Cutback in Trans-Tasman seats helps Air New Zealand
A report in Business Day says that a cutback in flights to reduce the number of empty seats on trans-Tasman flights has helped Air New Zealand fend off growing competition on routes between its home base and Australia.
With low-cost rivals and international carriers eating into its market share, the airline decided this year to reduce services, boosting passenger load factors by just over 9 per cent last month, compared with this time last year.
Air NZ reported that it filled 75.3 per cent of its seats on its Tasman and Pacific island routes in June. That compares with just 66.2 per cent of seats filled during the same period last year.
There has been intense competition on the trans-Tasman route with Virgin Blue, Pacific Blue and Emirates increasing capacity in recent years.
The improved results weren’t limited to trans-Tasman operations. On domestic flights load factors rose 2.7 per cent, while on its long-distance flights to Asia, Britain and North America, 80 per cent of seats were filled.
The decrease in empty seats has helped improve the group’s overall performance which had been lagging behind 2006 until recently.
It helped push the airlines’ shares up 10c to $2.34 yesterday.
The airline is due to report its annual results for the last financial year at the end of next month, having seen an increase of almost 5 per cent in the number of passengers carried to 12.48 million.
The report comes as the airline is involved in an increasingly bitter battle with the operators of its main base at Auckland International Airport over higher landing charges.
Air New Zealand yesterday claimed the fees would rise more than 13 per cent during the next five years and had been forced on the airline without agreement. It was seeking a judicial review of the move. The airline accused the airport operators, the subject of a takeover bid from the state-backed Dubai Aerospace Enterprise, of abusing its monopoly position.
“While Auckland International is disguising the size of the increases, this ignores the fact that continued volume growth at the airport supports the case for a reduction in charges per passenger,” the airline’s finance director, Rob McDonald, said yesterday.
Airport management confirmed it had received details of the airline’s legal move but rejected its argument, saying there had been three years of consultation about the fee increases.
The airport’s chief executive, Don Huse, said the charges reflected $500 million of investment under way at the airport. Shares in the company rose 2c to $2.99 despite news of the dispute.
Report by The Mole
John Alwyn-Jones
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