A decision by Air New Zealand (NZ, Auckland International) to suspend its Auckland-Seoul Incheon route has highlighted capacity constraints at the carrier caused by engine shortages and delayed refurbishment of its B787-9s.

The first B787-9 ferried to Singapore Changi for its cabin refurbishment on October 13. The airline was expecting it back shortly after Christmas, but ZK-NZH (msn 37964) remains in Singapore. Aside from engine shortages, Air New Zealand pointed to shop capacity, OEM delivery delays, supply chain constraints, and workforce shortages as additional challenges it faced.

The airline hopes to retrofit all fourteen of its B787-9s by the end of 2026, including seven by the end of 2025. However, given the delays with ZK-NZH, that timeline may change. Air New Zealand has quietly shifted the re-entry into service of this aircraft from mid-February to mid-year. Of the three remaining out-of-service B787s, two are parked at Auckland and one is in long-term storage at Alice Springs.

"As this is the first retrofit and the first time this product is featuring on an aircraft, the certification process has been extensive, which has contributed to the delay, alongside global supply chain challenges," an Air New Zealand spokesperson told ch-aviation. "But we’re excited to have it back and flying in the next couple of months. At this stage, we remain on track to complete all 14 aircraft by the end of 2026."

Air New Zealand also has two A321-200NX stored at Alice Springs, one stored at Christchurch, one stored at Auckland, and the fifth undergoing maintenance in Singapore. Since Pratt & Whitney first flagged problems with the PW1000G engines, Air New Zealand has been foreshadowing it would create capacity shortfalls. It operates twelve A321-200NX in total.

This closely aligns with the airline's advice during a November 2024 investor's call when it flagged having up to six A321neo and four B787-9s out of service at any one time across most of 2025.

Last week, the airline confirmed the seasonal flights to Seoul would not return until 2026, citing "ongoing challenges with engine availability." Complicating matters, it has additional long-haul aircraft out of service undergoing cabin refurbishments. The airline had already suspended its Auckland-Chicago O'Hare flights for the same reason.

The lack of aircraft is partially offset by making network changes, including aircraft swaps on certain routes and reducing frequencies but using bigger aircraft on a particular route. The airline has also leased three B777-300ERs in the past 18 months, increasing its B777 fleet size to ten. This has helped mitigate the impact of the out-of-service B787-9s. CEO Greg Foran likes the type's reliability.

"The B777 is a bit like a 1986 Toyota Corolla," he told the investor's call. "It is going to start every time, and the GE90 engines on them are something to behold. You don't have to take them off wing every 750 cycles. You can leave them on there for several thousand. We like them."

"How did we end up getting three really good ones? Relationships. It also helps when you've got a good balance sheet, and it also helps when you have a good engineering and maintenance department that looks after these things, but that's one of the ways that we've been able to keep this thing moving along."

All ten Air New Zealand B777-300ERs are active. The three leased aircraft, delivered to Air New Zealand between October 2023 and October 2024, were sourced from Cathay Pacific.