I have my doubts about the claims that the airline is losing $1 million per week on its long-haul network.
There are effectively six different long-haul markets for Air New Zealand, as follows:
1) North American services, with high purchase levels of Business and Premium Economy tickets, and relatively high numbers of Star Alliance frequent flyers. Volumes static, yields stable.
2) UK services, with a similar profile to North American services. Volumes static and yields stable via LAX
, both declining via HKG
3) Japan services, with lower Premium Economy sales and Star Alliance flyers. Volumes declining, yields stable.
4) China services, with predominantly wholesaled Discount Economy ticket sales. Volumes growing, yields stable but very low.
5) Hong Kong services: Auckland stable in terms of yields and volumes, London shrinking in both.
-PPT and LAX
-RAR. Volumes and yields static for RAR and PPT, volumes and yields growing for HNL
These are six distinct markets, and I am troubled at the prospect of a one-size-fits-all Seats 2 Suit-style "solution".
My preference still would be to see the China services and possibly Japan too operated by a subsidiary with a completely different business model to the North American routes.
As an Australia-based HVC, my options are different to those of passengers in a quasi-monopoly situation in New Zealand. If I'm utterly frank, the last things keeping me loyal to Air New Zealand are my annual Gold Elite upgrades (which I use on an extra family vacation where we pay PE
and fly BP
) and the ability to earn lots of status points on flights to HNL
and PPT in Business class.
The tipping point for me to move more business than I already have to Virgin Australia and Qantas feels as if it is getting closer, and funnily enough having several years of banked Gold Elite is actually making me more not less inclined to fly on those carriers when they have more to offer me.
I've been flying Air New Zealand long-haul for over 30 years, and feel a strong connection to them. But I am tiring of the poor business decisions that the management continue to make.
Fot the last five years I have been arguing that they should be using 77E or 77L aircraft on BNE
. And I keep hearing "no, long-haul is doing fine, we can just shrink and survive the global financial crisis." And I have kept questioning how on earth anyone can make a profit with a market of inbound Economy Class package tourists from China.
And I have an awful nagging feeling that I was right all along.
And on the subject of Australia-USA services, Air NZ
is now a cornerstone investor in Virgin Australia. And I cannot see how Virgin Australia can do better out of its DL
alliance across the Pacific than it would with Air NZ