|Quoting CHCalfonzo (Reply 66):|
Sorry to burst your bubble, but the argument against one stop services from NZ/AUS for locally based carriers is absolutely valid. The advantage for carriers based in the middle east/Asia is clear. They can offer 1 stop flights to a much greater range of destinations with much greater scale than any Pacific or European carrier could EVER economically justify. Simple as that.
Operating two sectors with a wide ranging feed from either end generates a descent yield which will always be more economically viable than operating a one stop flight from one end of the Earth to the other with a limited connecting feed. Take CHC as the perfect example... SQ can operate profitable NZ-Europe flights from here but NZ can not. It is no secret why. Case closed. Get over it. You can spend as much as you like on an NZ ticket NZ-LHR and they will barely make money off you without the niche high yield feed from NZ-LA and LA-LHR and vice versa. The position NZ has on the LA-LHR market is a 1 in a million opportunity, good luck, but not something to go running to the bank waving wads of cash over. Every local carrier has a natural parochial local advantage over NZ in this market.
Making the argument that NZ could more effectively serve Europe by competing with North American carriers on one-stop services is as absurd as them competing with Asian carriers on one-stop services. It is simply not economic, no-matter which direction you go, East or West! NZ (and QF/VA for that matter) have arrived at the same conclusion, Europe is too far away to serve directly these days. This is the mirror image of the conclusion the majority of European carriers came to a long time ago. The far far East is too far away, with too sparse a population to justify serving with expensive one-stop services. The yield simply isn't there.
There are so many invalid inferences in this post that I hardly know where to start.
Firstly, you fail to acknowledge that the ME3 have far greater fuel burn because one of their sectors is ULH and their route is longer in the first place.
Secondly, the key argument against 1-stop flying is the need to carry two sets of costs in terms of fuel and crewing costs and landing fees on a fare which often isn't that much bigger than for a 1-sector flight. But that is the ME3's entire market and business model. There are not hordes of people wanting to go to the propped-up-by-Abu-Dhabi basketcase which is Dubai. Emirates, Etihad and Qatar Airways are splitting revenue and carrying costs on almost every fare that they sell across 2 sectors. And by definition they are for Australia and for New Zealand it is often 3 sectors not 2.
And what is more, when Air NZ
they are combining through fares with relatively high-yielding AKL
But on Dubai-Europe Emirates have no such good fortune. They are combining the market with the comedy yields that they carry for underprivileged subcontinental immigrants doing VFR travel to the Indian subcontinent.
So talk of Air NZ
having an inbuilt competitive disadvantage against Emirates to the UK is utterly untrue. It's precisely the opposite - Emirates has an inbuilt competitive disadvantage against Air New Zealand on such a route.
Thirdly, you fail to see that the advantage of a mid-line hub is in terms of being able to feed multiple origins and destinations. But Air NZ
doesn't need to feed Venice or Hamburg or Oslo - its European market is mainly Britain and Ireland.
Fourthly, you make no allowance for the economic frailty of both New Zealand and 99% of the potential Asian destinations.
The first world countries whose carriers can happily restrict themselves to non-stop single sector flying by and large
a) Don't have a population of 4.5 million, and
b) Don't languish in 32nd place in the list of nations by GDP per capita, and
c) Don't exist in a location where most untapped potential future single-sector destinations are poor and have minimal business or tourism links to themselves.
And the NZ economic reality is just one end of the problem.
More to the point, the Pacific Rim countries which are potential destinations are in even worse shape, and increasingly are defined by narrowbody LCC aviation markets.
Japan has the best combination of wealth and population volume, but has had a struggling economy for donkey's years and is now itself languishing in 27th place in terms of GDP per capita. Three of the four Japanese markets that Air NZ has tried have failed. Meanwhile China is below the world average in 89th position and Indonesia is in 101st position.
Non-stop flying is great.
But not when you are connecting "extremely small and not very wealthy" with "large and poor".
Even Air NZ
has acknowledged that with the "almost-LCC" fit out of the 787-9 fleet.
My opinion is that Air NZ
is lucky to be allowed the monopolies that it has, and good luck to them.
But they should also remember the issue that goes right back to the bungled 1994 single aviation market with Australia - the only thing that adds scale and wealth to Air New Zealand's home market is Australia.
And apologies for calling the BS
about 2-sector flying so stridently. I read this nonsense almost every day, and I can't ignore the blatant falsehood in the case of Air NZ
forever. It is just absolute rubbish.
[Edited 2015-02-06 19:59:37]