Innovation finds a home in NZ

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Air New Zealand

Innovation finds a home in NZ

Air New Zealand has a home market of 4.8 million, an international fleet
of under 50 aircraft and it flies from an end-of-the-line destination that is
not directly on the road to anywhere.

Yet it consistently out-performs much bigger and more highly
resourced competitors. How can it do that when aviation is regularly
portrayed as an industry where scale matters and bigger is better?

Air New Zealand is able to do what it does because it is better at one thing than almost any other airline — innovation.

The airline innovates on things that matter to customers. Air New Zealand finds out what passengers want, sometimes even before they articulate that, and then finds partners to design the experience.

It innovates in all areas of its business with particular focus on customer experience, aircraft renewal and route expansion. Its innovation path includes autonomous electric air-taxis, Magic Leap 3D gaming, iQIYI and Netflix streaming services, Skycouches, 3D
printing of parts, new technology aircraft and expanded routes.

“We are committed to being innovative right across our business, from internal products for our staff through to enhancing the customer experience with the products and services we offer both in the air and on the ground,” said Nick Judd, chief of strategy and the airline’s Networks and Alliances Officer.

It is also making money with revenues at record levels, profits of NZ$540 million (US$294.5 million) in the last financial year and investments in aircraft and customer experience climbing.

In the Trip Advisor 2018 Traveller’s Choice Awards, Air New Zealand ranked second of all airlines globally, first in the South Pacific and won Best Premium Economy Class globally for the second consecutive year. The airline’s Premium Economy Class was also judged number one globally in the Skytrax 2018 rankings.

“The various awards reflect our commitment to delivering anoutstanding experience on the 17 million customer journeys we facilitate every year and are an acknowledgement of our continued investment in the customer experience in the past few years on the ground, in-flight and through our digital channels,” Judd said.

Innovation is used in many ways by airline marketers but the traveller experience has not changed as quickly as technology allows. Air New Zealand is looking to where it can introduce changes that give passengers innovations that, while often not earth shattering, actually are what appeals to them, particularly the tech-savvy.

In a clue to the airlines thinking on innovation, CEO Christopher Luxon said that he takes his inspiration on customer service not from the airline industry but from Disneyland, luxury cruises and five-star hotels. He believes it is better for the airline to look in those places because they have much higher levels of service than airlines do. In March Luxon said: “We have about 700 people in our digital team.

We want to be the most digitally advanced airline in the world and also one of the most digitally advanced businesses in Australia and New Zealand. There’s a whole spectrum of technology available. We don’t want to run everything as a bog-standard airline doing incrementalism. We have a bigger and better vision of where we want to go.”

Rather than announcing new cutlery in First Class or the latest celebrity chef offering in Business Class, Air New Zealand is bringing innovation that changes the customer experience and makes long-haul more bearable, even in economy.

Skycouch is something that immediately sets Air New Zealand apart from traditional Economy Class seating. Put simply, booking Skycouch means all three seats in the row
are allocated to the one booking, perfect for a couple or those travelling with infants.

The seats are regular economy seats with an additional footrest that folds to form the couch, which can be adjusted to 60 and 90 degrees. The window and middle armrests fold up and with the supplied bedding and pillows the economy seats turn into a lie flat bed

The thinking behind Skycouch typifies the approach to innovation that is so successful
within the airline. Rather than tinker with the inherently uncomfortable individual seat as
most airlines do, it offers to expand the space, at a price, for those who want more room.

“Some recent examples which demonstrate our commitment to innovation include
our work with US startup Magic Leap to develop a multiplayer spatial computing gaming
experience, our ‘Bird Mask’ partnership with Allbirds and our recent partnership withone of China’s largest online video platforms, iQIYI,” said Judd. “With the rapid advance of digital technology we are looking at digital innovations that will give customers greater flexibility and connectivity during their flight.”

For more than 18 months, the airline has been working with US spatial computing company, Magic Leap, developing a lightweight, wearable computer that allows digital content to step out of the screen and into the real world. The game sees players, who are
wearing the Magic Leap technology, viewing a physical 3D map of New Zealand and be transported into a world of giant Kauri trees, hobbits, whales and bungy jumps.

In September, the airline launched iQIYI as a channel on its inflight entertainment system on all flights, providing Chinese-speaking customers with an enhanced service. iQIYI, a leading online entertainment business based in Beijing, features highly popular original content and programming from Netflix and Warner Brothers.

The platform has more than 500 million monthly active users and is one of the largest online video sites in the world. It is distinguished from traditional media outlets by its use of artificial intelligence and big data to enhance user engagement.

October saw the airline introduce the ‘Bird Mask’, a reusable eyemask designed to help passengers sleep more soundly on long-haul flights. The masks are made from New Zealand merino wool and castor bean oil-based foam and made by Allbirds, an innovative New Zealand brand known for its comfortable footwear. Air New Zealand conducted on-board trials in developing the masks, resulting in the quirky birdlike beak to block light out completely.

Sometimes the worst part of a longhaul flight is the taxi queue outside the airport and Air New Zealand is looking at a solution to that as well. It has signed a deal with Zephyr Airworks, a subsidiary of Kittyhawk, to bring autonomous electric air taxi services to New Zealand. Unveiled this year, Cora, is an autonomous electric aircraft developed
by Zephyr’s parent company, Kitty Hawk and is currently being trialled in New Zealand.

Announcing the partnership, Luxon said the airline is committed to embracing new technologies that make life easier. “Zephyr Airworks is leading the way in re-defining personal mobility to make it easier for all of us to get around. Their innovative technology and commitment to New Zealand make them an ideal partner for advancing the future of travel in New Zealand,” he said.

Air New Zealand is not restricting innovation only to its customer experience and has taken the step into 3D printed parts for maintenance, repair and overhaul (MRO). The airline has partnered with a local specialist, Zenith Tecnica, and has used the technology to make cabin framing for prototypes, IFE parts and more advanced parts in cooperation with Singapore’s ST Engineering.

Taken in isolation each innovation could be put in the ‘so what’ category, however when seen as a whole they are steps on the path to transforming the traditional airline customer experience.

The airline’s fleet is also undergoing change with the replacement of aging A320ceos with the larger and more fuel efficient A320neo family. These aircraft are equipped with new engine technology that will deliver fuel savings and efficiencies of up to 15 percent compared to the existing aircraft in service.

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