Why should an airline take on a loss-leading route just to make money on a route they actually want to fly. There is only one way they should impact this discussion and that is target growth in particular regions to try and make cities a size of critical mass that can handle more air service for profit
There are interesting arguments on both sides of the debate - in particular, some people might argue that in order to grow a smaller region, additional connectivity is necessary. That is to say, if it is easier to get to a destination, more people will invest in, and move to, that destination. On the flip side, other people might say that destinations like TRG are growing enough already without international flights, and so international flights should not be forced upon airlines for the sake of them. IMO, government should have some role to play, if not by compelling airlines to fly to the regions (in exchange for a benefit to the airlines, like sustained access to first-tier cities), then by incentivising them to do so. For example, the Australian and New Zealand governments could co-ordinate with each other, and say to NZ and VA that their alliance can stand for 7 years (instead of 5), if they commit to international flights to 1 regional city, in each of Australia and New Zealand.
Regarding monetary subsidies for flights across Australia and New Zealand, there are various examples, across multiple airlines:
- MI's BME - SIN (not yet commenced
- MI's KTA - SIN (not yet commenced
- NZ's SYD - NLK
- SQ's CBR - WLG
- VA's PER - XCH
A regional New Zealand city might follow the model of BME or KTA - see: https://thewest.com.au/news/pilbara-new ... b88363099z
In addition, even without government support, various 'thin' international routes in the region have proven to be sustainable of late:
- NF's BNE - SON
- NZ's AKL - MCY
- PX's TSV - POM
- VA's BNE - DUD
- VA's PHE - DPS
As one comparison, the Sunshine Coast's population is similar to that of HLZ and TRG combined (and not even including ROT).
In any event, it will be interesting to watch the growth of aviation in regional New Zealand (with or without regulation and subsidies).
If ROT can't work, which has tourism up the wazoo, and ultimately HLZ didn't work, then I don't know where else would
Be careful in writing off routes, just because they did not work several years ago - times change (as NZ's re-entry into the likes of AKL - DPS, AKL - KIX , AKL - SIN and AKL - YVR over the years has shown). In respect of HLZ specifically, since the last HLZ - BNE flight in October 2012, the following factors are relevant:
- Operating outlays have dropped greatly (Brent Crude Oil averaged USD 112 per barrel in 2012, while today, it is about half
that, and is fluctuating at between USD 50 - 60)
- Visitor arrivals to New Zealand grew by 5.4% to ~2.6 million in the 2011/12 financial year, while in the 2016/17 financial year, they grew by a much higher 10.2% to ~3.6 million
- People feel more prosperous, with property prices increasing by 59.9% in Hamilton, by 62.0% in Tauranga, and by 54.0% in Rotorua, between January 2013 and September 2017
The viability of short-haul routes may develop further over the coming years - for example:
- New aircraft will be delivered to Australia and New Zealand, such as 737 MAXs and A320 NEOs, with improved operating efficiencies
- NZ's relationship with VA may sour further, in which case VA might be more willing to expand itself, or TT, further across New Zealand
- Australia and New Zealand may remove border controls, like in the Schengen Area, reducing the need for customs and immigration
See, for example: https://www.ausbt.com.au/qantas-wants-t ... -australia
Could an Saab 340 be used to re-open the AKL-NLK route?
Smaller aircraft still come with higher costs per seats, and the load factor wouldn't have to be very high before the cost was at a point that would be unacceptable for many people
People are prepared to pay higher fares if the destination is unique and/or there are limited alternative options for transport (e.g. CHT).
As such, and with all of this talk about the viability of AKL - NLK on CV, I wonder if CV could launch AKL - LDH on a charter or seasonal basis too, like QF's PQQ - LDH flight? Distance would not be an issue, as AKL - LDH comes in at 974 mi (quite a bit further than AKL - NLK (at 678 mi), but still within the range of the CV 580 and SAAB 340A). In addition, profitability is also not likely to be an issue, as fares on SYD - LDH are regularly more than AUD 1,000 return. Indeed, niche demand to LDH is high, with the island having been awarded "UNESCO World Heritage" status.
AFAIK, there would be two main issues that would be need to be addressed, prior to any such AKL - LDH service on CV being launched:
1. Airport facilities
QF use a Dash 8-200 to LDH, as it is the only aircraft in the QF fleet that can serve LDH, due to the size and nature of LDH's runway (which is 846 m in length). An AUD 8 million upgrade to the LDH airport runway was opened in 2015, which mainly addressed drainage and sealing, but not the size and nature of the runway. However, with QF likely to retire the Dash 8-200 in the future (as QF transitions to the Dash 8-400), the NSW Government in May 2017 committed AUD 450,000 for a feasibility study to investigate the extension of the runway at LDH. It is highly likely that the runway will get extended, and if it is extended to accommodate the Dash 8-400, it will need to be 1,250 - 1,400 m in length. Please correct me if I am wrong, but I believe that the CV 580 and SAAB 340A have broadly equivalent runway length requirements to this, for take-off. These figures can obviously be reduced with restrictions on passengers and weight allowances. Therefore, with any runway extension at LDH, CV's fleet would be able to perform AKL - LDH sufficiently.
Separate to runway length, there is an issue on customs and immigration, with AKL - LDH being an international flight. I do not see this as an issue. A number of other airports support, or have supported, only one international flight (e.g. BME, NLK, PHE and TSV), and maintain the necessary border facilities to do so. Indeed, BME is likely going to support "three to four return [international] flights" to SIN (on MI), on a trial basis - why can LDH not do the same, in respect of AKL? The relevant personnel could be flown in, on an ad-hoc basis. Notably, the terminal at LDH is currently being upgraded to provide more space, which would further facilitate ad-hoc immigration checks. If the cost of providing these immigration checks is an issue, then that could be added within the price of any flight ticket or holiday package - indeed, fares to LDH are already high, and travelers to LDH are not likely to be price-conscious. Going forward, Australia and New Zealand may scrap border checks, like in the Schengen Area, which would solve the issue altogether.
2. Tourism capacity
There are approximately 400 residents on LDH, and tourism is the major industry and source of income on the island. Over 15,000 people visit LDH each year, and there are 18 accommodation lodges. However, only 400 tourists are permitted to visit LDH at any one time. Importantly, tourism to LDH is seasonal - for example, QF runs a seasonal PQQ - LDH service, weekly, from February to June, and from September to December. This creates a window for any AKL - LDH charter or seasonal service to be arranged, ensuring that accommodation would be available for New Zealand tourists (i.e. the AKL - LDH service could run in January, when the PQQ - LDH service is not running). In addition, given that local residents rely almost exclusively on tourism for their livelihood, I am sure that the Lord Howe Island Board as well as the NSW Government would be willing to enter into discussions with CV as to the possibility of tourism opportunities from New Zealand, if not to openly facilitate and support such an operation.
Here are some photos of LDH, to inspire you: