Air New Zealand was being prudent in reviewing its operations
in a volatile market place, Forsyth Barr head of research Rob
Mercer said yesterday.
Air NZ is understood to be considering cutting hundreds of
jobs as it seeks to claw back $1 million-a-week losses
suffered on its long-haul network.
However, Mr Mercer said that in his opinion Air NZ would not
cut the routes to London either through Los Angeles or Hong
It might consider changing the frequency and timing of the
routes as both left at times that were not attractive to
Air NZ had 75% of the Auckland to LA market and 50% from
Auckland to Hong Kong but the next legs on to London were the
problem, he said.
"It is a real challenge for those legs of the journey. The
stop is part-way through a long-haul journey and it is not
the flashest time to be leaving.
There are also plenty of choices from Hong Kong or LA to
Air NZ regularly reviewed its operations and this was part of
its ongoing review process, Mr Mercer said.
The national carrier supplied a lot of capacity during the
Rugby World Cup, with probably less demand than expected six
"We expect Air NZ to still make a profit but if the demand is
not there, we expect the airline to adjust the size of their
Air NZ was already reviewing its seating ratio and had
previously reviewed its long-flights to China, San Francisco,
Vancouver and LA during the global financial crisis, he said.
One of the major things to help Air NZ was its fleet renewal
programme. Maintenance and operating costs would reduce with
the new 777-300 aircraft.
The new aircraft were more fuel efficient and gave the
airline a chance to look at improving its costs and being
innovative with its products, Mr Mercer said.
The New Zealand Herald reported that Air NZ had
confirmed a review of its long-haul operation but was
refusing to rule out withdrawing its flagship daily services
The company reportedly told staff a corporate overhead review
was under way.
The news came as Air NZ aimed to boost profits by $110
million in time for the 2015 financial year.
House of Travel director Brent Thomas said he did not think
the airline would sever its ties with Britain as it was
synonymous with Kiwis travelling there.
"But obviously they've got to look at what's viable and
The greatest potential difficulty from a withdrawal by Air NZ
was the loss of cheap "add-on" flights from provincial
centres to catch long-haul services from Auckland or