Aussies bolster Air New Zealand routes to the Americas

June 07, 2018
Air New Zealand aussies strategy
AirNZ CEO Christopher Luxon. Photo: Steve Creedy

Air New Zealand expects almost a third of passengers on its new Chicago service to be Aussies as it continues to benefit from its strategy of marketing itself as an alternative way of traveling between Australia and the Americas.

The Kiwi carrier over the last five years has expanded its network by 40 percent to include destinations such as Buenos Aries and Houston. It says all its international routes are profitable.

The expansion has been coupled with good growth in Australia in the wake of a strong campaign to convince Australians living in Perth, Adelaide and the eastern seaboard to travel to North and South America via Auckland.

Australians now make up 40 percent of AirNZ’s passengers on the Buenos Aries service and 30 percent to Houston.

“Chicago will work in the same way,’’ chief executive Christopher Luxon told AirlineRatings at the recent International Air transport Association conference in Sydney.

One offshoot of the strategy was the decision to pull out of the trans-Tasman alliance with Virgin Australia from late October and enter a codeshare relationship with Qantas.

READ:  Qantas hops into bed with Air New Zealand.

Luxon said AirNZ’s North American strategy and the growth of the Kiwi airline’s business in Australia had caused tension within the trans-Tasman relationship.

That’s a different strategy to if you’re just running a strategy across the Tasman,’’ he said. “That works at cross purposes to what Virgin might want to do because obviously, they’re  eastern seaboard into North America as well.’’

Luxon also revealed the airline had approached both major Australian airlines about entering into a codeshare deal in domestic Australia after it announced it was ending its trans-Tasman alliance in Australia.

Watch: Air New Zealand’s merry mistake.

He said the airline needed a solution for the 137,000 Air New Zealand customers who travel on from major cities to other destinations in Australia.

“The Qantas deal was just commercially better and just a great customer proposition,’’ he said.  “We get 85 ports, access to all the lounges that we need.

“And obviously it’s a much bigger deal for us in Australia than I’d say for Qantas in New Zealand.’’

Virgin has criticized the deal and has described it as bad news for consumers.

It warned there would be flow-on effects for competition on the Tasman.