Air NZ set to ditch Virgin stake

Analyst says New Zealand airline is faced with a choice -- either tip more money in or get out now.

By Grant Bradley

Air New Zealand is set to bail out of its 26 per cent stake in Virgin Australia just over a week after agreeing to lend it close to $150 million and after years of spending close to half a billion dollars building up its holding.

At Virgin's current share price Air New Zealand faces a loss on its investment but selling down its stake is seen by analysts as being positive for the Kiwi carrier.

Although the airline is understood to be concerned about the scale of its commitment to Virgin relative to its own size, it is not seen as a desperate vendor and there are other large airline shareholders which could be potential buyers.

One analyst said the New Zealand airline was faced with a choice -- either tip more money into Virgin or get out now.

In an announcement which surprised the market, Air New Zealand said it was exploring options which could include a possible sale of all, or part, of its shareholding.

"Air New Zealand does not want a large minority equity position in Virgin Australia as it focuses on its own growth opportunities," said chairman Tony Carter.

Air New Zealand chief executive Christopher Luxon will quit Virgin's board immediately.

Andy Bowley, head of research at Forsyth Barr, said: "You either put more money in the pot which is increasing your investment and therefore your risk or you walk away."

Air New Zealand had to weigh up the choice of owning an equity stake in Virgin versus the financial reality.

While Virgin's financial performance had improved in the past year, it was still heavily indebted and the loan -- which was part of a $476 million loan announced last week -- was to help repair its balance sheet.

Virgin's debt is forecast by analysts at Merrill Lynch to balloon from around A$1.7 billion to more than A$2 billion in the next year.

First NZ Capital and Credit Suisse are advising Air New Zealand on options for its Virgin holding.

Air New Zealand shares closed up 1c at $2.86.

In its announcement yesterday, Air New Zealand said Virgin Australia has undertaken a successful transformation programme. However, early last year Luxon had expressed some frustration at how long it was taking the Australian airline to become profitable.

Since doing an alliance deal in 2010, Air New Zealand gradually built up its stake in Virgin which was seen as a way of exerting greater control over the airline which was seen as important in regaining a presence in the Australian domestic market after its disastrous Ansett foray and helping both airlines rationalise their transtasman operations.

Air New Zealand has spent around $480 million building up its stake of 914 million shares in Virgin. Before Virgin entered a trading halt yesterday Air New Zealand's stake was worth $381 million, according to Deutsche Bank analysis which said a divestment would be positive for Air New Zealand.

"Notwithstanding value already lost, we view the potential sale as a positive given the quantum of capital released to Air (NZ) and the lack of visibility regarding future returns from the shareholding. While Virgin has made progress in recent times, there have been no dividends paid to Air NZ and there is a chance Virgin will require more capital in the future."

Air New Zealand could use the capital in its own operations, or to degear the balance sheet.

Etihad Airways is Virgin Australia's second biggest shareholder with a 24 per cent stake. Singapore Airlines holds the third biggest stake, at 15.6 per cent, while Virgin Group has a 10 per cent shareholding.

The two airlines are seen as potential buyers of the Air New Zealand stake although ownership rules in Australia could trigger a full takeover.

Grant Bradley

Aviation, tourism and energy writer for the Business Herald

Thursday, 31 March 2016

US air fares plunge - $699 return

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11614053 By Grant Bradley

A travel agent is offering return seats from Auckland to Los Angeles for $699 and add-on fares to New York, Chicago or Miami for just another $10.

Helloworld is selling 200 seats aboard American Airlines' new service at the cut rate price - $100 lower than those announced yesterday.

The agency is selling the seats as a loss leader and helloworld general manager of marketing David Libeau said he expected them to sell out quickly.

``These prices are not sustainable long term but this is fun while it lasts,'' he said

``At $699 round trip to LA I would be surprised if we see anything lower in the market but you never know. These are loss leaders to drive business on the North American route and drive market share.''

Those opting for the $10 add-on flights further east must pay for accommodation or a cruise to the value of $500 or more.

Travel is between October 15 and December 15.

``The market is very competitive right now which has been driven by increased competition on the North American routes, particularly with American Airlines (to LA) and United Airlines (to San Francisco ) about to commence nonstop services from Auckland,'' said Libeau.

``This has driven a frenzy of sales activity which is great for the consumer while it lasts.''

American Airlines yesterday released Auckland-Los Angeles $799 return fares for later this year.

The airline, which has teamed up with partner Qantas to take on Air New Zealand on the route, will start flights in June using a Boeing 787-8 Dreamliner.

