Air New Zealand's mixed numbers

The airline’s long, short haul and domestic passenger numbers have all risen. But amid this good news, Air New Zealand’s Asian business has stumbled.

Kiwis can fly. Or at least take an Air New Zealand flight.

In the 11 months to May 31, the airline’s group wide load factor, essentially the percentage of seats it fills on average, was up 2%, year-on-year, to 81.7%. Air New Zealand carried 960,000 people in the 11 months to May this year, a 5.6% increase from 910,000 in the 11 months to May 2012. The airline’s long, short haul and domestic passenger numbers have all risen.

But amid this good news, Air New Zealand’s Asian business has stumbled. Passenger numbers are down to 33,000 on routes to Asia, Japan and the UK in the 11 months to May this year, a 19% drop from the same period last year when passenger numbers reached 41,000. Revenue per passenger kilometres on these routes are down more than a fifth. That’s a worrying sign. China is New Zealand’s largest trading partner.

Air New Zealand blames the drop on passenger numbers on its decision to cancel the Hong Kong-London route and the unfamiliarity of a new route to Shanghai. That’s an odd explanation. Shanghai is the financial and business capital of the world’s second-largest economy. Perhaps many antipodeans still do business in China by going to Hong Kong. Air New Zealand is not looking at the China market as a method to carry Kiwis there as much as an opportunity to carry Chinese tourists who want to travel.

Air New Zealand’s 10 new Boeing 787-9s will predominately fly to Shanghai and Tokyo. Adding a flight to Beijing may not be bad idea if the airline wants to cash in on newly enriched Chinese with a thirst for foreign adventure. Air New Zealand’s revamp of its business class and economy class sections may not be a bad idea if it is to appeal to the sheep farmers, loggers and wealthy Chinese who fly back and forth from the middle kingdom and the land of the long white cloud.

At 1236 New Zealand standard time, Air New Zealand’s New Zealand shares were unchanged at $1.45. The company’s Australian shares at 1036 AEST had fallen 1 cent, or 0.8%, to $1.21. 

The S&P/ASX200 Index was down 7.644, or 0.2%, to 4661.50. The New Zealand Exchange 50 Gross Index had fallen 10.237, or 0.2%, to 4353.808.

Related Articles