Continental Airlines has "stolen a march" on Air New Zealand with its plans to introduce the first B787-8 Dreamliner service to New Zealand on November 16, Forsyth Barr broker Peter Young says.
Continental will begin, subject to Government approval, a direct Houston-Auckland flight with Auckland becoming the North American airline's 64th international destination.
Continental, the world's fifth-largest airline, would be just one of three airlines flying non-stop between North America and New Zealand. The others were Air NZ and Emirates.
Mr Young said the introduction of services from the Dreamliner had been "a long time waiting". It had been planned to be in service in 2008-09 but manufacturing delays had taken the gloss off the excitment.
"This announcement highlights the huge potential the Dreamliner offers New Zealand as a destination.
"We believe the Continental services will be more about growing the market than taking market share from Air NZ. The market is constrained by frequency of services and price. The Dreamliner substantially improves both of these."
Continental planned to operate the route on a daily basis but with a five-times-weekly service during part of the first year.
Air NZ planned to launch its B787-9 Dreamliner probably in 2014-15, he said. The B787-9 was what the industry referred to as the "extended range" aircraft.
Typically, the extended range aircraft ironed out all the operating issues of the original aircraft - B787-8. Then, the aircraft was stretched to carry a higher number of passengers, further increasing the operating efficiencies of the aircraft.
Air NZ had options to buy the Dreamliner at very low prices, Mr Young said. The national carrier was the launch airline for the extended range but more importantly, the price being paid was probably the lowest of any airline, being set in the early 2000s.
The current list price of the B787-9 was $US190 million ($NZ279 million) but when it was first released, it was $US120 million because the threat of terrorism was at its highest.
"We don't know what level of discount Air NZ got on its order of 16 Dreamliners but the suggestions were that it received a larger-than-normal discount - maybe 50% or even 60%."
Those discounts applied on the $US120 million and would imply that Air NZ had a huge price advantage on the cost of its Dreamliner fleet.
In the opinion of Forsyth Barr, it had been a prudent move to target the extended range Dreamliner, Mr Young said.
While Continental might have "nudged" ahead of Air NZ to launch the first Dreamliner service to New Zealand, Mr Young believed Air NZ would be well positioned with the B777-300 and, further out, with the B787-9.
Continental said its planned schedule for the new service had both winter and summer timings.
In summer, the Dreamliner would leave Houston at 9.30pm and arrive in Auckland at 5.10am (two days later). In winter, the flight would leave Houston at 9.10pm and arrive at 6.55am.
The return flights would leave Auckland at 3.40pm in summer and arrive in Houston at 11.50am the same day. In winter, the flight would leave at 5.55pm and arrive in Houston at 11.55am.