The fares are for travel between October 15 and December 15 and go on sale to midnight on April 1.

Travel is between October 15 and December 15.

`The market is very competitive right now which has been driven by increased competition on the North American routes, particularly with American Airlines (to LA) and United Airlines (to San Francisco ) about to commence nonstop services from Auckland,'' said Libeau.

``This has driven a frenzy of sales activity which is great for the consumer while it lasts.''

American Airlines yesterday released Auckland-Los Angeles $799 return fares for later this year.

The airline, which has teamed up with partner Qantas to take on Air New Zealand on the route, will start flights in June using a Boeing 787-8 Dreamliner.

The fares are for travel between October 15 and December 15 and go on sale to midnight on April 1.

"Five years ago return airfares on sale to LA retailed at between $1500 and $1600, double the cost of the airfare we have available through American Airlines from today. Increased capacity and competition among airlines continue to push airfare prices down - we believe this deal will be extremely well-received by Kiwis and is a sign of airfare pricing to come,'' House of Travel commercial director Brent Thomas said

Erwan Perhirin, American Airlines vice president, Asia Pacific said he expected competition to remain intense.

"It's one example of what choice and competition will bring to the market," he said.

This has allowed us to expand our footprint without investing in new capacity. We didn't have the aircraft to get into the route.

American Airlines is the world's biggest emerged from bankruptcy protection in 2013 but since its merger with US Airlines, restructuring and tail winds from lower fuel costs has made record profits and is growing aggressively.

In the past three years it has ordered 1000 new aircraft and is adding new planes to its fleet at the rate of two a week.

Perhirin said since announcing it would re-enter the New Zealand market, after a gap of 24 years, demand for its flights had been strong.

Airlines have struggled to make the transpacific market pay in the past, including Qantas which pulled out of the Auckland-Los Angeles route four years ago.

However, Pershirin said his airline was confident about the business case this time around for the flights which will be daily for much of the year.

"We don't go into a route without the full expectation and commitment to succeed and while pricing is one thing what we'll be focusing on is competing on product and service."

The American Airlines Dreamliners have a business class cabin with lie flat beds and offer wifi throughout the plane for US$20 a flight. It was also relying on the expertise of its revenue partner, Qantas.

"Working with Qantas, adopting best practices, tailoring the product and service offering to local expectations is going to be part of winning a long term viability," he said.

Stephen Thompson, Qantas senior vice president Americas, NZ, Pacific Islands and Japan, said his airline didn't have the right plane when it last flew here so struggled and crucially, wasn't able to use a partner's aircraft.

"This has allowed us to expand our footprint without investing in new capacity. We didn't have the aircraft to get into the route," he said.

The Australian airline has expanded in New Zealand with Jetstar flying into regional routes meaning passengers were able to fly on routes such as from Nelson to New Orleans more seamlessly on the Qantas-American partnership.

Sean Berenson, Flight Centre NZ general manager product said there had been considerable movement in the last six months with new carriers entering the New Zealand-US market and a marked decrease in pricing.

A couple of years ago a good tactical fare would have been around $1599.

``I imagine we'll see pricing continue to become ever more competitive on this route and its likely we'll see fares being really good day in and day out as opposed to really good tactical fares less often.''

Grant Bradley

Aviation, tourism and energy writer for the Business Herald

Thursday, 31 March 2016

Kiwi air links boom - Who's flying here now?

Fasten your seatbelts, kiwis: our airline connections to the rest of the world are improving and quite dramatically lately.

Here's a look at the new airlines and destinations, offering a huge range of new travel options.

A number of global carriers have made big announcements about routes into and out of New Zealand lately. Not only do we have more choice, but airfares are getting cheaper and the level of onboard luxury is improving.

American Airlines

Just this week, American Airlines said it would slash prices on the Auckland-Los Angeles route, releasing limited highly competitive $799 return fares for later this year.

Passengers from Wellington and Christchurch can travel via Auckland for another $100 each. The Wellington travel period is from October 17 to December 15 and the Christchurch window between October 15 and November 30.

AirAsia X

Just last week, budget carrier AirAsia X held a big event in Auckland and it has started a service that will substantially boost capacity to the Gold Coast and on the airline's home base, Malaysia.

The airline launched with $99 promotional economy fares from Auckland to the Gold Coast and $249 to Kuala Lumpur with travel agents predicting the increase in capacity will keep a lid on prices to both destinations.

