American Airlines' planned daily service between Auckland and Los Angeles is already benefiting consumers after Air New Zealand responded by promoting a $499 one-way fare on the route, American Airlines has suggested.
American Airlines chief executive Doug Parker announced it would launch a daily non-stop service between Auckland and Los Angeles from June, in conjunction with joint venture partner Qantas.
Parker said American Airlines and Qantas had yet to work out prices, but said consumers would benefit from the "friendly competition" with Air New Zealand, which had held a monopoly on the route since 2012.
LISA MAREE WILLIAMS/GETTY IMAGES Qantas chief executive Alan Joyce.
Qantas chief executive Alan Joyce, who joined Parker and Transport Minister Steven Bridges in Wellington for the announcement, said flights between Auckland and LA were likely to be cheaper outside the northern and southern hemisphere summer seasons.
"The thing with the Pacific has always been the seasonality of it. You get parts of the year which you have to stimulate with lower airfares.
"There will be a lot more people travelling, probably on lower airfares, but we think the economics will work."
Air New Zealand responded to the move by its rivals by promoting a $499 one-way and $973 return fare between Auckland and Los Angeles on its Grabaseat website, for flights between early May and late August.
Spokeswoman Brigitte Ransom, said that while it had some sale fares to the US on its Grabaseat site on Wednesday, there had been no recent changes to its standard fares.
Air New Zealand's Auckland to Los Angeles return fares booked six months in advance cost about $2000 for economy, $4000 for premium economy and $8000 for business class.
Mike Stone/Reuters
American Airlines chief executive Doug Parker was in New Zealand for the announcement.
Flight Centre New Zealand general manager Sean Berenson said increased competition often resulted in carriers responding with lower fares.
"We're in something of a golden era of travel at the moment with many destinations being much more accessible and more competitively priced," Berenson said.
Parker said attractions of American Airline's Auckland to LA "product" would include the fact it would use its newest aircraft, a 787-8 Dreamliner, to fly the route. The airline offered wi-fi throughout the aircraft, he said, with a "flight pass" costing US$19 (NZ$29).
It expected most of its customers on the route were likely to be people from North America, travelling to New Zealand on holiday or on business, rather than New Zealanders, he said.
American Airlines would market New Zealand as a destination to its 100 million frequent fliers through direct marketing, which he expected would boost tourism and "grow the market".
"The winners here will be consumers," he said.
Joyce said Qantas planned to upgrade its airport lounge in Auckland, but not in time for the launch of the joint service.
Bridges said the service marked "the first direct, non-stop competition" between the One World and Star Alliance airline alliances on the route. "Competition, ultimately, is very good for consumers," he said.
American Airlines' aircraft will have 226 passenger seats, including 28 "lie flat" business class seats and 55 economy seats with extra leg room.
Air New Zealand flies daily to LA with about 17 return flights per week and has had a monopoly on the route since Qantas axed its Auckland to LA service in May 2012.
It uses Boeing 777-200 and 777-300 aircraft with economy, premium economy and business class seating on the route.
Parker acknowledged other American airlines had struggled to make similar services work commercially in the past. But he said the fact the travel market had got "so much bigger", the economics of the mid-sized 787-8 aircraft, and the joint venture partnership with Qantas meant he was "highly confident" the new service would be sustainable.
He and Joyce said they could partner on an additional route between New Zealand and Dallas down the track.
"We can build on the LA service over time but we need to walk before we can run, and demonstrate we have digested the Auckland-LA and Sydney-LA markets successfully. When that happens we will be looking at expansion opportunities."
Tourism Industry Association chief executive Chris Roberts said the US market was growing at 11 per cent a year, with 237,000 visitors arriving to New Zealand in the past year.
Their total spending was an estimated $967 million a year.
"The US is our third biggest visitor market and they enjoy what we have to offer," Roberts said.
Make no mistake; the gloves are definitely off again in the transtasman battle between Air New Zealand and Qantas which now has the biggest airline in the world to do some heavy hitting.
There was a bit of good humoured japery over Rugby World Cup bets resulting in Qantas staff having to wear All Black supporters kit across the Tasman (although it wasn't such a hardship - that part of the Australian airline is registered here and crewed mainly by Kiwis) but confirmation of reports in the Herald that American Airlines will fly from Auckland to Los Angeles restores normal service in the transtasman rivalry.
Although the US airline is supplying "the metal" - in this case a near new Boeing 787- to fly across the Pacific this is very much a Oneworld alliance proposition - Qantas is a driving force. It fits with the Australian airline's aggressive stance here in New Zealand and now in American Airlines - the world's largest carrier by traffic - it has giant ally.
As American Airlines chief executive Doug Parker says his airline wouldn't have been heading here without the support of Qantas and its chief executive Alan Joyce. Parker says there is room for both Air New Zealand and American - most of his customers will come from the US among its 100 million frequent fliers.
But direct flights to the US have been Air New Zealand's domain for the last three years. There are more indirect flights now but as one analyst has said every day Air New Zealand has the direct route to itself is a good day for Air New Zealand.
Even signals by American that is interested in New Zealand have sent the Air New Zealand share price reeling, a reaction that is probably overdone.
Air New Zealand is also in record profit territory, growing its longhaul services quickly and in good shape to respond to a competitive threat.
Qantas subsidiary Jetstar is about to challenge Air New Zealand in another part of what has been its territory for longer - regional routes that can at worst be big money losers and at best, lucrative. Joyce said with its growing network through Jetstar in New Zealand, there will be a link from Dunedin to Disneyland.
Qantas was in dire financial straits two years ago but has enjoyed a remarkable turnaround thanks long overdue restructuring of its long-haul operation (now back in growth mode) and much cheaper fuel.
The same goes for American Airlines - in even worse shape 18 months ago, but now reporting record profits so is retooling its fleet and is on the expansion trail as well.
Air New Zealand is also in record profit territory, growing its longhaul services quickly and in good shape to respond to a competitive threat.
As chief executive Christopher Luxon has said on the back of impregnability at Eden Park, "we don't lose to Aussies at home.''
