Air New Zealand to reduce Dunedin Tasman services

Media release

2 February 2009

Air New Zealand to reduce Dunedin Tasman services

Air New Zealand confirmed today that it is suspending its Dunedin-Sydney service from 16 April to 24 October 2009, whilst retaining its scheduled services to Brisbane.

Air New Zealand currently operates two services a week between Dunedin and Sydney, and two services a week between Dunedin and Brisbane.

Faced with difficult economic conditions which has seen the number of passengers flying the Tasman decline, the airline will continue to operate its Dunedin-Brisbane services, although these will be reduced to one service a week during the traditionally low demand months of May and June before returning to two flights per week in July, Air New Zealand General Manager Tasman Pacific Airline Glen Sowry said today.

Mr Sowry met today with the Chairman and CEO of Dunedin Airport and the CEO of Tourism Dunedin to outline the current market challenges and to discuss options to further generate demand for Tasman services in both New Zealand and Australia.

Today’s announcement follows the airline’s decision on Friday to suspend its remaining trans-Tasman service from Hamilton, as part of its ongoing review of its entire network to ensure it is operating a sustainable business.

Both Air New Zealand and Dunedin Airport and tourism officials believe there should be sufficient demand from both sides of the Tasman to sustain services into Dunedin in the longer term.

Mr Sowry said that Air New Zealand regretted having to suspend the Dunedin-Sydney service but it was not currently viable during the winter months due to soft customer demand and an oversupply of trans-Tasman capacity.

While direct flights to Sydney are suspended over the off peak winter months, Air New Zealand will continue to offer Otago and Southland residents daily services to Sydney, Brisbane and Melbourne over Christchurch, Wellington and Auckland.

Mr Sowry said that over the past nine months loads on the Dunedin-Sydney service had averaged 55.4%.

“Air New Zealand is very proud to fly the Koru into Dunedin but we cannot afford to continue operating half-empty aircraft across the Tasman. Over the past three months alone we have flown nearly 4000 empty seats - or the equivalent of 25 empty A320s - on the Dunedin-Sydney route.”

Mr Sowry said the yield on the service was also poor, with sale and Smart Saver fares making up 94% of the fares sold and a much lower percentage of business travel than on comparable routes.

“We have worked hard to stimulate the market in Dunedin, with some extremely competitive pricing resulting in average fares out of Dunedin being lower than other main ports. We will continue to work to ensure that a competitive range of fares are available for travellers flying the Tasman out of Dunedin airport. ”

Mr Sowry said the Tasman was suffering from a massive over supply of capacity leading to many operators offering record low fare prices.

ENDS

 
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