AirAsia X's network covers Southeast Asia, North Asia, India, Australia and now New Zealand. Its key hubs are in Kuala Lumpur, Singapore, Jakarta, Bali, Bangkok, Delhi, Bengaluru, Manila and Tokyo.

This will provide more choice for New Zealanders travelling to those destinations and capacity for tourists from Malaysia, India and Indonesia, markets which are growing rapidly.

Emirates

The Dubai-headquartered airline's non-stop to Auckland-Dubai route means passengers can knock more than three hours off a flight which had been routed through Australia previously and more significantly on to Europe. The new direct flight was launched as the world's longest, taking more than 16 hours to get from here up to Dubai.

Hawaiian Airlines

This airline is offering highly competitive deals. The Honolulu-based airline has been flying to Auckland for about three years but already sees the potential for more capacity.

Air New Zealand

Our national carrier started flying to Buenos Aires and Houston in December and begins seasonal flights to Vietnam this winter. From June to October, Air New Zealand will fly three times a week from Auckland to Ho Chi Minh City's Tan Son Nhat International Airport with the potential to expand the season in subsequent years.

Philippine Airlines

Philippine Airlines is now flying to Auckland from Manila, with the potential to bring nearly 65,000 tourists a year to New Zealand. It will be the first time the airline has operated to New Zealand. Philippine Airlines will operate four days a week using an Airbus A320 with a stopover in Cairns, Australia.

Anne Gibson

Property editor of the NZ Herald

Thursday, 31 March 2016

Christchurch airport 'ticks a box' in building 200-room Novotel for short stays

Christchurch airport is "ticking a box" for short-stay accommodation with plans to build a 200-room Novotel hotel for late-night flyers.

The airport company is spending $80 million on the 4.5 star hotel, set to open by the end of 2017. It confirms details of hotel plans first announced in 2015.

Christchurch International Airport chief executive Malcolm Johns said the Novotel ticked a box for the city, which needed more short-term accommodation around the airport.

Many flights from Asia and Australia arrived in the evening and travellers expected to be able to stay within walking distance of the terminal, he said.

The hotel would be between the terminal building and part of the existing long-term car park.

Airlines were regularly asking what hotels Christchurch was developing to fill the shortage after the earthquakes, he said.

The airport had been handling a raft of new arrivals from Singapore Airlines, China Airlines, China Southern Airlines, Qantas and Virgin.

The airport was on target to reach 6.3 million passengers for the full year - up from 5.9 million the year before - and tourism numbers were expected to keep rising next summer.

Still, the average time that visitors stayed in Christchurch was one night, compared to two nights before the earthquakes.

Johns said estimates from Christchurch and Canterbury Tourism suggested the city was short of 800 hotel rooms and airlines saw the lack of accommodation as a "big risk".

Airlines had asked for up to 400 additional rooms near the terminal but the airport company had decided 200 was enough for now, he said.

It had considered factors such as estimates for passenger growth, tourism and the likelihood of more hotels being built in the central city.

Passenger numbers would have to rise again sharply before the airport added those extra rooms or built another hotel on its property, Johns said.

The airport has also spent $10m on a 280-bed Jucy Snooze backpackers beside its Spitfire Square retail precinct.

It has developed several commercial and industrial precincts on its property and last year looked at the feasibility of a 300-room hotel at the airport. After doing market research and taking independent advice it decided to build a 200-room hotel.

Christchurch and Canterbury Tourism chief executive Vic Allen said the hotel would hopefully encourage other hotel developers to build down town. They would want to be sure of year-round trade before they started building there, he said.

"It should send a message that the airport is very confident of the tourism flows."

Airport spokeswoman Yvonne Densem said Novotel would lease the hotel for 10 years on one of its standard hotel management contracts. Christchurch Airport's $80m for the development would cover the cost of the land, services, buildings and fittings.

She said over the past two years the airport had worked to ensure Christchurch was capturing its share of the growing tourism industry.

About 800,000 airline seats a year had been added by airline serving the airport, a growth rate of about 10 per cent.

"We expect to see growth continue over the next few years and with it growing opportunity for the Christchurch tourism sector."

Novotel has more than 450 hotels in 61 countries and this would be its ninth in New Zealand. The chain is part of the AccorHotels group which has 3700 sites in more than 90 countries.

 - Stuff

TIM FULTON

Last updated 17:48, March 31 2016

Kiwis say Air New Zealand NZ's most reputable company

Air New Zealand has proven it is still a people pleaser by reclaiming the top spot as the nation's most reputable company.

Car manufacturer Toyota was ranked second in the 2016 NZ Corporate Reputation Index after topping the survey in 2015 and 2013.