It will be a tough scrap with an outcome difficult to predict. But with Air New Zealand slashing some fares to below $500 already there's one guaranteed winner -the traveller.
It dropped fares sharply and quickly on regional routes and will pour more brand new aircraft into the regions during the next five years - showing it will not give up without a fight.
The same has happened already in the face of competition across the Pacific. Its own deepening alliance with United Airlines will help and expect fares will continue to come down sharply at times.
Airlines from the US have been in the New Zealand market from time to time and for different reasons come, then gone. American's alliance with a powerful player in Qantas will allow it to put down stronger roots and it now has better, more efficient planes.
It will be a tough scrap with an outcome difficult to predict. But with Air New Zealand slashing some fares to below $500 already there's one guaranteed winner -the traveller.
Air NZ's first South American route has been years in the planning, reports Grant Bradley.
The route is a commitment worth hundreds of millions of dollars.
Air New Zealand will early next month take a big leap into what has long been a tempting blank spot on the map.
It begins flights to Buenos Aires after five years of scouting South America, a service it says will make money from the get-go, but one that has been its most challenging long-haul route to set up. The route is a commitment worth hundreds of millions of dollars.
Argentina lived up to its reputation as a notoriously difficult place to do business. The World Bank ease of doing business ranking for the past year puts the country in 121st place out of 189 countries (New Zealand is second) and for the airline, the masses of red tape took some getting used to.
Stephen Jones, Air New Zealand's chief strategy, networks and alliances officer, says it also took some persuasion to get his fellow executives to get the flights over the line.
"The internal business case was interesting," he says. "If you don't know much about Argentina you look at it as a high risk place, a volatile government and currency -- why would we even bother with it?"
There were doubters among the airline's eight-member executive who were worried about the risk.
"We had two holdouts so we just had to understand their concerns in a lot more depth and brought them back more evidence around those. Risk management would be particularly around the financial aspects -- how do you get your money?"
Rather than leaving a "big pile of cash there" the airline will repatriate money made in Argentina weekly.
"Other than what we spend in pesos in Argentina, we have no use for that so we need to convert that out and we might as well do that quickly -- it just is good practice."
As part of the risk assessment, the airline had to consider risk around its main financial asset in the country -- a $260 million Boeing 777.
"We've got mobile assets so it's not like putting a dairy factory over there. If the worst comes to the worst you just fly the plane home."
It sounds dramatic, but Jones says he never lost sleep about the route, which planners first started assessing in 2009 before getting serious about it in August last year.
We've got mobile assets so it's not like putting a dairy factory over there. If the worst comes to the worst you just fly the plane home.
While the airline had dipped into Argentina with a one-off rugby charter flight three years ago, the direct flights which start on December 1 are the first scheduled services to any point in South America in its 75-year history. It will initially fly three times a week to the Argentine capital of close to 13 million people but Jones is confident it will quickly build up frequency.
He says planning for Argentina began in the same way as all its route development -- studying movements of people and the type of traveller who would potentially fly with it.
Potential new routes are ranked once a month by the airline, which is hungry for growth and will expand its international business by 15 per cent over the next year. This includes opening up a new route in the United States, Houston, where five-times-a-week flights begin on December 15.
While it is focused on the Pacific Rim, Argentina, just the other side of the Andes, broadly fitted within that strategy. And with its population concentrated in the capital, it met another of the criteria.
"With Buenos Aires it's one big city that makes up most of Argentina -- whereas in India you've got 11 or 12 different cities that people want to go to. If they go to a concentrated place that's better -- the market size has to be big enough to get a minimum of three services for a wide body aircraft per week," says Jones.
There is a bigger picture in play -- New Zealand becoming something of a mini hub to link Australia and Asia to the southern part of South America.
"Historically the company thought of itself as being at the end of the world, you don't go through New Zealand to get to anywhere, but South America was one place that could change that paradigm," he says.
"There is a big unserved flow of passengers from Australasia and Southeast Asia to South America and New Zealand is uniquely positioned geographically for that because it sits better than Australia -- it is a more intermediate point."
New Zealand-based traffic will make up 40 per cent of demand, but just over a third of passengers will come from Australia.
The Argentine outbound market also has big potential. There is old farming wealth and a high propensity to travel among Argentine people with a "live for now" spirit.
"They like to travel and always have done," says Jones. "Because the currency is so volatile and depreciates a lot, there are incentives to spend now."
For route planning, competitors' behaviour is crucial. Direct flights between Auckland and Argentina finished more than two years ago after state-owned Aerolineas Argentinas spent years struggling with the route. The airline quit flying to Australia this year. Chile's LAN and Qantas are in partnership and cover the route to the Chilean capital of Santiago and beyond, so Chile was dismissed as an option.
My sense is that we'll be flying this [route] in 20 years from now.
Air NZ's Stephen Jones
Brazil was considered but turned out to be operationally challenging. While prevailing tailwinds would make it easy enough to fly there, coming back could be tricky. About 20 per cent of the time, the airline would be quite severely constrained by the load it could carry.
Buenos Aires is well with the range of Air New Zealand's 777-200ER, although as with all over-ocean flying there are contingency stops, including Rarotonga and Easter Island.
A shortage of planes had crimped long-haul growth a few years ago, but with Dreamliners added regularly to the fleet and the refurbishment of 777-200s it is now expanding quickly.
Jones says the other key part of the equation is having a strong relationship with a local partner airline. Without that, nowadays it won't fly into a country.
Aerolineas is a member of the SkyTeam grouping of airlines and Air New Zealand is a member of the Star Alliance, and while airlines find it easier to work within their alliances, they make exceptions for commercial reasons.
Last year Jones went to Aerolineas with a proposition: "We would like to work with you to allow you to serve that market but using Air New Zealand metal and in return we would like your support to come into your market."
He says the Aerolineas executives "took a bit of talking around" but they could see the opportunity.
The Argentine airline has suffered more than its fair share of volatility in a volatile industry, has high labour costs and after being renationalised in 2008 has been subject to political interference. However it is revamping its fleet and Jones says it has "good commercial people who are easy to work with so we've developed that relationship.
