Air New Zealand’s New CEO Backs London Flights, Regional Subsidies

By Andrew Curran

Air New Zealand’s new CEO Nikhil Ravishankar has reaffirmed the carrier’s commitment to restoring London flights and suggested the airline may need subsidies to continue operating some sub-economic domestic routes.

Ravishankar took over from Greg Foran on October 20. Three days later, he spoke on Radio New Zealand. Ravishankar’s first few days in the top job were not without incident. The airline flagged a NZD30 – 55 million (USD17.2 – 31.6 million) loss for the second half of 2025, saying a 2 -3% anticipated uplift across domestic and United States-bound bookings “had not materialised.”

In addition, the airline said engine lease costs were going to be around NZD20 million (USD11.5 million) higher than originally forecast, its financial obligations under the compulsory Carbon Offsetting and Reduction Scheme for International Aviation had increased by around NZD10 million (USD5.8 million), and there was a general softness in demand across New Zealand.

Compounding Ravishankar’s first week challenges, extreme weather across New Zealand resulted in Air New Zealand cancelling 181 flights, or around 40% of its total daily domestic flights, on October 23, impacting approximately 15,000 passengers.

Addressing softness on out-bound flights to the United States, Ravishankar said the most likely reasons were economic, but he denied Air New Zealand had put too much capacity into the US and was over relying on that market.

 

“We’ve got a good balance between North America and Asia,” he said. “We see the Pacific rim as our market and we don’t want to over-extend ourselves beyond that, but possibly (also) into London, which we are considering.”

 

 

Challenged on his wording, Ravishankar clarified, saying that Air New Zealand hoped to be selling tickets on its own London-bound aircraft by mid-2026

“It depends on getting hold of aircraft and engines,” he said. “That’s a dynamic situation. “

Air New Zealand axed its London flights in 2020, having announced its intention to do so the previous year. The flights were uneconomic, but the axing ended Air New Zealand’s presence in Europe. It has since secured slots at London Gatwick (LGW), with a view to resuming services.

The airline now has five B787-9s and five B787-10s on order. In its most recent annual report, the airline said it expected two B787 deliveries in 2026, three in 2027, two in 2028 and 2029, and the final aircraft in 2030.

“The CEO of Boeing met with our board last week,” said Ravishankar. “Boeing are getting themselves into a good position and are starting to manufacture around seven 787s per month and are going to get to about ten (per month). If they get there, then we get our five (ordered) aircraft delivered and one of those aircraft is what we’ll use to fly to London.”

Air New Zealand axed its London flights in 2020, having announced its intention to do so the previous year. The flights were uneconomic, but the axing ended Air New Zealand’s presence in Europe. It has since secured slots at London Gatwick (LGW), with a view to resuming services.

Ravishankar said the specific aircraft delivery dates are “still a bit fluid, but not as fluid as they’ve been in the past.” He said delivery timeline projections might now be a month or two off, but not a year off, as was the case until recently.

The CEO said Air New Zealand would know around February 2026 when London ticket sales could start.

Meanwhile, Ravishankar’s interview created local headlines when he said subsidising non-mainline domestic routes was “an emerging area we are starting to think about.”

The airline serves 20 airports across New Zealand using A320-200s, ATR72-600s, and DHC-8-Q300s. Most of these airports at in smaller cities and towns. Given the strong public service function these flights provide, reducing or cancelling flights can create considerable controversy.

However,  Ravishankar said, in his opinion, that there was a need for some regional routes to have some form of subsidy.

 

“I’m starting to refer to it as a situational subsidy,” he said. “When the economy is not doing so well and demand is low, we may need some subsidy to keep some of the routes going. When the environment is in a better shape, we don’t (need subsidies). We’ve got to be very surgical about how we think about a topic like that.”

 

Ravishankar said the routes, even though sub-economic, were critical and “connected New Zealanders to each other.” He said the routes drive GDP growth and it was important to keep them going.

“New Zealand depends on us,” he said.

Aircraft photo: AI-Generated.

Nikhil Ravishankar photo: Air New Zealand.