Post by Dave Homewood on Nov 23, 2006 22:05:35 GMT 12
www.nbr.co.nz/home/column_article.asp?id=16795&cid=4&cname=Business+Today
Air NZ reductions on Tasman route
11 percent capacity drop after codeshare refusal
Air NZ's Tasman cuts
Air New Zealand [NZX:AIR] will reduce seats on its Tasman routes by 11 percent from April to October next year.
Compared with the same period this year the number of seats available between Wellington and Australia will fall by 15 percent, Dunedin 28 percent, Palmerston North 15 percent and Christchurch 7 percent.
The decision follows the rejection of Air NZ and Qantas's codeshare proposal by the Australian equivalent of the Commerce Commission.
Group general manager shorthaul airline Norm Thompson says low airfares generated by excess capacity and competition did not drive enough customer demand to maintain the schedule as it was.
"The Tasman is one of the most brutal aviation markets in the world and all carriers struggle to make an adequate return on their investment."
He says low-season load factors for Wellington flights averaged a "commercially unsustainable" 63 percent.
But he says Air New Zealand will still have more capacity on the Tasman routes than its competitors. "We are determined to grow demand but not at the expense of destroying shareholder value," he says.
23-Nov-2006
Air NZ reductions on Tasman route
11 percent capacity drop after codeshare refusal
Air NZ's Tasman cuts
Air New Zealand [NZX:AIR] will reduce seats on its Tasman routes by 11 percent from April to October next year.
Compared with the same period this year the number of seats available between Wellington and Australia will fall by 15 percent, Dunedin 28 percent, Palmerston North 15 percent and Christchurch 7 percent.
The decision follows the rejection of Air NZ and Qantas's codeshare proposal by the Australian equivalent of the Commerce Commission.
Group general manager shorthaul airline Norm Thompson says low airfares generated by excess capacity and competition did not drive enough customer demand to maintain the schedule as it was.
"The Tasman is one of the most brutal aviation markets in the world and all carriers struggle to make an adequate return on their investment."
He says low-season load factors for Wellington flights averaged a "commercially unsustainable" 63 percent.
But he says Air New Zealand will still have more capacity on the Tasman routes than its competitors. "We are determined to grow demand but not at the expense of destroying shareholder value," he says.
23-Nov-2006
