How the Air NZ 787-9 would look in All Blacks livery: Air NZ graphic

It’s not just passengers who will feel the squeeze in economy when Air NZ inaugurates the world’s first service with the Boeing 787-9 variant in less than a year on the Auckland-Perth route.

By October 2014 when those flights start, and are soon followed by the jet’s appearance on the Auckland to Shanghai and Tokyo routes, Qantas will need to resolve its promising, yet problematical strategy of holding only options on delivery slots for the second stretched version of the Dreamliner from 2016 onwards, rather than firm orders.

Qantas says it will not exercise those options unless its full service long haul operations have been returned to profitability. That’s a make or break commitment for the future of Qantas. The airline has no encouraging guidance for its performance in the current financial year, and has been filing disconcertingly poor monthly activity reports to the ASX. Qantas group CEO Alan Joyce has said that he expects yields to deteriorate by up to three percent to the end of this December.

By this time next year Boeing will be itching for Qantas not to exercise the first of those 787-9 options in order to sell the production slots to other airlines eager to snap up the much delayed yet highly appealing second version of the Dreamliner because the price struck for these jets way back in 2005 when the original Qantas deal was done was very cheap.

In that sense the Qantas order for the 787 family of jets was one that Boeing could readily afford to lose.

The Air New Zealand challenge with its use of this more capable version of the Dreamliner is that it puts the spotlight on the potential Qantas keeps selling to its investors for its fleet plans, in the face of the stubborn reality of poor operational results.

Qantas paused its expansion plans several years ago, while everyone else has been growing on what is left of its international routes.

Everyone, including Mr Joyce, waxes lyrical about how the 787-9 will or could take Qantas back into the cruel world it has disengaged itself from in terms of reviving past glories. He has eloquently argued the case for using the jet over Dubai to re-open or initiative various secondary services deeper into Europe and the UK.

The time for action on this fast approaches. It isn’t just Air NZ that will use the 787-9 type effectively against Qantas. Scoot intends to follow up its use of 787-8s by 2015 with the larger -9s later this decade. Or not so much later if it were to pick up through its owner Singapore Airlines, some of the options that Qantas has to use or lose in the near future.

The 787-9 looks entirely different when seen from the perspectives of a traveller and an airline.  For the former, it is turning into just another uncomfortable plane. For the latter, it looks like a highly effective, lower cost means of serving the robust expansion of the Asia-Pacific market for air travel.

This difference is well illustrated in the overall compactness of the Air New Zealand seat map, found here.

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