"But it's a lot of face-to-face time -- you can't do it over the phone or email. You go over there and build trust and explain to them the business case and ultimately being prepared to commit to go and fly there."
The air services agreement between New Zealand and Argentina had to be extended and Air New Zealand had to satisfy safety and financial regulators.
Jones says Aerolineas' support has been crucial in helping Air New Zealand negotiate the bureaucracy in Argentina, where much commerce is still paper-based. All Air New Zealand documents had to be translated into Spanish, notarised and stamped by both governments.
Under the code share deal, Air New Zealand passengers will be able to be booked on Aerolineas flights throughout South America.
Air New Zealand is building up a team of as many as 15 people in Argentina -- much larger than would normally serve a three-times-a-week service -- because of the complexity. It is led by locals with wide airline experience.
Route planning
How airlines decide where to fly next:
• There has to be a growing market -- preferably a large population concentrated in one city and one which can fill the lucrative premium cabins.
• They can't survive where the existing competition is too dominant.
• They have to have the right planes -- for Air New Zealand the arrival of its Dreamliners and refurbishment of 777s has finally freed up long-haul capacity.
• They like to work with a local partner; an amenable Aerolineas Argentinas in a rebuilding phase made this possible for Air NZ.
"It's important to have people who know their way through the system there -- we could blunder around [by] sending well-meaning Kiwis over there," says Jones.
He says airlines which have gone in without local partnerships had found air bridges missing and gates changed at short notice.
Air New Zealand's chief sales and commercial officer Cam Wallace says there was strong support for the service here and in other countries.
"We're getting strong support from Australia, particularly New South Wales and Victoria, good penetration out of the South American market because New Zealand is a hot market."
But there is still a lot of work to do in Argentina. In a listing of the places Argentines want to visit, New Zealand ranks 48th.
Because the currency is so volatile and depreciates a lot, there are incentives to spend now.
Wallace says the rugby link could be cultivated, particularly among school or club rugby teams which have traditionally tended to visit South Africa.
The managing director of Flight Centre, Chris Grieve, says agents welcome the new service, which has been popular and has already led to lower fares. LAN has had the route to South America through Auckland to itself since Aerolineas pulled out.
"Competition is a good thing and that was evident at our travel expo in August where we had Air New Zealand and LAN offering return airfares to Buenos Aires for $1200, where previously they had been more than $2000 and up to $3000," he says.
Not all fares are going to be sold at that level but it opens up a lot of opportunities for our travellers to get to South America.
The area has been popular with younger travellers but is growing in popularity among baby boomers who can use Argentina as a launchpad for Antarctic excursions or going to Machu Picchu in Peru.
Jones says Air New Zealand is committed to the route.
"I would say three years is a reasonable sort of time. By that stage you've given it a lot of effort. You've got to know the market quite well -- if you're not well on track to being profitable by then there's a problem," he says.
"My sense is that we'll be flying this in 20 years from now and it will be a long term profitable business."
Dreams of an air fare war between New Zealand the United States have been realised, with Air NZ today slashing its airfares to Los Angeles just as American Airlines confirmed it will start flying here in June.
Air NZ has cut grabaseat fares to Los Angeles to $499 from around $785. American Airlines chief executive Doug Parker said it hadn't set its fares yet but said it would be competitive.
The airline is the world's biggest and will use a Boeing 787 Dreamliner on the route -
breaking Air New Zealand's stranglehold on direct services between Auckland and the United States.
The service, which involves daily flights for much of the year, will need regulatory approvals.
Air New Zealand CEO Christopher Luxon said increased competition on the route was not unexpected.
"We're ready for it and we look forward to it."
Competition was a good thing and more direct flights would grow traffic and the whole New Zealand tourism market, he said.
The key issue was the sustainability and stability of new routes and services.
"Air New Zealand is here for the long term," he said
Air New Zealand's share price dipped by as much as 19c from $2.85 yesterday following news of the announcement by the rival carriers.
That mirrored a fall in June when American flagged its intention to begin flights to New Zealand, when it announced it was returning to Australia with a Sydney-Los Angeles service starting next month.
American Airlines has been scouting the New Zealand market this year after deepening an alliance with Qantas. Direct services from New Zealand to the United States now brings competition to the market which has been missing since the Australian airline withdrew from its Auckland-Los Angeles service in 2012.
See the NZ-Pacific air routes here:
In an application to New Zealand's Ministry of Transport earlier this year, the airlines said an expanded alliance across the Pacific would directly benefit New Zealand passengers and they expect more competitive air fares.
In that submission, the airlines said the increase in flights between Australia and the United States - and the possibility of flying directly from New Zealand to the US - would result in a "strong and swift reaction "from competitors.
"Particularly Air New Zealand, Virgin Australia/Delta Airlines and United who will fight to retain and gain passenger share."
The expansion of the alliance has been given interim approval by the Australian regulator - in spite of objections by Air New Zealand and Hawaiian Airlines - and has been considered over the last three months by the New Zealand ministry because of the potential impact on this market.
Flight Centre said it would welcome any new route.
"Greater choice for our customers is a good thing and likewise having more choice, particularly on popular routes, is always good news for travellers."
A quick online survey of airfares across the Pacific shows Air NZ's dominance of the route:
Air New Zealand has had direct flights to itself since Qantas pulled out of a loss-making Auckland-Los Angeles service three years ago.
While the number of indirect flights between Auckland and the US mainland has grown, Air New Zealand benefits strongly from no having a direct flight competitor.
When American Airlines said in June it would investigate direct flights to New Zealand Air New Zealand's share price took a hammering, although it has recovered since.
Air NZ is also facing increased competition on its popular Vancouver route, with Air Canada announcing flights from the Canadian city to Brisbane.
United Airlines, Air New Zealand's Star Alliance partner, last month announced it was planning to return to New Zealand operating a three times weekly 787-8 service between San Francisco and Auckland from July, moving to daily services with a larger 787-9 aircraft from next November.
United pulled out of flying to New Zealand in 2003 after it was forced into what was then the airline industry's biggest bankruptcy.
