American Airlines has been scouting the New Zealand market this year with alliance partner Qantas. Photo / Supplied
American Airlines has been scouting the New Zealand market this year with alliance partner Qantas. Photo / Supplied
Cheaper, more fuel-efficient planes — and solid partner — give US airline confidence in future for new NZ route
American Airlines is confident it can do what other carriers from the US have not - stay in New Zealand for the long haul.
The airline's chief executive Doug Parker said he had been told US airlines couldn't make the transpacific work.
"It may have been the case in the past but it is not the case in this situation."
Parker, whose airline is the world's biggest by number of passengers carried, said the market was much bigger than when other US carriers were flying into Auckland direct from the US.
Doug Parker expects the transpacific route to work for the airline. Photo / Supplied
American Airlines flew here briefly in the 1970s, Continental has been here and United pulled out in 2003.
Air New Zealand chief executive Christopher Luxon tilted at the revolving roster of US carriers, saying yesterday the key was sustainability.
Parker said he expected most of his airline's passengers would originate in the US where there had been double digit growth to New Zealand in the past couple of years.
American's fuel efficient Boeing 787-8 Dreamliner was also the right aircraft for the route, capable of carrying 226 passengers, including 28 in a premium cabin with lie flat beds.
"Other planes carriers have flown in the past were much more costly, much less fuel efficient and that makes a big difference," he said.
The deepening commercial relationship with Qantas was also essential.
He said without the Australian airline, American would not be entering the market.
American, which emerged from bankruptcy two years ago and is now making record quarterly profits, had better connectivity at both ends of the route than earlier US carriers. It had built up its Los Angeles hub, linking to 150 destinations in the United States and will have access to 70 centres in Australia and New Zealand through Qantas and Jetstar's network.
Illustrator / Rod Emmerson
"We're confident it's going to work. This is not an experiment, this is not a developmental route, this is a route we think will work for us once we've started it," said Parker.
The Tourism Industry Association says the new service will benefit all of New Zealand.
"This new Los Angeles-Auckland service will grow the valuable US visitor market and encourage American travellers to see more of New Zealand by offering connections with JetStar's growing regional network," said association chief executive Chris Roberts.
The US market is growing at 11 per cent a year, with 237,000 visitors arriving in the past year.
Their total spending has grown by an estimated 39 per cent to $967 million a year.
Auckland Airport estimates that the new American Airlines daily service will boost seat capacity between New Zealand and the US by 16 per cent, adding 165,000 seats a year and contributing $199 million annually to the New Zealand economy.
Qantas chief executive Alan Joyce said the transpacific flights were a missing part of the Qantas group network in New Zealand. Subsidiary Jetstar was just about to start regional services here and made the group a contender for government contracts here.
"This makes us competitive - this adds to the whole network, the whole proposition," he said.
Joyce said the falling value of the kiwi against the US currency would not necessarily harm bookings from this country.
"We're finding that Australians are still making those trips [to the US]. They're just spending less on the ground and we take it's the same with Kiwis"
Luxon said Air New Zealand had been expecting competition on the route and stimulation of the market would help the entire tourism sector.
The New Zealand airline's shares have fallen since news of American's entry into the market and closed yesterday down 2.6 per cent at $2.65.
