It sounds like it should be populated with bespectacled boffins poring over a crashed alien spaceship and there is almost as much secrecy surrounding Air New Zealand's "Hangar 22". The closely-guarded project in a secure building near the company’s headquarters is home to research off limits even to some Air New Zealand executives. But it has more to do with capturing the imagination of business travelers than catching little green men. The facility's mission is to take the airline’s highly-regarded business class product to the next level for next-generation aircraft due to arrive early next decade. Read: World's best airlines for 2018 The last time Air New Zealand undertook a similar project it produced the successful economy class Sky Couch and a unique take on premium economy.

The existing herringbone business product has served the airline well and largely stood the test of time. But it is now a decade old and faces stiff competition from the likes of Qatar’s impressive Qsuite. The airline has replaced its older Boeing 747s, 767s and 737s with new aircraft and now has a young fleet with a consistent product and an average age of 6.8 years. Read: Aussies bolster Air New Zealand routes to the Americas. It wants to replace its Boeing 777-200s from 2022 and this year put out a request for information for potential successors such as the Airbus A350s, Boeing 787s and Boeing 777Xs. It expects to put out a request for proposals (RFP)  next year and wants to introduce the new product across its entire fleet when the new aircraft start arriving. AirNZ chief executive Christopher said the airline had worked hard to get to a consistent product and wanted to be able to refurbish the existing fleet “pretty quickly”. He said there were things the airline could do in the interim to make Business Premier an even better cabin and refresh it. But in the longer term, it wanted to determine what the future really looked like. “So we have a lot of customers coming through what we call Hangar 22 just trialing new stuff, looking at what their needs are and getting a bit of sense of that,’’ he told AirlineRatings at the recent IATA conference in Sydney. Air New Zealand’s previous test-bed pushed the boundaries of what might be possible in economy and Luxon said the new project would do the same, going back to first principles and building the product up with customers. “To be honest, we’ve looked all around the world and all that product is variations on a theme,’’ he said. “We look at that, and are very cognizant of all of that, but we also have great confidence from our past to go back to a blank piece of paper and start again. “So that‘s really what we’re trying to do there. “Our seat is still really well loved because it’s not a bumpy, rickety sort of thing.  It gives you a great platform for a good sleep and that’s what you need in New Zealand. “Most of our flights are at night time —flying to the Americas or China or Asia —   and you want to get a good sleep. “And that’s what that cabin proposition has to be about.”

DIGITAL INNOVATION

Also high on the Kiwi airline’s agenda is digital technology. One of the reasons other airlines watch Air New Zealand closely is its global reputation for being innovative and punching above its weight. Its innovations range from an app that allows customers heading to the lounge to order coffee to automatic bag drops with face-to-passport recognition and Airband, a wristband that allows parents to track the journey of an unaccompanied minor. Luxon upped the ante almost three years ago when in  Silicon Valley veteran Avi Golan as the airline’s chief digital officer and a direct report. The airline now has a team of 650 people working in the area. It has since been investigating technologies such as augmented virtual reality and Google translate for cabin crew.

The Air NZ boss believes innovation is a key to helping customers and updating “insanely frustrating” ways of doing things where some aspects hadn’t changed for 50 to 70 years. “Bag tags, check-ins —  is there not a different way of doing all this stuff?’’ he said. “How do you make it more frictionless, easier? “So there’s a lot about the customer journey and removing pain points. We have the journey mapped out and we know where all the frustrations are, so how do we use technology to solve it?’ Also important was simplifying the operation of the business. Luxon said many airlines and other businesses were simply putting a “digital veneer” over their operations but had not fundamentally changed the way they worked or their operating process. By following technological change to its conclusion, AirNZ got a great customer outcome, better operational processes and, in some cases, something for which customers were happy to pay. “They’re happy to pay for an unaccompanied minor service because it’s technology-driven with the Airband,’’ he said. “You know where the kid is, you get your five ticks at each end and anxiety’s removed so the pain point frustration is gone. “Everyone’s happy – the parents, the grandparents, the kids. We’re happy because we can track everything we know where everyone is  it simplifies our processes —  it’s not paper-driven like it was.” One area many airlines and airports are investigating is biometrics and Air New Zealand is hot on that trail after introducing its biometric bag drop two years ago. “Obviously US enhanced security arrangements have changed some of what we can and can’t do at the moment,’’ Luxon said. “But I do think biometrics is a really good way to go. “It leads to great accuracy we’re done a lot around RPA (robotic process automation), a lot around artificial intelligence. “We’ve still got a long way to go but we’re on the right pathway on those things.”