Air New Zealand operates a daily service from Auckland to San Francisco, 18 return services per week from Auckland to Los Angeles, four services per week to Vancouver and four services per week to Honolulu, Hawaii.
From December 15 the airline will also start direct services from Auckland to Houston five times per week
Air New Zealand has announced it is in the final stages of evaluating two new long haul flights - but where to exactly?
"We look forward to putting our brand and that of our nation on the map in at least two new international destinations for the airline next year," spokesman Stephen Jones said.
Expecting to make an announcement on the first route before Christmas, he said he is confident that Kiwis will really embrace it.
House of Travel retail director Brent Thomas said the long-haul flights might be somewhere in the Pacific Rim.
"Air New Zealand is building an airline that's servicing the Pacific Rim and point-to-point flying," he said.
He expects the airline would have done a significant amount of study to make sure the routes would be viable, purely based on the cost of setting them up.
Speculating on where it might be going, he said it could be a seasonal flight like their flights to Bali - but we would all just have to wait and see.
With more international carriers coming into New Zealand bringing passengers, he said passenger growth had increased by five per cent.
Air New Zealand was looking for different routes to grow their passenger base and also bring more people into our "beautiful country", Thomas said.
Air New Zealand's Buenos Aires and Houston services commence operations next month.
New Zealanders can expect a "major announcement" from alliance partners Qantas and American Airlines on Wednesday.
Both Qantas chief executive Alan Joyce and American Airlines chief executive Doug Parker will visit Wellington for the announcement which Transport Minister Simon Bridges will also attend.
House of Travel commercial director Brent Thomas said there were rumours the two Oneworld airlines could be launching a direct codeshare service from New Zealand to the United States.
Air New Zealand has a monopoly on direct flights from Auckland to Los Angeles and San Francisco and, from December, Houston.
It also flies Auckland to Honolulu along with Hawaiian Airlines.
When new carriers entered a route on which there was no competition previously consumers benefited through lower airfares and greater choice of products, Thomas said.
From July 1 United Airlines will also start flying three times a week from San Francisco to Auckland with a 242-seat 787-8 aircraft.
In December Qantas launches a new flight between Sydney and San Francisco and American Airlines launches flights between Sydney and Los Angeles.
Air New Zealand has also said it was in the final stages of evaluating two new long haul routes, one of which was expected to be announced before Christmas.
Centre for Aviation analyst Blake Moore said he expected American Airlines to announce it would fly its 787 Dreamliner on the Auckland to Los Angeles route as part of its alliance with Qantas.
Thomas said it would be interesting if American Airlines and Qantas launched a service on a route which Air New Zealand had a monopoly on, such as Los Angeles.
"Los Angeles is a gateway for New Zealanders to mainland USA," Thomas said.
Increased capacity on a route encouraged more people to travel, he said.
"Airlines have to price at a level that creates the demand to fill certain parts of the plane."
Thomas said it was also possible Qantas and American Airlines would announce a trans-Tasman codeshare service.
More Americans were travelling to this part of the world as the US dollar strengthened against the kiwi and aussie dollar, he said.
That meant more American tourists would be visiting Australia and wanting to cross the Tasman to New Zealand on their trip as well.
Air New Zealand's decision to buy 15 new ATR72-600 aircraft will result in lower regional airfares.
Air New Zealand chief executive Christopher Luxon said the new 68-seat planes would replace the airline's 11 older ATR72-500s.
The purchase would increase Air New Zealand's total ATR fleet by four to 29, adding an additional 600,000 seats into regional New Zealand each year.
Luxon said to fill those seats Air New Zealand would need to stimulate demand in the regions by lowering prices and driving tourism through events.
"The bottom line is it's going to be a very good deal for customers," Luxon said.
At list prices the new aircraft are collectively valued at US$375 million (NZ$569m).
In 2012 the airline announced it would buy 14 ATR72-600 aircraft - seven have been delivered with the remaining seven due to join the fleet by mid-2016.
The additional 15 aircraft would begin arriving from late 2016.
Air New Zealand also operates 10 19-seat Beech 1900D and 23 50-seat Bombardier Q300 aircraft.
It has been flying ATR aircraft since 1995 and the ATR72-600 is the third model it had flown, Luxon said.
"They're just perfectly designed for New Zealand."
The company would sell its ATR72-500 fleet, Luxon said.
In April Air New Zealand made major cuts to its regional network, ending services to Kaitaia, Whakatane and Westport. Whangarei to Wellington, Taupo to Wellington and Palmerston North to Nelson routes were also scrapped, with Hamilton to Auckland ending in February.
The routes, which were served by Beech aircraft, were losing $1 million a month.
As a result of the cuts Air New Zealand would be looking to sell its Beech fleet.
Luxon said the airline would not be revisiting those regions with ATRs.
"The structural economics of those towns and those regions means that we have committed that we will not be going back into those towns."
On routes which were previously serviced with Beech aircraft but were now serviced with a Q300 Air New Zealand had achieved a lower cost per seat, resulting in a 15 per cent fare reduction, Luxon said.
"We've already had several towns make that transition."
Air New Zealand shares closed up 4 cents on Thursday at $2.84.
ATR chief executive Patrick de Castelbajac said the ATR-600 delivered good economics.
It also featured improvements for passengers including overhead compartments which held 30 per cent more luggage than the ATR-500s.
Cabin noise had also been reduced by improving the synchronisation of the twin propellers resulting in less vibrations, he said.
The other big difference was in the cockpit, which de Castelbajac said described as one of the most modern in aviation.
Avionic improvements allowed the aircraft to perform a range of approaches which could save on fuel, he said.
Prime Minister John key, who was at the announcement at Air New Zealand's Engineering and Maintenance base at Auckland Airport, said tourism in New Zealand was booming with about 3 million tourists visiting each year.
The new ATRs would benefit regional New Zealand because more international and domestic tourists would be willing to fly to the regions with increased flight frequency and more affordable fares, he said.
A new site for aircraft navigation equipment on the Monaco Peninsula has upset residents who says it is an "industrialisation" of the area.
