Air New Zealand has announced a major revision of its domestic operations, including the cessation of all flights to three cities.
From April 2015, the national carrier, under its Eagle Airways subsidiary, will stop flying to the North Island hubs of Kaitaia and Whakatane, plus the South Island town of Westport, as it moves to stem the losses from its regional operations.
It will also suspend flights on the Whangarei-Wellington, Taupo-Wellington and Palmerston North-Nelson routes, while Hamilton-Auckland flights will cease operating from February 2016.
The cuts stem from Air New Zealand’s efforts to reduce its fleet of smaller 19-seat Beechcraft aircraft, which operate many of these smaller routes. These aircraft will be removed from the airline’s fleet by August 2016, and replaced with larger 50-seat Bombardier or 68-seat ATR aircraft.
This will see capacity added to several cities, including Hamilton, Rotorua, Gisborne, Taupo, Blenheim, Hokitika and Timaru. But Air New Zealand said that demand for these smaller routes “simply cannot sustain” the larger aircraft, forcing the suspensions.
“The 19-seat aircraft is the smallest in the Air New Zealand fleet but has the highest cost-per-seat to operate because the fixed costs of operation are distributed across fewer passengers. This has led to Eagle Airways, which operates the 19-seat fleet, losing NZ$1 million (US$776,000) per month for the past two years,” explained Air New Zealand’s CEO, Christopher Luxon.
“Air New Zealand has already begun putting more seat capacity into those markets and is announcing today an acceleration of that process with an additional NZ$100m investment in four new 68-seat aircraft.”
Luxon added that he accepted that the news would be “disappointing for some communities”, but stressed that the move was necessary for the “future sustainable success” of its regional operations.