Air New Zealand prepares for increased domestic competition

Map: New Zealand
The three major cities dominate the airport scene in New Zealand (pop 4.1m). Tourism is thriving, helped by movie buffs keen to see location used in Lord of the Rings.

Logo: New Zealand

Let’s face it, if you think Australia is a long way from most places then New Zealand is even more remote. Despite (or maybe because of) its location New Zealand has a thriving tourism industry helped in recent years by it being a popular location for filming ‘epic’ movies like the Lord Of The Rings trilogy.

Big growth at NZ’s major airports

Three major airports serving Auckland, Christchurch and Wellington dominate the airport scene of New Zealand (pop 4.1m). These are the only airports with more than one million annual passengers. Since 2002 traffic at Auckland has grown by 30%, Christchurch 25%, and Wellington by 20%.

Chart: New Zealand big 3 airports
Source: ATI

Australian routes dominate

Logo: christchurch

For the last 10 years Auckland’s share of New Zealand’s international traffic has remained stable at between 70% and 75%. Christchurch’s share is around 17% and Wellington contributes a further 7%. In terms of the top 10 destinations Australian airports take the top three places with traffic to Sydney averaging well over two million annual passengers in each of the last three years.

Chart: New Zealands Top 10 International Routes
Source: NZ Government Statistics

Singapore has overtaken Los Angeles as the leading non Southern hemisphere destination. Not surprisingly Australia dominates when looking at most popular country destinations followed by the USA which offers direct services to Los Angeles and San Francisco.

Country Frequency Share Capacity Share
Australia 67.2% 59.8%
USA 6.1% 9.2%
Singapore 3.3% 5.2%
Hong Kong 2.8% 4.1%
Fiji 4.3% 4.0%
Source: OAG Max Online for w/c 08 October 2007

Pacific Blue, Kiwijet tackle Air NZ domestics

The three leading airports also dominate domestic air travel with a combined capacity share of over 70%. Seven further airports have capacity shares of between two per cent and four per cent.

Chart: New Zealand domestic routes
Source: OAG Max Online for w/c 08 October 2007
Image: Air New Zealand
The first of Air New Zealand’s four 787-900 arrives in 2010: Air New Zealand and Rolls-Royce have just announced a memorandum of understanding to conduct biofuel trials to accelerate the development of viable and sustainable alternative fuels.

Logo: Air New ZealandAir New Zealand has a 90% share of the domestic market with Qantas providing the only hint of competition at present on a handful of routes. In its 2006/07 financial year Air New Zealand carried 7.74 million passengers (up 5.2% on previous year) on domestic routes at a load factor of 75.3% (up 0.2 percentage points). Although domestic passenger numbers make up 62% of Air New Zealand’s total passengers in terms of available seat-kilometres these services contribute just 13% with international services responsible for the remaining 87%.

Image: Pacific Blue
New Zealand’s Pacific Blue – just like Virgin Blue.

Logo: Pacific BlueHowever, Pacific Blue, the international subsidiary of Virgin Blue in Australia announced plans in August to start domestic services in New Zealand on 15 November, on the three main trunk routes under the banner of “Pay a visit, not a fortune”.

Auckland to Wellington will be served five times daily, Wellington to Christchurch three times daily and Auckland to Christchurch twice daily. All routes will be operated by 737-800s.

Image: KiwiJet
Kiwijet won’t actually look like this – it has just swapped from plans to use ERJ145s to four Avro RJ-100s. Domestic services start November 2008.

A new local start-up airline Kiwijet has been planning operations for some time. Initially the airline was hoping to use ERJ145s but due to sourcing difficulties it now plans to operate larger Avro RJ-100s. Kiwijet’s base will be in Christchurch and the airline intends to launch in November 2008 with four aircraft serving Auckland, Hamilton, Invercargill, Nelson and Palmerston North on a daily basis.


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