Monaco resident of 40 years and former residents association chairwoman Chrissie Keay said residents knew nothing about the plans to excavate a section on Point Rd to install the equipment, and there had been a "complete lack of consultation".
"How could it have gone so far down the track with it starting in three weeks without us knowing it was happening," she said.
"We're very protective and passionate about our little peninsula here, and we see it as an industrialisation of our peninsula."
Nelson Airport and Airways are moving the DVOR/DME - aircraft navigation equipment - from its current site near the terminal to the land the airport owns on Monaco peninsula to provide for the future expansion of the airport. The gear would also be upgraded in the move.
Keay said it wasn't until two weeks ago residents were made aware of the airport's plans when the company dropped a flier in letterboxes about a public meeting five days later.
The flier said excavation of a basin to road level on Point Rd would start in November. Construction of an equipment shelter and foundations would take place in March next year, and set up and commissioning would be done in July next year.
It said the site was chosen as it did not restrict aircraft operations in and out of the airport.
Keay said the flier had come out of nowhere, and although the resource consent for the earthworks had been approved more than a year ago most residents knew nothing about it.
"They've just thrown this at us."
She said the structure, which would be surrounded in barbed wire for security reasons, didn't belong at Monaco and residents had the right to be upset.
"It all comes down to consultation, if this was in the works for a year, it's a disgrace that we have just heard it."
She and others were going to reactivate the residents association, make fliers and hold hold a meeting about the development.
"If the majority wants to push it we'll push it, and we'll push for the residents who are opposed to it."
Nelson Airport chief executive Robert Evans said the equipment's current location was a big constraint on the airport. "We can't develop anything within about a three hectare area so that leaves about about seven acres of land on the airport next to the terminal which we're not able to develop on".
The navigation equipment cannot be near anything over a certain height, due to signal obstruction.
He said the land the equipment was currently on was valuable because it was "next to the apron, it's next to the runway and the terminal expansion area".
"For quite some time it's been identified that the land that we own on Monaco peninsula is really not much use for anything because of its location to the runway, but it is ideally suited to the location of this aviation equipment."
He said the equipment would "basically sit in a hole" as the structure cannot obstruct the airspace. Only two "arrow things" would sit above the line of the land.
He said the structure would be visible, but "only for the purposes that you'll just drive past it". The airport and Airways had discussed covering the hole so it was not open to the road when the work was finished, Evan said.
"We need to get it built and established and then have a look at what we can do around that."
He did not think the structure was "industrialising Monaco" and it was one of the few places the equipment could go due to technical requirements.
"We've owned that land and like all the residents we're entitled to build like all the residents, and we think the impacts are pretty minimal once it's up and running, it'll be barely noticeable."
He said the airport needed to prepare for future growth and start on its long term plan.
"Our effort to consult and discuss with residents was in my view a positive step.
"There's no requirement for that, but we thought it was an important thing to do. I guess it can be a double-edged sword sometimes but we're more than happy to have those conversations."
Although he did agree with residents who thought consultation should have taken place earlier he said he "wasn't here two years ago, I'm here now and I felt it was important that we had a conversation with it.
"I appreciate it upset a few people but I really do think once it's in and operating it'll have very little impact on daily life."
Air New Zealand scoops top regional award for the seventh year running.
Photo: DEAN KOZANIC/FAIRFAX NZ
Air New Zealand been named Australasia's Leading Airline at the regional 2015 World Travel Awards.
"To win ... for the seventh year in a row is incredibly exciting. We're continually looking at ways to enhance the customer experience at all stages of the journey and these awards are testament to that work and to the efforts of our 11,000 staff," Air New Zealand general manager customer experience Carrie Hurihanganui said.
The national carrier also took out the award for Australasia's Leading Airport Lounge for its Christchurch Airport lounge for the third year running.
The awards for the Asia and Australasia region were announced overnight at a ceremony in Hong Kong. All regional winners will compete for the World Travel Awards' global awards to be announced at a gala ceremony on December 12 in Morocco.
Air New Zealand did not manage to take out any of the global categories last year. The 2014 top airline was awarded to Etihad Airways.
Auckland Airport - which won the top Australasian Airport in the 2014 regional awards - failed to retain that title overnight. Melbourne Airport was named the regional winner.
MORE KIWI WINNERS
Australasia's leading airline: Air New Zealand
Australasia's leading airport lounge: Air New Zealand Koru Lounge, Christchurch International Airport, New Zealand
Australasia's Leading Casino Resort: Sky City Auckland, New Zealand
Australasia's Leading Conference Hotel: InterContinental Wellington, New Zealand
Australasia's Leading Experiential Luxury Property: Annandale, New Zealand
Australasia's Leading Tourist Board: Tourism New Zealand
Australasia's Leading Villa Resort: Eagles Nest, New Zealand
https://assets.stuff.co.nz/video/production/1446017784162-airline.mp4
Hamilton Airport wheeled out the water canons for the first landing arrival of the new regional airline.
Kiwi Regional Airlines (KRA) took its first commercial flight on Tuesday after it won regulatory approval from the Civil Aviation Authority and was welcomed, with full honours, to the Waikato.
Their first scheduled stop at Hamilton Airport from Nelson was delayed by 20 minutes but passengers were pleased with the service.
ELTON SMALLMAN/FAIRFAX NZ
Water canon honours Kiwi Regional Airlines' first commercial arrival in Hamilton.
Hamilton mum Elysha Memon and her baby Maaya visited family in Nelson regularly.
There were "teething problems" but a direct flight cut out the hassle.
"What I like best is we can go direct from Nelson to Hamilton without having to go through Wellington or Auckland," said Memon.
Two flights to Nelson were "inconvenient" and KRA's cut price helped.
"I missed out on the specials, unfortunately," she said.
"But it's better than $300 or $400."
Nelson man Kit Brydon arrived on the flight and said it was a "nice plane and a good flight".
"We had cake when we left and then the welcome here into Hamilton with the fire hoses," said Brydon.
He said Nelson families with children in Hamilton would benefit from the connection.
"I hope it continues," he said.
