Australasian airlines make progress on fleet upgrades: part two - Air New Zealand & Virgin Australia

Australasian airlines are focusing on narrowbody fleet renewal this year, as the arrival of more modern and capable aircraft types increases their network options.

However, next year 2026 will mean the arrival of new widebodies that will have great significance for Air New Zealand and Qantas long haul services.

Executives from Australasian airlines discussed these fleet developments during the CAPA Airline Leader Summit Australia Pacific held in Cairns 31-Jul-2025 to 1-Aug-2025.

Part one of this analysis discussed how Qantas and Air Niugini are starting the delivery of new narrowbody types this year, and what this means for their operations.

This second part will look at Virgin Australia and Air New Zealand narrowbody developments, as well as widebody strategies for Qantas, Air New Zealand and Virgin Australia.

Summary

• Virgin Australia expects to take delivery of 12 Boeing 737 MAXs in the current fiscal year.
• Air New Zealand’s latest two Airbus A321neo deliveries will help its Tasman market push.
• The airline’s next 787 deliveries in Feb-Mar-2026 will be well suited to New York flights.
• Qantas is on track for its 'Project Sunrise' aircraft to arrive in late 2026.
• Virgin Australia will assess wet lease operations for a few years before deciding on widebody orders.

Virgin Australia is due to receive more Boeing 737 MAXs to boost its short haul network

Like its major rival Qantas, Virgin Australia is continuing to add narrowbodies and regional jets to its fleet this year 2025.

The airline is due to receive 16 aircraft in the fiscal year that began 1-Jul-2025, said CEO Dave Emerson at the CAPA conference in Cairns. This will include 12 Boeing 737 MAXs, and the remainder will be Embraer E190s to replace Fokker 100s in its regional fleet.

Delivery delays have meant the airline has had to "stretch out its fleet renewal" by extending leases and wet leasing domestic aircraft, said Mr Emerson.

Virgin Australia has so far received 10 Boeing 737-8s, which are operating alongside its 78 older 737-800s and -700s.

The airline has 29 Boeing MAX family aircraft remaining on order, comprising 18 Boeing 737-8s and 10 of the 737-10 variant.

Virgin Australia conducted an initial public offering (IPO) in Jun-2025, which resulted in the majority owner Bain Capital reducing its share of the airline to 40%.

Virgin Australia CEO Dave Emerson at the CAPA Airline Leader Summit Australia Pacific 2025

Source: CAPA - Centre for Aviation.

Mr Emerson stressed that the IPO was not aimed at raising capital to buy aircraft, because the airline is doing well financially and is generating enough money to fund its growth and fleet renewal plans.

Rather, the IPO was intended to set up a new ownership structure for the next phase of Virgin Australia's development, Mr Emerson said.

The airline accounts for about a third of the Australian domestic market, and will seek to maintain that share level, according to Mr Emerson.

Virgin Australia has a much smaller international network than before the COVID-19 pandemic, and only operates to a handful of international destinations in Southeast Asia and New Zealand that it can reach with its narrowbodies.

One change coming up for the airline's narrowbody fleet will be that passengers will soon be able to transport small pets in the cabin.

While this is common in Europe and North America, it will be new for Australia. Virgin Australia has been working through the regulatory requirements and plans to allow pets later this year, said Mr Emerson.

Air New Zealand's latest A321neo deliveries will help relieve narrowbody fleet pressure and enable Tasman growth

Air New Zealand has taken delivery of two new Airbus A321neos in recent months - one in Jun-2025, and the second on 13-Aug-2025. These are configured for short haul international flights rather than domestic.

The two aircraft will help mitigate an aircraft availability shortage caused by global heavy maintenance backlogs on Pratt & Whitney Geared Turbofan engines.

Air New Zealand has five of its Airbus narrowbodies grounded for this reason, in addition to having four of its Boeing 787s parked due to maintenance bottlenecks for Rolls-Royce Trent 1000 engines.

The narrowbody engine shortage has frustrated Air New Zealand's fleet and network plans for the past several months, but the arrival of the two A321neos will help the airline resume growth on its Australian and Pacific Island networks, said the airline's Chief Commercial Officer Jeremy O'Brien during the CAPA event in Cairns.

The airline has also managed to lease, or buy, some extra engines for its narrowbodies.

Air New Zealand Chief Commercial Officer Jeremy O'Brien at the CAPA Airline Leader Summit Australia Pacific 2025

Source: CAPA - Centre for Aviation.

Air New Zealand is launching a major push in the Australian market for the upcoming summer 2025 season, and its capacity is projected to be up by 10% year-on-year for that peak period, Mr O'Brien said. A new route between Christchurch and Adelaide is due to be launched in Oct-2025.

Qantas is also making a push in the Australia-New Zealand market. Mr O'Brien notes that demand remains strong in this market, despite intense competition, and capacity between the two countries is still at 91% of pre-pandemic levels, so there is room for growth.

Next wave of Boeing 787 deliveries will improve Air New Zealand's New York long haul operations

While the short term focus is on narrowbody additions for Australasian airlines, widebody deliveries will take more of the spotlight in 2026.

These will start with Air New Zealand's next two Boeing 787-9 deliveries, which are due to arrive in Feb-2026 and Mar-2026. The aircraft will be the airline's first to be equipped with GEnx engines, instead of the Trent 1000s powering its current 787 fleet, and they will also have a higher premium seat mix.

The engine and cabin configuration changes will give these 787s greater range, and Air New Zealand intends to use them on its longest route: between Auckland and New York.

They will not have the payload restrictions that are needed for the airline's current 787s on the New York route. It will "really change the commercial dynamics to have [these] fit-for-mission aircraft" operating these flights, Mr O'Brien said.

Another notable feature on the new 787s will be Air New Zealand's Skynest product, which is a pod with six bunk-like beds that can be booked for four-hour periods by economy passengers.

The airline is yet to divulge pricing, but it will likely be NZD400-NZD600 (USD240-USD350) for a four-hour sleep period.

Qantas Airbus A350-1000s arriving next year will enable its much-publicised 'Project Sunrise' flights

Qantas is on track to take delivery of its first A350-1000s in late 2026, said Qantas Domestic CEO Markus Svensson at the CAPA summit in Cairns.

These aircraft have been modified to extend their range, and will be used to operate the airline's proposed record-setting ultra-long haul flights between Sydney and London and New York from early 2027 under its Project Sunrise initiative.

The first of these aircraft are already in the production process, Mr Svensson said. Qantas has 12 of the modified A350-1000s on order, and has also ordered 12 of the standard version of the A350-1000, which are due to be delivered from FY2028.

Another 12 Boeing 787s are also due in FY2027.

Virgin Australia will assess its own widebody order, although a decision could still be some way off

Virgin Australia does not have any widebodies on order, but it will consider taking such a step, Mr Emerson said.

Although it has no widebody aircraft of its own, the airline began operating Boeing 777s wet leased from Qatar Airways in Jun-2025.

The Boeing 777s allow Virgin Australia to offer flights from Australian destinations to Doha, in partnership with Qatar Airways. This means Virgin Australia can test the long haul market without having to spend many millions on widebodies, Mr Emerson said.

"We will monitor the performance of these flights, and see what the economics look like," Mr Emerson said. This will give the airline an understanding of whether "we have an investment case to put our own capital into long haul [aircraft]".

Virgin Australia will probably take a couple of years to assess the results from the wet lease flying, Mr Emerson said. He noted that the arrangement with Qatar Airways has been authorised for five years.

The partners will also consider transitioning the wet leases to dry leases.