Bloomberg News

Air NZ Delays Licensing ‘Cuddle-Class’ to Keep Exclusivity

June 08, 2011

(Updates with closing share price in sixth paragraph.)

June 8 (Bloomberg) -- Air New Zealand Ltd., the country’s state-controlled carrier, delayed plans to license its “cuddle- class” seats to other airlines because of surging passenger demand for the lie-flat units.

“We want to have it exclusive for longer,” Chief Executive Officer Rob Fyfe said yesterday in Singapore in a Bloomberg Television interview. Bookings for the in-house designed seats are 30 percent higher than for normal ones, he said.

Air NZ this year began flying Boeing Co. 777s fitted with the units, which comprise three economy-class seats that can be converted into a bed, to help compete with Emirates Airline and Singapore Airlines Ltd. on long-haul routes. The carrier was in talks to sell the technology to other airlines, Fyfe said in December.

The Auckland-based carrier also anticipates an earnings boost of as much as NZ$40 million ($33 million) from the Rugby World Cup, which begins in New Zealand in Sept. 9, Fyfe said yesterday. The six-week-long event may help the airline recover from a forecast loss in the first six months of the year following earthquakes in Christchurch and Japan, as well as floods and a tropical cyclone in Australia.

“This is the toughest half-year I’ve experienced since I came into this role,” said Fyfe, 50, who became CEO in 2005. The boost from the World Cup “is significant when you’ve come off a tough year.”

The airline fell 1.9 percent to NZ$1.02 at the 5 p.m. close in Wellington trading. It has plunged 32 percent this year, the second-worst performance in the benchmark Top 50 Index.

The Rugby World Cup will likely draw about 85,000 overseas visitors to New Zealand, the organizers said after the initial ticket allocation in November. Prime Minister John Key has predicted the event will give the economy a 0.3 percent boost in the second half, helping the nation rebound from the February earthquake in Christchurch.

--With assistance from Liza Tan in Singapore. Editors: Neil Denslow, Dave McCombs

To contact the reporter on this story: Robert Fenner in Singapore at rfenner@bloomberg.net; Haslinda Amin in Singapore at hamin1@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net


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