Nelson Airport chief executive Robert Evans also touched down on the first flight between cities.
"It was pleasant with a cup of coffee, some water, a biscuit and a few lollies," said Evans.
"The plane went well, it was comfortable."
KRA joined other newcomer Originair to fly into Nelson and Jetstar will take off in December.
Evans said there was plenty of excitement in the Nelson aviation industry.
"There is a lot of aviation activity so a lot of excitement is building around all of those airlines and today is a great day with Hamilton and Dunedin now on our route network," said Evans.
Hamilton Airport acting chief executive Mark Morgan said a new player in the skies was just what the airport needed.
"As an airport company, you strive to attract airlines to your airport so to have another airline operating from Hamilton is great to have," said Morgan.
"Kiwi has a lot of history in the Waikato so to have Kiwi Regional Air in business now is great to see."
With just one aircraft, KRA was exposed if it met mechanical failure but Morgan said it had already brought numbers to the airport.
"We've had people out here today that have got an interest in aircraft and airlines, taking photos, and they are not even travelling so I think it creates general interest and that can only be good for aviation and for airports."
https://assets.stuff.co.nz/video/production/1446004416578-Kiwi_1.mp4
Kiwi Regional Airlines has begun its Nelson flights assuring that its customers should not be concerned about it only having one plane in its fleet.
The airline has one 34-seat twin turbo-prop Saab 340A, but airline chief executive Ewan Wilson it would only fly when it was safe.
"We will clearly try to mitigate any mechanical risks by good maintenance and having spare parts and competent engineers."
He said the airline also has a good relationship with manufacturer Saab, which would be helpful if they required parts.
"If we have a mechanical problem the plane stays on ground until we are able to fix it and passengers will face a disruption," he said.
Ewan Wilson Chief Executive Officer Kiwi Regional Airlines.
Wilson is not new to the aviation industry - he launched the short-lived airline Kiwi International Airlines about 20 years ago.
It lasted about two years before collapsing in 1996. This time around would be "hugely different", said Wilson in September.
"I'm being careful to avoid direct competition [this time], I've learnt so much [since launching Kiwi International Airlines]."
After a rainy start and a few delays, the airline flew its first passengers between Dunedin, Nelson and Hamilton on Wednesday with around 20 passengers on the flights.
"We had a bit of a weather challenge in Queenstown in the morning with fog in Dunedin, which meant we were late coming out. But the flight went well," said Wilson.
The airline cancelled a Dunedin to Queenstown flight on Wednesday morning due to fog. The passengers were given refunds and then the plane flew from Dunedin to Nelson with a 30-minute delay.
Wilson said he intended to purchase another plane for his fleet within the next 12 months depending on the support the airline gets from the public.
He said Kiwi Regional Airlines was the only company which offered a service where customers' airfare payments were held by a credit card payment facility based in Europe. The airline could not draw those funds until a passenger had travelled.
"If you don't get the service for which you purchased with a credit card we will reimburse you," he said.
He said the passenger numbers on the plane were as he expected and he was encouraged by the interest for direct regional routes.
"[Air New Zealand's earlier] decision to drop some of the regional routes triggered us to review our options. We are confident that we will get support on those routes," he said.
Passenger Elliot Harris, who flew from Dunedin to Nelson on Wednesday, said he was happy with the service given the direct link between Otago University where he studies and his home in Nelson.
"Hopefully they stick around, it's better than taking the bus," he said.
He said the flights worked out to be considerably cheaper than other travel methods between the two cities.
Another passenger from Motueka, Walter Hofmann, was travelling to Hamilton from Nelson on Wednesday. Hofmann said he was thrilled with the choice of direct route because his daughter lives in Hamilton.
"Why make a roundabout trip when you can go direct," he said.
Nelson Airport chief executive Rob Evans said the addition of Kiwi Regional Airlines was another exciting chapter for the airport.
"It's another opportunity for us to network and grow," he said.
Evans said the Dunedin route had plenty of passenger interest and having a plane half full on the airline's first day was "always a good thing".
Kiwi Regional Airlines flew their first plane in and out of the Nelson Airport this morning. The flight came from Dunedin and was welcomed with a traditional water arch courtesy of the Nelson Airport’s fire department.
The airline is the second new airline to Nelson Airport this year. Earlier this year, Originair began flying Nelsonians to and from Palmerston North, while Jetstar is scheduled to provide flights to and from Auckland on December 1, adding a Wellington route in February. These airlines join Air New Zealand, Sounds Air and Air 2 There, already operating out of Nelson Airport.
Dunedin student, Matthew Dawson was on the incoming flight, returning to Nelson for the summer university break. “It was an enjoyable fight, and it’s very handy for students because it’s direct to Nelson and you don’t have to stop over in Christchurch, I know my mates from uni, and I will fly Kiwi Air from now on.” Unfortunately, Matthew got caught out by the baggage allowance difference between Kiwi Regional Airlines and Air New Zealand. Matthew’s was 7.6 kgs overweight so he arrived in the Nelson Airport wearing 14 shirts. “Man, it got hot,” laughs Matthew.
The Kiwi Regional Airlines baggage allowance is 20kg per bag. For more information on Kiwi Regional Airlines or to book a flight, visit: http://flykiwiair.co.nz
New airline Kiwi Regional was to make its first flight from Nelson today.
The airline's SAAB 340A aircraft was scheduled to fly from Dunedin to Nelson Airport this morning and then on to Hamilton at 11.25am.
Kiwi Regional chief executive Ewan Wilson said the 30-seat aircraft would be about 50 per cent full.
"The sales have been really encouraging. The Dunedin to Nelson and Nelson to Hamilton services have lived up to our expectations," he said.
The new airline will fly direct routes from Nelson to Hamilton and Dunedin four days a week. It will also fly a direct route from Nelson to Queenstown over the winter season.
An unfamiliar sight greeted airport goers on Saturday as Kiwi Regional Airlines made a surprise appearance.
Kiwi Regional Airlines (KRA) distinctive new green-tailed plane was spotted at New Plymouth airport on October 17 sparking questions as to whether the newly formed company would be expanding.
