Post by flyjoe180 on Nov 2, 2007 9:38:50 GMT 12
Air New Zealand is flying fresh salmon to Canada today, highlighting the business opportunities created by its inaugural non-stop service to Vancouver.
But analysts say the success of the airline's longest longhaul flight -- it is 14 hours -- depends on filling the 269 Pacific Economy seats on the Boeing 777-200ER aircraft with tourists.
"I'm a skier, I'd be interested," said Peter Harbison, the Australian-based executive chairman of the Centre for Asia Pacific Aviation.
This is music to Air New Zealand's ears because the airline is betting Australians will fly with it because Qantas doesn't fly non-stop to Vancouver.
"The fact that Air New Zealand is talking about addressing the Australian market suggests they believe it is a bit of a gap in Qantas's armour," Harbison said.
More than 10 percent of the northbound passengers who have booked so far were from Australia, said Air New Zealand's group general manager international airline Ed Sims.
The route is a risk because high fuel prices make the economics of long haul more challenging.
But the risk is mitigated by a relationship with Air Canada that reduces direct competition.
A code share puts Canadians on Air New Zealand aircraft and New Zealanders can fly onto Europe on Air Canada with a short stop in Vancouver.
Non-stop services and point-to-point travel, rather than through a hub, is the current trend in travel.
The challenge for airlines is to increase the chances of getting a sleep on the plane. On very long flights there is talk of areas to stand in to make flights more social.
"The market wants direct flying these days. Ninety percent of travellers say they are not looking for stopovers, they want to get to their destination on the same aircraft as quickly as they possibly can," Sims said.
But this service is a punt. The flight from Auckland to Vancouver is 13 hours and 45 minutes, and on the way back it is 14 hours 30 minutes.
Harbison said he is 192cm tall and Australian non-stop flights to the western United States in economy for someone of his height are a similar length and "a cow".
Ultra-long-haul flights like the 18-hour long flight Singapore Airlines operates between Singapore and New York are premium products pitched at business travellers, but Auckland is not a major business destination.
"New Zealand hasn't got a huge inbound corporate market. Seventy percent of inbound passengers are tourists," Sims said. "You can't justify an all-business class configuration on an aircraft".
So the aircraft flying Auckland to Vancouver has 313 seats of which 18 are Pacific Premium Economy, with a 39 inch seat pitch and business class food and wine, and 26 are Business Premier with the lie-flat bed. The rest are Pacific Economy.
There are signs that some tourists are upgrading to premium economy for the long flight.
There is a time saving for all though because before the non-stop flight the journey was 20 hours, stopping in either Los Angeles or San Francisco.
Harbison said the success of the low-yield tourist route to Vancouver will depend on getting high load factors.
The peak months are expected to be December and January.
Bookings are indicating load factors in the high 70s for these months, which is likely to be mid-80s by the time they operate, Sims said. They are levels he is happy with.
"To be honest we haven't really discounted because we haven't needed to," he said.
Travel can be about a search for the exotic, but this time the journey is between two destinations perceived as attractive for their safety and beauty. The contrast comes from the seasons.
Australasians can ski and snowboard in their summer and Canadians can hike, bike and kayak in their winter.
It is rare to have a passenger route balanced with demand both ways, Sims said.
The belly of the aircraft will carry out-of-season produce between the markets and demand has been good.
The airline has already announced it will operate the three-day-a-week service year-round instead of seasonally.
Usually a new route loses money in the first year because of startup costs, breaks even in the second and makes a profit in the third.
"I would say we would move ahead of that," Sims said.
Air New Zealand spent a long time negotiating with Air Canada and the Canadians are not flying directly into New Zealand.
"I'd say our relationship with Air Canada is one of the strongest relationships we have in the Star Alliance," Sims said.
Even longer longhaul flights will be possible when the Boeing 787-9 aircraft Air New Zealand has ordered arrive.
