Air New Zealand hopes to have its first electric aeroplane ordered within a decade.
Chief executive Christopher Luxon told the Nelson-Tasman business community at a luncheon on Wednesday, environmental concerns were driving a passenger trend away from long-haul flying, and the industry had to adapt.
He says in Western Europe and Scandinavia, "flying guilt" is starting to appear, which means fewer are flying long distances, or not booking a flight at all.
Mr Luxon says bio-fuels, aircraft powered by hybrid systems and even electrically powered craft are all on the horizon.
He says Air New Zealand's turboprop engineering base in Nelson is well-positioned to adapt to the changes.
Mr Luxon says four billion of the world's 7.6 billion people flew on an aircraft last year which brought great advantages socially and economically.
But environmentally it was a growing challenge, because the two to four percent of global greenhouse emissions generated by airlines was likely to increase.