KRA is a Hamilton based company operating a single Saab340A aircraft to Nelson, Dunedin and Queenstown with plans to add another aircraft to their fleet.
Route network and revenue manager for KRA, Dave Macpherson, said the fleeting appearance in New Plymouth was to test the waters for future flights.
"We had a spare day so we wanted to test the timing and logistics of flying to New Plymouth," he said.
"We are looking at interest from other provincial towns including Invercargill, Napier and Tauranga."
"It is unlikely to be this year though."
"This year we just want to nail down where and when we could extend."
Although KRA's first official flight day is scheduled for October 27, Macpherson said they would start calling for expressions of interest from other provincial locations.
KRA's plans to expand come after Jetstar announced on June 18 they would start flying to and from New Plymouth and four other regional destinations from February 2016.
Airport manager at New Plymouth airport, Kevin Hill, said the airport would be interested if KRA did decide to start flying to New Plymouth, but said nothing had been formally discussed.
"With Jetstar starting to fly here in February 2016 finding gate space and sorting out timing could get a bit blocked up."
Planned extensions to New Plymouth's airport terminal were scheduled for May 2016 but would be moved forward to accommodate Jetstar and are likely to be completed by mid-2017.
"We're looking at re-development of the terminal at the moment so KRA could be factored in."
Kiwi Regional Airlines chief executive Ewan Wilson is disappointed with tickets sales and treatment by Queenstown Airport.
Next week the latest airline competitor will take its first commercial flight into the resort, with the airline expected to launch operations on October 27.
Airline chief executive Ewan Wilson said "overall we've been very disappointed with ticket sales (between Dunedin and Queenstown). We have been really surprised how poor they have been."
Wilson declined to comment on how many of the 34 seats on the SAAB 340A had been sold for the launch flight.
He said they were also "very unhappy" it had been allocated Gate 1 at Queenstown Airport, which was "miles away from the terminal" and unclearly marked for passengers.
"We have some real issues with Queenstown Airport's logistics," Wilson said.
He believed they were acting "bullish" and "don't seem hungry for new clients", he said.
"We will try hard to convince them every client is important."
However, Airport Corporation operations general manager Mike Clay said Gate 1 was assigned to the airline as it was "specifically designed for Turboprop aircraft".
"The gate is designated for passengers not required to be screened for domestic flights (under 90 seats) and is conveniently located next to Airspresso café in the main terminal concourse.
"It's approximately an extra 10 metre walk for passengers from the aircraft to the terminal."
Clay said it was disappointing to hear Wilson's comments.
"We welcome new airlines and routes and have offered Kiwi Regional Air the same facilities, terms and conditions as our other scheduled airlines," he said.
On Monday the airline's crew underwent "proofing" with Civil Aviation Authority regulators along its proposed route.
The proposed flight route included flying from Queenstown to Dunedin and back then onto Nelson and Hamilton.
The company was expecting to be given its Air Operations Certificate this week, which would allow it to apply for its regulatory approval certificate to fly commercially.
Wilson said he was confident the airline would make the launch date.
Flights would depart Dunedin for the 40 minute trip to Queenstown at 7.15am and 5.20pm on weekdays, 7.15am on Saturday and 5.20pm on Sundays.
Flights would then return to Dunedin from Queenstown at 8.25am and 6.30pm on weekdays, 8.25am on Saturday and 6.30pm on Sundays.
An old tractor might be useful on a farm, but at Nelson Airport it's a different story.
The arrival of a 40-year-old Massey Ferguson tractor on the tarmac has caused a stir after it was rejected by the Airport Company to tow luggage for new airline Kiwi Regional.
Kiwi Regional Airlines chief executive officer Ewan Wilson called the Nelson Airport Company "ageist" for turning down the tractor he purchased especially.
"It's just ageism, it doesn't blow smoke and it may be slightly older than their other vehicles but Massey Fergusons have been the backbone of aviation for years," said Wilson.
"It's a beautiful classic thing. We were very frustrated and a little disappointed in the end."
Nelson Airport chief executive Rob Evans said the tractor could be used to tow Kiwi Regional's SAAB 340 aircraft, but it would be "cumbersome" to tow luggage carriers at the front of the terminal.
"Having that operating at our terminal is not at the sort of standard of engineering that we would expect from an airline. Quite frankly it's a [40] year old tractor, it's meant for the farm."
He said the tractor was not suitable when driven close to adults and children at the terminal.
The airport has provided Wilson with a modern electric cart to tow luggage while he finds an appropriate towing vehicle.
Wilson said he was disappointed that he was required to purchase a new cart.
"I think the decision was unjustified but ultimately they're the airport company and they make the rules," he said.
Meanwhile, the airline's SAAB 340 has performed its proving flight with the Civil Aviation Authority ahead of its first public flight next week. It flew to Nelson on Monday.
"We're really pleased with how the proving flight went," said Wilson.
He said he was waiting for an official notification to certify the plane was fit for commercial use and he expected to know within the next three days.
He said the was encouraged to see plenty of pre-bookings from Nelsonians travelling to Dunedin and Hamilton.
Kiwi Regional Airlines is touring the country a week out from the start of its scheduled commercial flights.
Bringing an opportunity to see NZ's newest Kiwi owned and operated airline, the Kiwi Regional Airlines SAAB 340A will leave from Hamilton and touch down in New Plymouth, Nelson, Christchurch, Dunedin and Queenstown to reposition ahead of its proving flight with the Civil Aviation Authority on Monday.
For aviation enthusiasts and the general public in New Plymouth and Christchurch, this may be their only chance for some time to see Kiwi's SAAB, with the initial route offering pairing Hamilton, Nelson, Dunedin and Queenstown.
"Ultimately we would like to be able to connect as many regional centres as possible, and the feedback we've been receiving from the public is that they would be very pleased if we could." said Ewan Wilson, the airline's CEO. "However we do have a unique opportunity ahead of our regulatory proving flight to land and enjoy New Plymouth and Christchurch, which we're really looking forward to" Wilson will be one of the passengers aboard the flight along with other Kiwi Regional Airlines staff.
