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Air NZ’s Luxon: Buenos Aires exceeds expectations, more Pacific Rim destinations to follow
December 11th 2015
Speaking to This Week in Asia-Pacific Aviation at the Star Alliance chief executive meeting in Chicago, Air New Zealand (Air NZ) chief executive, Christopher Luxon, said the flag carrier was “very much on track to deliver phenomenal results again this year”, noting its significant $400 million half-year figures. Read More »
Luxon said Air NZ was well-positioned for 2016 and ready to win more market share in Australia to connect onto its long-haul network, which is forecast to grow 15% next year. He said he was looking forward to receiving the first seven A321neos, out of a 13-aircraft-strong A320 Family order placed in June 2014, “to better serve Australia with more frequencies”.
“To be honest, I’m not so worried about the recent Qantas Airways-American Airlines (AA) tie-up,” Luxon said. “It’s actually very good for us from a market stimulation perspective. It will create traffic between Australia and America, and New Zealand and America,” he continued, and noted that whether or not their aircraft were configured “in the right way” for such a leisure-heavy market remained to be seen. “What I don’t understand really is why American has launched Sydney to L.A.," Luxon commented.
“It looks like Qantas encouraged American to come to New Zealand and American said ‘OK, we’ll go to Sydney too then, cause we’re not there’. As a result, Qantas was kicked off there and re-launched service to San Francisco again, which also does not make a lot of sense because American does not have a hub there.”
From December 18, Qantas will gradually reduce Sydney-Los Angeles from double-daily to ten-weekly. Also, its three times a week B747 service between Melbourne and Los Angeles will be trimmed to two flights weekly.
Air NZ launched services to Buenos Aires, the industry’s first approved 330-minute extended operations (ETOPS), and Houston last week. “Buenos Aires is exceeding expectations, especially considering the amount of Australians on board,” Luxon said. “Connectivity between Australasia and South America remained “very poor”, so Air NZ is looking to launch additional destinations in the Pacific Rim, rather than China, because its alliance with Air China “is getting the job done there”, said Luxon. The carrier is definitely not looking to add a destination in Europe as its partnerships, notably with Singapore Airlines, were taking care of that region.
Air NZ is considering closing its own revenue sharing deal with partner, United Airlines, to “extract the gold sitting in the U.S.”, with reference to the 30 million people who have been polled to say they wanted to visit Australia and New Zealand before they die.
On belly capacity, Air NZ appears to be breaking with the industry trend of declining yields and unprofitability. “Our cargo business is doing exceptionally well,” Luxon said, “with the last four years’ double-digit growth continuing into 2016.”
