United's exit a plus for Air NZ

By CHRIS DANIELS aviation writer

The departure of US airline giant United from our skies is prompting Air New Zealand planners to re-think their schedules for the traditional quiet winter months.

Air New Zealand moved up to a twice-daily US service in November.

United makes its last flight at the end of March, when Air New Zealand had been planning to cut back its service during the Northern Hemisphere summer.

United's passengers, who will now mostly fly with Air New Zealand since it is also in the Star Alliance, may provide our national carrier with enough additional passengers to justify an expanded schedule during our winter months.

Alasdair Thompson, chief executive of the Employers and Manufacturers Association (Northern) said the departure of United was a timely reminder that market competition could lead to both cuts and expansion of capacity.

While Air New Zealand and Qantas would get some benefit from the withdrawal of a competitor, Thompson said other carriers, such as American Airlines or British Airways, could enter the US leg to capture some of United's freight and passenger business.

One airline industry executive told the Business Herald that the entry of any new airline, such as Singapore Airlines, British Airways or American Airlines, would be extremely unlikely even in the medium term.

Airlines planned their routes and possible expansion into new areas years in advance. To quickly move into any new area would mean the re-allocation of aircraft, aircrew and the redeployment of other infrastructure.

Qantas chief financial officer Peter Gregg told the Australian newspaper that United's decision to stop flying between the US and New Zealand was driven by commercial reasons rather than competitive pressure.

"United Airlines said its Auckland flight had suffered from falling passenger numbers and lower fares that made its services unprofitable," Gregg said.

"This is the reality. Everyone should be wary of trying to socially engineer an artificial competitive outcome in the face of this reality."

Air New Zealand has just announced it would next week be expanding its code-sharing relationship with Air Canada.

This would mean that Air New Zealand will sell seats on Air Canada flights from Los Angeles to Calgary and Montreal, as well as the airline's services that connect Los Angeles with Vancouver and Toronto.

Air New Zealand's senior vice-president of sales and distribution, Norm Thompson, said New Zealand had become increasingly popular as a tourist destination for Canadians.

In the 12 months to July last year, about 37,500 Canadians visited New Zealand, a 7 per cent increase on the year before.