"For our pilots it's a fantastic chance to put the SAAB through its paces and make a real journey out of it. It's also a great opportunity to touch base in a few different communities and tour a large part of the country." A non-affiliated Facebook page has been set up by New Plymouth residents calling for the airline to place it ou their route-map. The page is now almost at 1000 likes.
Air New Zealand will unveil 14 new domestic Koru lounges and six new international lounges as part of a $100 million spend-up over the next four years.
Since December the airline has opened new regional and international lounges at Auckland International Airport as well as a new international lounge at Sydney Airport.
A new international lounge is also under construction at Brisbane Airport and designs for new regional lounges are being developed for Palmerston North, Hamilton, Invercargill and Wellington.
The Wellington regional lounge is aimed at passengers travelling to regional destinations, but any passenger entitled to lounge access will be able to use the lounge when travelling domestically.
Air New Zealand lounges at Queenstown and Fiji's Nadi International Airport are also scheduled to be upgraded in 2016.
Air New Zealand spokeswoman Kelly Kilgour said over the course of 2017 and 2018 a further nine domestic and four international airports would be upgraded.
At the opening of the airline's sleek new Auckland international lounge last month, Air New Zealand chief executive Christopher Luxon said the timing of lounge upgrades was largely dependent on where airports were at with their expansion plans.
"You have to get the airport company to have the right building and the right construction in place to support a new lounge," Luxon said.
"Some of the airports in the regions are in expansion at the moment and we're just trying to make sure we align with their expansion plans."
Air New Zealand lounges were open to Koru members and business class passengers as well as Gold and Elite Airpoints members.
Tourism Industry Association chief executive Chris Roberts said Air New Zealand was responding to visitor expectations.
"We know that in general travellers have rising expectations of the level of service that's going to be provided to them."
"Travellers are getting more sophisticated and their expectations are growing all the time."
Air New Zealand had a popular and growing Koru membership, Roberts said.
The airline would not disclose how many customers had access to lounges or how many Koru members it had.
In June Invercargill Airport opened the first stage of its new $13m terminal building, which featured a temporary Koru lounge while stage two of the development was being completed.
Invercargill Airport general manager Chloe Surridge said the new lounge would be 120 square metres - about 50 per cent bigger than the original lounge.
The lounge would be a vast improvement on the previous facility, she said.
"We've got a lot of business travellers coming in and out of the airport so it's important that we've got a place where people can spend a couple of hours if they need to work."
Most regional airports were built in the 1960s or earlier and were looking at upgrading their facilities, she said.
Fliers will no longer feel like they are stepping back in time when boarding an Air New Zealand Q300 aircraft after the fleet received a $1 million interior spruce up.
The fomer light blue interior seating has been replaced with sleeker inky-hued seats with leather paneling. New carpet strips have also modernised the interior of the aircraft.
"The [Q300] fleet are about 10 years old, that's about half way through their life so it was the perfect time for a cabin refresh," said Air Nelson head Kelvin Duff.
"It's mirroring the look of all Air New Zealand aircraft, when you [board], the overall look and feel will be the same."
The interior installations are taking place in Nelson, with the airline's 23 Q300 aircrafts being re-fit in the Air New Zealand aircraft maintenance facility at Nelson Airport over the next three months.
Duff said it was great for Nelson to have the installations take place in the region. Each aircraft installation will take about 100 hours of labour to be completed during the night between flights to airports across New Zealand.
The maintenance facility, introduced earlier this year, created around 50 engineering jobs for Nelson.
"Whenever we get extra work here it's great, [the installation process in Nelson] reflects the decision to create the [maintenance facility]," said Duff.
About two Q300 aircraft fit-outs will be completed each week, with the entire fleet set to be finished by January.
"Over the next month customers will start to experience the new [interiors]," said Duff.
He hoped customers would find their flight experience more comfortable with additional contoured paneling on seats.
American airline United is returning to New Zealand with flights between Auckland and San Francisco as it deepens its partnership with Air New Zealand.
From next July, United will use Dreamliners to fly as often as daily across the Pacific in a deal between the Star Alliance partners that will boost capacity on the route and open the way for cheaper fares.
The deal could also deter American Airlines - from the rival Oneworld alliance and a potential threat to Air New Zealand - from entering the transpacific market.
Air New Zealand chief executive Christopher Luxon said his airline would work with United to promote each other's services on the San Francisco route. The airlines have anti-trust immunity to work closely with each other.
"Some provisions will move it forward to a structure around revenue-sharing and expand it geographically if we want to," Luxon said.
Air New Zealand is building a range of partnerships including with Virgin Australia, which it part owns, Japan's ANA, Cathay Pacific, Singapore Airlines, Air China and now deepening the 20-year alliance it has with United.
United Airlines is the world's biggest carrier by the number of cities served with 226 US cities and 136 international destinations on its network. It has around 84,000 staff.
"They are a massive organisation and have massive sales and distribution, which is what we are wanting to access," Luxon said.
United had hubs in San Francisco and Houston, where Air New Zealand would start flying to later this year.
"They've been very supportive of us coming in to Houston and getting them coming out of San Francisco is great because it gives us more connectivity through their network into domestic America."
Luxon said there was still strong and growing demand for flights to and from the United States.
"Our model of building market demand is working exceptionally well and we are finding new richer seams of gold and customers to tap into.
"This is a big way for us to be able to do this."
United will begin operating a three times weekly 787-8 service between San Francisco and Auckland from July, moving to daily services with a larger 787-9 aircraft from November 2016.
United pulled out of flying to New Zealand in 2003 after it was forced into what was then the airline industry's biggest bankruptcy.
Air New Zealand operates a daily service from Auckland to San Francisco, 18 return services per week from Auckland to Los Angeles, four services per week to Vancouver and four services per week to Honolulu, Hawaii.
From December 15 the airline will also commence direct services from Auckland to Houston five times per week.
Make no mistake; the gloves are definitely off again in the transtasman battle between Air New Zealand and Qantas which now has the biggest airline in the world to do some heavy hitting.
