Air NZ to announce new long haul route
NZ’s The Dominion Post reported over today that Air New Zealand is expected to announce a new long-haul route this week and it is most likely to be to Vancouver, Canada.
New routes typically have about a five-month lead time, suggesting the first flight would be about July, but Air New Zealand would not be drawn on the speculation.
House of Travel Retail Director Brent Thomas said Vancouver would be an exciting year-round tourism destination with British Columbia offering spectacular mountain and water scenery in summer as well as easy access to some of the best skiing in the world.
It would also open the direct inbound market from Canada, with Air New Zealand and Canada code-sharing via Honolulu at present, with the airline’s new Boeing 777-200ERs able to fly direct to Vancouver with a restricted cargo load.
Air New Zealand has committed to adding a new long-haul route each year, with an announcement due in the first quarter of this year, with San Francisco becoming the first new route for more than a decade in July 2005, followed by Shanghai last year.
CEO Rob Fyfe has previously said he wanted to add direct flights to Vancouver, Johannesburg, Mumbai, Sao Paulo, Santiago, and Beijing and some of these could be developed as one-stop services using the 777, before going non-stop using the longer range Boeing 787-9s which were due to arrive from 2011.
Meanwhile, analysts expect Air New Zealand’s half-year profit, due to be announced on February 27, to confirm a turning point in its financial fortunes, with Forsyth Barr Head of Research Rob Mercer forecasting Air New Zealand to report a half-year operating profit to December of $100 million, up from $73 million in 2005, and a tax-paid profit of $67 million, however, fuel costs of $580 million for the six months compared with $440 million a year earlier, would drive operating costs higher.
Goldman Sachs JB Were head of research Marcus Curley said the second half of the year was expected to be even better as the impact of record fuel prices eased and yields continued to improve, albeit at a slowing rate and he expected an operating profit of $108 million and a 49% gain after tax to $68 million. Revenue would gain 9% from $1.9 billion with operating costs up 7% from $1.56 billion, including a 29% increase in fuel costs.
Average yields were improving largely as a result of the new business class and premium economy seats which was creating strong demand, however, the airline was under pressure to cut fuel surcharges, which would lower yields.
Air New Zealand’s share price reached a record high of $2.19 last week. It closed at $2.04 on Friday.
Report by The Mole
John Alwyn-Jones
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