NZ ditches London [Archive]

tartare

22nd Oct 2019, 21:40

Breaking this morning.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12278900
Long debated when I worked there - the Board then were too fearful to do it because of public backlash and sentiment - now they have.
Momentous decision and one that will fundamentally reshape Air New Zealand.

ElZilcho

22nd Oct 2019, 22:15

Disappointed to say the least.

The Company has quoted less than 7% of travelers between NZ and Europe go with us via LAX... Had LAX given us access to a terminal with Transit facilities perhaps it would of been more popular, but having to clear Customs, uplift your bags and re-checkin to LHR I can see why pax avoided it. J Class is virtually always full across the Atlantic as we could uplift in LAX.

Perhaps we shouldn't of abandoned LHR via HKG and put all our faith into LAX. If the ME Carriers every withdraw from Auckland the suits might regret the decision. Who knows.

dragon man

22nd Oct 2019, 22:31

I don’t know what ANZ rights from HKG to London were however in the case of Qantas we were restricted to a maximum of 50% uplift of pax’s from HKG the rest had to be from the original departure airport.

ElZilcho

22nd Oct 2019, 22:58

I suspect we would of been similar, was before my time so not sure of the specifics but I gather it was extremely difficult to make a profit due to competing with the Asian Carriers and (most likely) their restrictions on uplifts... a problem we don't have in LAX.

tartare

22nd Oct 2019, 23:48

I can't remember the exact figures - but I do remember back in the day (little Robbie Fyfe era) that AKL-LAX was the only profitable sector on the entire international network in my time.
The rest...
I know back then most kiwis would have been shocked to know how important a contribution Fortress New Zealand (an Air NZ insiders term) domestic routes made contribution wise to Group EBITDA.

kiwi grey

23rd Oct 2019, 02:44

Disappointed to say the least.
... Had LAX given us access to a terminal with Transit facilities perhaps it would of been more popular, but having to clear Customs, uplift your bags and re-checkin to LHR I can see why pax avoided it.

I thought that was against the USA rules?
As I understand it, the Americans don't recognise "transit" as a non-entering situation. Even if you're coming to and going from the same gate, you have to be subjected to the world's friendliest TSA 'welcome'.

My former employer had a policy of 'only go to the USA if you're going there': if you're going somewhere else choose a non-USA routing even if it's more expensive. :eek:

Peter47

23rd Oct 2019, 03:36

Did the 50% of QF pax at HKG originating in Oz include stopovers? I wouldn't have thought that it wouldn't be a problem if it did. I suspect that CX carries a lot of sixth freedom traffic so something to bargain with.

Ken Borough

23rd Oct 2019, 07:00

I suspect that CX carries a lot of sixth freedom traffic so something to bargain with.

They do, indeed, and had some very sharp fares in the Oz marketplace for travel to the UK and Europe. I can point to quite a few people who have used CX to the UK, some several times.

Wycombe

23rd Oct 2019, 07:58

Great pity. Last did it as a RTW LHR-LAX-AKL-HKG-LHR in 2009 - all in Y, but always great service and the 34" pitch helped.

The "transit" nonsense in LAX was nothing short of daft and I remember the crew apologising for the process they had to put us through as we taxied in.

rog747

23rd Oct 2019, 08:08

Wycombe

23rd Oct 2019, 11:55

I reckon it is highly likely they may extend a far-east service to go on to AKL - Nice to see the UK flag waving again there once more.

Nice sentiment, but I just can't see it. There are so many other ways to get to NZ with one stop these days.

rog747

23rd Oct 2019, 12:36

Nice sentiment, but I just can't see it. There are so many other ways to get to NZ with one stop these days.

True, but BA have been wandering back into pastures old such as Durban, so you never know!

tartare

23rd Oct 2019, 23:51

Who would have thought one of our closest Commonwealth friends has ditched it's air links with the Mother country -
Leaving me to wonder if BA will start UK-NZ services again?
I reckon it is highly likely they may extend a far-east service to go on to AKL - Nice to see the UK flag waving again there once more.

The cancellation decision has been coming for the best part of 15 years.
I don't know BA's cost structures at all - but I'd be surprised if they did that.
Inbound to NZ is very competitive.
Trans-Tasman is brutal.
What sort of load factors could they expect?
What sort of freight load inbound- outbound from AKL?
SYD-AKL only just makes sense - fifth freedom - and just one more stop on the bus route - generate some revenue, rather than pay exorbitant SYD daily parking fees.
But from anywhere else - would the incremental revenue justify it?
Would that sector break even?