Air New Zealand cuts deeper into its domestic schedule as demand flatlines

Air New Zealand is facing softer domestic demand. Photo / Michael Craig

Domestic passengers on some Air New Zealand flights may face more disruption next year as the airline cuts back on its schedule.

The airline is finalising which flights will be cut, but said today about 2% of its schedule will be affected between February and June next year.

In October, it also announced cuts to some routes. Air New Zealand has faced flak for high fares, especially to the regions, and while reduced capacity typically leads to higher prices, it says this is not the aim of the latest cuts.

“These changes are not being made to raise revenue. We continuously review our fares and make adjustments as required, especially amid ongoing increases to our cost base,” said a spokeswoman.

Air New Zealand – 51% owned by taxpayers – said today it constantly reviews its network to ensure it is responding to market dynamics.

“Domestic flying continues to be impacted by softer demand, particularly across corporate and Government customers, and at the same time, operating costs continue to rise. This environment has led to today’s announcement to make some small changes in the areas most impacted by less flying.”

The cuts don’t relate to engine issues it faces with its domestic A320/21 jets.

Air New Zealand domestic general manager Scott Carr said the airline has been responding to the weak domestic economy for a number of months.

Wellington will see the largest changes to the flying schedule, reflecting the softened demand for flights in and out of the capital, which has been badly hit by the cut-back in spending by Government departments and agencies amid a prolonged economic slowdown.

“Like other airlines in Aotearoa, our domestic business continues to be impacted by challenging conditions, including high operating costs and soft domestic demand, particularly across corporate and Government customers. As a result, we’ve made some changes to our services in the areas where we are seeing the most impact from less flying.”

The airline said it would work with everyone impacted to rebook their travel plans. In early October, Air NZ said it was making changes to four domestic routes and reducing capacity to three of them, affecting Queenstown, Christchurch, Wellington, Dunedin, Blenheim and New Plymouth.

The airline said then it will stop direct flights between Wellington and Invercargill next January because of a decline in domestic demand “in response to a tough economic backdrop”.

However, a reduced network will help build up reliability, which has been under fire from some passengers in the regions.

“These reductions not only allow us to more appropriately respond to the level of demand we are experiencing, but they also give the airline a small amount of resilience to improve recovery options in the event of a flight disruption on our regional network,‘’ said Carr.

The airline would continue to monitor domestic demand and review the schedule from July onwards closer to the time.

Customers with flights on these routes between February and June 2025 will be contacted directly with alternative options if their flight has been impacted.

Passengers don’t need to contact Air NZ proactively.

The airline flies to 20 domestic destinations, with its 400 daily flights serving 11 million passengers a year.

It has also cut back on some international flights as it continues to face engine maintenance issues with its Boeing 787 Dreamliners.

In a profit update last week, Air NZ said softer domestic demand had contributed to a cut in its earnings in the current half-year.

Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.