New Zealand officials say they are working on an open skies agreement with China after boosting the capacity available to Chinese carriers by 20 per cent.
The move to increase the cap on Chinese services to 59 a week aims to help tourism-oriented New Zealand capitalise on the growing appetite for travel among mainland Chinese but stops short of the move by neighbour Australia to remove capacity restrictions.
However, the New Zealanders have the potential to expand the agreement later this year and NZ Tourism Minister Simon Bridges said the government was continuing to work towards an open skies agreement with China.
“We’ve seen strong growth with visitors from China and we expect this to continue,’’ Bridges said in a statement. “China is our second largest source of visitors after Australia, so it’s important that we have the appropriate agreements in place to support this.
“The amendment will also allow additional airlines to enter the market, ensuring a competitive environment that will benefit New Zealand and Chinese travellers.’’
New Zealand has gradually expanded the services available to Chinese airlines from 42 per week in 2014 to 49 in 2016 as Chinese tourism last year grew 12 per cent to 421,000 visitors.
Five Chinese airlines currently operate to New Zealand and a sixth, Sichuan Airlines, will enter the market in June.
“New Zealand is committed to liberalising air services, allowing for competitive markets, increased air traffic, lower air fares and stronger international trade links,” Bridges said.
Air New Zealand declined to comment on the potential for increased competition from more low-fare Chinese carriers.
AirNZ operates its own daily flights from Auckland to Shanghai and Hong Kong. It also codeshares to Beijing with alliance partner Air China and it is seeking regulatory approval to extend its agreement with Hong Kong-based Cathay Pacific.
The Kiwi carrier reported in February that increased international competition had contributed to a 24 per cent dive in first-half profits and said its full-year pre-tax result would also be lower.
It now expects to record pre-tax earnings for the full financial year of between $NZ475m and $NZ525m, compared to $NZ663m in 2015-16.
