Air New Zealand‘s sleep strategy is the organising principle behind its long-haul expansion, CEO Nikhil Ravishankar told AeroTime at the IATA 82nd Annual General Meeting in Brazil, even as the airline confirmed a delay to the arrival of its first new Boeing 787s.
Ravishankar, seven months into the role at the time of the conversation, described the airline’s long-haul ambition in direct terms. ‘On the long-haul fleet, if I could summarise our strategy into a single line, it would be “to win on sleep”,’ he said. The carrier is expanding its B787 fleet from 14 to 24 aircraft by adding 10 new Dreamliners, and the first two of those on order will feature SkyNest, the airline’s bunk-bed product for economy-class passengers first unveiled in 2020, with sales going live in May 2026.
Dreamliner delivery timeline pushed back
The expansion timetable has, however, shifted. According to RNZ, the first two of the 10 new Boeing 787s on order will now arrive in the first half of Air New Zealand’s 2027 financial year, rather than the 2026 year ending 30 June. That pushes the earliest SkyNest-equipped widebody deliveries past the airline’s previous schedule, though Ravishankar indicated commercial momentum is already building. ‘The early signs are very promising commercially as well. They’re selling well, so you can buy it today. It’s on sale,’ he said of the bunk beds.
Each of the two lead aircraft will carry seven different seat products, with five of those seven optimised for sleep. The configuration reflects the carrier’s view that ultra-long-haul travellers, connecting through New Zealand’s geographically isolated position, place rest at a premium. Ravishankar said the sleep-first approach will inform the wider widebody fleet as it scales up.
On the existing fleet, recovery from a prolonged period of groundings is nearing completion. About 20% of the carrier’s fleet was grounded a year prior to the conversation due to engine issues across both narrowbody and widebody types. Ravishankar said that by the end of the month in question, just one aircraft would remain on the ground for engine-related reasons. Ch-aviation has reported that Air New Zealand expects all its grounded B787-9 jets to return to service by late June 2026, with its Airbus aircraft fleet fully restored by 2027. The last of the stored B787s that had been grounded since the COVID-19 pandemic re-entered service in early July 2026.
Fuel costs and Air New Zealand sleep strategy in context
The operational recovery comes against a backdrop of acute cost pressure. Ravishankar pointed to the fuel crisis triggered by the conflict in the Middle East as the primary external headwind, noting that the Asia-Pacific region is ‘a little bit more exposed’ given how much of its crude supply originates from the conflict zone. Air New Zealand was among the first carriers to cancel flights in the first half of 2026 in response to the supply shock, though Ravishankar was clear that the impact is a pricing problem rather than a volume one. ‘This is a pricing issue for us, not a supply issue,’ he said.
The airline is mitigating approximately 40% of the price increase through a combination of fare increases, flying consolidation, frequency reductions and cost management. Ravishankar described the approach as ‘the same algorithm that all airlines are using to deal with this situation.’ The fuel headwind is, in turn, softening the demand profile, particularly on domestic and outbound Kiwi traffic.
New Zealand’s domestic network, spanning 20 destinations, handles roughly 10 to 11 million of the carrier’s approximately 16 million annual flights, connecting a country Ravishankar described as the size of Japan but with only 5.3 million people. International demand is holding up better, driven in part by tourism, which accounts for around 43% of inbound international visitors and which Ravishankar described as currently as strong as it has ever been.
Singapore is the airline’s single largest foreign market, ahead of Australia, the United States and parts of Asia. China visitor numbers have ‘started to pick up again,’ Ravishankar said, pointing to Shanghai, Hong Kong and Singapore as key hub connections for the carrier’s Asia-Pacific reach. With 40% of New Zealand’s global trade conducted with China, he described it as ‘a very, very important market.’
On the domestic side, weaker consumer spending and pressure on the New Zealand dollar are dragging traffic, though Ravishankar characterised the softness as cyclical. Passenger satisfaction scores and on-time performance are, he said, at their highest levels, with the carrier consistently ranking among the top five airlines globally on operational metrics. The first SkyNest-equipped B787-9s are now expected in the first half of the 2027 financial year.