Then Air New Zealand will be capable of flying non-stop to destinations like Mumbai, Denver, Chicago or Buenos Aries.
NZPA
But analysts say the success of the airline's longest longhaul flight -- it is 14 hours -- depends on filling the 269 Pacific Economy seats on the Boeing 777-200ER aircraft with tourists.
"I'm a skier, I'd be interested," said Peter Harbison, the Australian-based executive chairman of the Centre for Asia Pacific Aviation.
This is music to Air New Zealand's ears because the airline is betting Australians will fly with it because Qantas doesn't fly non-stop to Vancouver.
"The fact that Air New Zealand is talking about addressing the Australian market suggests they believe it is a bit of a gap in Qantas's armour," Harbison said.
More than 10 percent of the northbound passengers who have booked so far were from Australia, said Air New Zealand's group general manager international airline Ed Sims.
The route is a risk because high fuel prices make the economics of long haul more challenging.
But the risk is mitigated by a relationship with Air Canada that reduces direct competition.
A code share puts Canadians on Air New Zealand aircraft and New Zealanders can fly onto Europe on Air Canada with a short stop in Vancouver.
Non-stop services and point-to-point travel, rather than through a hub, is the current trend in travel.
The challenge for airlines is to increase the chances of getting a sleep on the plane. On very long flights there is talk of areas to stand in to make flights more social.
"The market wants direct flying these days. Ninety percent of travellers say they are not looking for stopovers, they want to get to their destination on the same aircraft as quickly as they possibly can," Sims said.
But this service is a punt. The flight from Auckland to Vancouver is 13 hours and 45 minutes, and on the way back it is 14 hours 30 minutes.
Harbison said he is 192cm tall and Australian non-stop flights to the western United States in economy for someone of his height are a similar length and "a cow".
Ultra-long-haul flights like the 18-hour long flight Singapore Airlines operates between Singapore and New York are premium products pitched at business travellers, but Auckland is not a major business destination.
"New Zealand hasn't got a huge inbound corporate market. Seventy percent of inbound passengers are tourists," Sims said. "You can't justify an all-business class configuration on an aircraft".
So the aircraft flying Auckland to Vancouver has 313 seats of which 18 are Pacific Premium Economy, with a 39 inch seat pitch and business class food and wine, and 26 are Business Premier with the lie-flat bed. The rest are Pacific Economy.
There are signs that some tourists are upgrading to premium economy for the long flight.
There is a time saving for all though because before the non-stop flight the journey was 20 hours, stopping in either Los Angeles or San Francisco.
Harbison said the success of the low-yield tourist route to Vancouver will depend on getting high load factors.
The peak months are expected to be December and January.
Bookings are indicating load factors in the high 70s for these months, which is likely to be mid-80s by the time they operate, Sims said. They are levels he is happy with.
"To be honest we haven't really discounted because we haven't needed to," he said.
Travel can be about a search for the exotic, but this time the journey is between two destinations perceived as attractive for their safety and beauty. The contrast comes from the seasons.
Australasians can ski and snowboard in their summer and Canadians can hike, bike and kayak in their winter.
It is rare to have a passenger route balanced with demand both ways, Sims said.
The belly of the aircraft will carry out-of-season produce between the markets and demand has been good.
The airline has already announced it will operate the three-day-a-week service year-round instead of seasonally.
Usually a new route loses money in the first year because of startup costs, breaks even in the second and makes a profit in the third.
"I would say we would move ahead of that," Sims said.
Air New Zealand spent a long time negotiating with Air Canada and the Canadians are not flying directly into New Zealand.
"I'd say our relationship with Air Canada is one of the strongest relationships we have in the Star Alliance," Sims said.
Even longer longhaul flights will be possible when the Boeing 787-9 aircraft Air New Zealand has ordered arrive.
Then Air New Zealand will be capable of flying non-stop to destinations like Mumbai, Denver, Chicago or Buenos Aries.
NZPA
