Yeah, yeah, Look, it's could turn out to be a
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  Speaker 3: a decade of pain. Really. They started having problems with
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  Speaker 3: rolls voice engines on their Dreamliners back in twenty seventeen
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  Speaker 3: and these were quite severe problems that needed a very
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  Speaker 3: quick fix. But it turned out to be a long
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  Speaker 3: running problem with them, but you know Sid's law. They
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  Speaker 3: also had an aircraft, sorry, an engine type on their
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  Speaker 3: smaller planes domestic and short haul planes, the Spratt and
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  Speaker 3: Whitney engines that turned out also needed a major fix
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  Speaker 3: and so almost unique and among airlines and having both
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  Speaker 3: engine types, so extremely bad luck but light at then
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  Speaker 3: the tunnel.
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  Speaker 2: Is this going to get their bottom line out of
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  Speaker 2: a nos, Dave.
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  Speaker 3: Yeah, look, this is its early days really on that front.
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  Speaker 3: I think some analysts have been picking a full year
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  Speaker 3: loss of four hundred million plus that will see reporter
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  Speaker 3: and all this. So yeah, that's a that's a that's
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  Speaker 3: a huge hole to fill and then recover from. But
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  Speaker 3: this is this is you know, it could be the
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  Speaker 3: start of the recovery. They're with you sorry, with their
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  Speaker 3: all their existing fleet back in action by the beginning
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  Speaker 3: of next year at the latest. And and also more
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  Speaker 3: exciting is seeing new Dreamliners come into their fleet with
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  Speaker 3: brand new cabins and designed for these ultra long haul routes.
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  Speaker 3: The the it's a it's a multi year recovery from
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  Speaker 3: from the hole therein.
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  Speaker 2: But yeah, yeah, now, look, this engine thing has been
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  Speaker 2: going on for seven years, or you see basically a
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  Speaker 2: decade of problems. But yeah, it's been going on for
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  Speaker 2: seven years, and it was all resolved and all talked
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  Speaker 2: about at the World Airline Summit, and the head of
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  Speaker 2: that conference, which was held in Brazil, said that the
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  Speaker 2: engine factories have been gouging the airlines and taking how
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  Speaker 2: long it took to fix the problem and all that,
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  Speaker 2: and the fact that the problem was a problem in
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  Speaker 2: the first place. Do you think he was right? Are
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  Speaker 2: the engine factories gouging airlines?
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  Speaker 1: Yeah?
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  Speaker 3: Look there engine makers, airframe makers like Airbus and Boeing.
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  Speaker 3: They they're profit driven companies. They're going to get what
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  Speaker 3: they can by selling they what they make, so and
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  Speaker 3: then when things go wrong, the recovery is not always
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  Speaker 3: as quick as what it should be. There's been tens
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  Speaker 3: of millions of dollars being paid in compensation here, but
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  Speaker 3: that hasn't hasn't gone anywhere near covering the the opportunity
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  Speaker 3: costs that's been lost by New Zealand by not having
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  Speaker 3: aircraft to fly people around, especially maybe eighteen months a
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  Speaker 3: year ago when there was huge demand but they didn't
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  Speaker 3: have the planes. Yeah, and I guess in a way
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  Speaker 3: rather ironically, they're finally getting all their planes back at
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  Speaker 3: a time when they're actually having to trim roots because
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  Speaker 3: of the current fuel crisis.
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  Speaker 2: Well, I was going to ask about that. I was
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  Speaker 2: going to ask about that because this summit in Brazil
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  Speaker 2: is all the airlines getting together and having a chinwar,
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  Speaker 2: and so they'll be talking about the situation in the
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  Speaker 2: straight up horr moves and the implications of the Iran
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  Speaker 2: Israel USA conflict. Are you hearing anything coming out of
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  Speaker 2: that that's about how airlines are getting through and what
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  Speaker 2: they're expecting.
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  Speaker 3: Oh, look, the airlines of the figures don't look great.
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  Speaker 3: They were expecting to among them make profits of around
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  Speaker 3: about forty billion this year. Now that's been half. That
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  Speaker 3: outlock's been halved, and that's on the on the back
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  Speaker 3: of the seventy percent rise and jet fuel prices. You know,
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  Speaker 3: just how quickly they can recover that as the great question.
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  Speaker 3: You know, it's an airline, so they burn money quickly,
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  Speaker 3: but they can earn money quickly, and they can turn
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  Speaker 3: around these losses into into superprofits quite quickly if they
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  Speaker 3: get the tail wins, and it does happen. It's a
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  Speaker 3: very highly volatile sector.
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  Speaker 2: Absolutely all right, Grant love you to talk to you again.
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  Speaker 2: Carry on with the good work. At is seventeen minutes
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  Speaker 2: to seven. This is News Talk B. Now.
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