Hong Kong Airlines pulls out of Auckland dealing blow to travel industry

Hong Kong Airlines used an Airbus A330 on the the Auckland route. Photo / Supplied

Hong Kong Airlines will quit flying to Auckland from near the end of May.

The airline says it is ''making adjustments'' to its business strategy to better respond to market forces and operational conditions.

''Hong Kong Airlines will discontinue its services between Hong Kong and Auckland from May 22,'' said a spokeswoman this afternoon.

The airline will join budget airline Air AsiaX, in pulling out of Auckland this year. That airline quit flying across the Tasman this month and the loss of another carrier will be a blow to travellers as competition is reduced.

Hong Kong Airlines is owned by troubled Chinese conglomerate HNA group and in 2016 expanded its international long haul operations rapidly, flying into Australia as well as this country.

It flew up to seven times a week between Hong Kong and Auckland, adding up to 177,000 seats a year on the route and, according to Auckland Airport, boosted the New Zealand tourist industry by $137 million annually. It was one of seven new airlines that started flying here between 2016 and 2018.

In that time, 14 new routes were opened but there have been no new airlines coming to Auckland during the past 12 months as they battled steeply rising fuel prices and now face a levelling off of demand from international visitors wanting to come here. Last month Air New Zealand sharply revised down its half-year profit forecast, citing a difficult operating environment.

Hong Kong Airlines was also up against long-established Cathay Pacific which has Air New Zealand as a partner on the route.

Auckland Airport said it was disappointed by this decision, as it removed a travel option from passengers to and from Auckland but route was still well served with Air New Zealand and Cathay Pacific flying up to three times a day.

House of Travel's commercial director Brent Thomas said Hong Kong Airlines was a minor player for his company but the competitive landscape was always helped by more airlines in this market.

Hong Kong Airlines said it will offer alternative travel arrangements to passengers who are already booked on its Auckland flights after the service ends, including a free change of travel date to Auckland before May 22 or a full refund to passengers who will travel on or after that date and wish to cancel their trips.

Alternatively, it would offer free change to any destination operated by Hong Kong Airlines or free transfer to other partner carriers.

''Hong Kong Airlines will continue to explore opportunities to launch new destinations in long-haul or short-haul markets,'' she said.

HNA accumulated debts of more than $110 billion after investing in airlines, infrastructure and property. Last year it rapidly unloaded assets to reduce its repayment burden.