Air New Zealand to suspend Hamilton-Brisbane route

Media release
30 January 2008

Air New Zealand to suspend Hamilton-Brisbane route

Air New Zealand confirmed today that it is suspending its remaining trans-Tasman service into and out of Hamilton.

The airline announced in October last year that it was suspending services between Hamilton and Sydney and Hamilton and the Gold Coast during the traditionally lower demand period from 29th March to 24th October this year.

Air New Zealand General Manager Tasman Pacific Airline Glen Sowry said today that the remaining Tasman service between Hamilton and Brisbane would be suspended from 25th April.

Mr Sowry said Air New Zealand regretted having to suspend the Hamilton-Brisbane service but it was no longer viable due to weak demand and an oversupply of trans-Tasman capacity from Auckland which is having a direct impact on customer demand for Tasman flights from Hamilton.

None of the three suspended trans-Tasman services from Hamilton are likely to be re-introduced in the foreseeable future.

Mr Sowry said the Hamilton-Brisbane service was suffering from poor load factors and equally poor yield.

“Loadings on our Hamilton-Brisbane service have averaged 58% over the past three months. In that time, we have flown the equivalent of 32 empty A320 aircraft between Hamilton and Brisbane. That is clearly unsustainable, and in the current environment we cannot afford to fly routes that make substantial losses with no forecast improvement.”

Mr Sowry said the yield on the Hamilton-Brisbane service was also poor, with 94% of the fares being sold as sale or Smart Saver fares – a significantly higher percentage than the average on Tasman services.

The average fare on Air New Zealand flights between Hamilton and Brisbane over the past nine months have been 19% lower than the average fare paid on flights between Auckland and Brisbane.

Recent improvements to the road between Hamilton and Auckland also appear to be encouraging Waikato residents to drive to Auckland to take their Tasman flights.

“This has been compounded by a massive increase in competition on Tasman services out of Auckland with additional low cost carrier capacity and new wide-body capacity, creating an incredibly competitive market and great deals for the travelling public.”

Hamilton Airport and Air New Zealand have been working together to explore ways to keep the Air New Zealand flights but unfortunately this did not meet the losses being incurred.

Mr Sowry said today’s decision was part of Air New Zealand’s ongoing review of its entire network to ensure it is operating a sustainable business.

ENDS

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