It is the third year running both organisations have been in the top two places on the index which has been produced for the past six years by research consultancy AMR.

The survey measures how New Zealanders view the country's top 25 companies across seven reputation drivers: products, innovation, workplace, citizenship, governance, leadership and performance.

It then ranks them according to people's emotional reaction.

Sky TV came in the bottom of the heap falling two places to 25th.

The pay television company came under fire in recent months with customers threatening to cancel their subscription after it rolled out a decoder software upgrade with new interface design, which some users found difficult to read and lagging.

Air NZ has previously ranked third in 2013 and first in 2011 and 2012.

The public were particularly impressed with Air NZ's fare prices, new planes, financial results, positive service experiences and famous safety videos.

Air NZ has a 3.7 out of five star rating on Glassdoor - a website which allows employees to rate their employer.

The airline also frequently has passengers raving on social media about its high standard of customer service and quality product offering.

AMR managing director, Oliver Freedman said Air NZ and Toyota's reputation success came down to high quality and innovative products and services.

"This perception is not new; it has been built over many years through consistent delivery," Freedman said.

Both organisations were good examples of how a consistently strong customer experience, along with leadership and transparency could result in long-term reputation benefits, she said.

"Reputation is not something that is built overnight – it is years of effort and hard work."

Big box retailer The Warehouse also performed well moving up one place to third spot.

Vodafone was the most improved with its reputation ranking jumping from 20th in 2015 to 9th.

The telco's reputation took a dive between 2014 and 2015 due to a decline in perception among customers, particularly around customer service.

Dairy giant Fonterra's reputation declined from 17th in 2015 to 23rd this year largely due to ongoing issues with farmgate milk prices.

REPUTATION RANKINGS

1 Air NZ

2 Toyota

3 The Warehouse

4 Z Energy

5 New Zealand Post

6 ASB

7 Foodstuffs (owner of New World and Pak 'n Save and Four Square)

8 Zespri

9 Vodafone

10 BNZ

11 Fulton Hogan

12 Meridian Energy

13 Genesis Energy

14 ANZ

15 Progressive Enterprises (owner of Countdown)

16 Fletcher Building

17 Westpac

18 TrustPower

19 Spark

20 Contact Energy

21 BP New Zealand

22 IAG New Zealand (owner of State, AMI, Lumley and NZI)

23 Fonterra Co-operative

24 Exxon Mobil New Zealand

25 Sky TV

Sign up to receive our new evening newsletter Two Minutes of Stuff - the news, but different

 - Stuff

JOHN ANTHONY

Last updated 10:35, April 1 2016

Jetstar and Air New Zealand regional fare war slashes some prices by 40 per cent

Airfares to Nelson, Napier, New Plymouth and Palmerston North have fallen sharply since budget airline Jetstar started flying to regional centres in December.

But the fare cuts don't always live up to the dramatically low discounts New Zealanders were promised by Jetstar.

When Qantas-owned Jetstar announced it would expand its network to the regions using a fleet of five 50-seat Bombardier Q300 turbo-prop aircraft Qantas chief executive Alan Joyce said regional fares could be slashed by 40 per cent.

The move immediately triggered a price war between Jetstar and Air New Zealand, which had previously enjoyed a monopoly on most regional routes.

Both airlines started selling thousands of tickets to the regions for as low as $9.

Nearly four months later one-way regional fares have settled to start at $29 on Jetstar and $45 with Air NZ.

House of Travel commercial director Brent Thomas said competition from Jetstar had driven prices down, but they were not 40 per cent cheaper across the board.

During high demand travel periods - such as peak business hours in the morning and afternoon - regional airfares had not become much cheaper, he said.

But there were pockets of travel times where airfares had become at least 40 per cent cheaper, he said.

"There has definitely been a downward shift in pricing."

Aviation commentator Irene King said travellers wanting the cheapest airfares should consider flying one airline one-way and return on the other.

"Consumers just need to be savvy and shop around," King said.

There was a perception that Air NZ's airfares were more expensive than Jetstar's but that was not always the case.

"Largely that's right but it's not always true."

King said Tuesday and Wednesday were the best days of the week to book for travellers wanting to snap up a deal.

"For some reason people don't like to travel on a Tuesday or Wednesday. Bookings are always much much lighter at that time of the week."

Booking travel for mid morning and early afternoon, six to eight weeks in advance, would usually get the best pricing, she said.

Airfares to the regions booked six weeks in advance and at non-peak times show Jetstar to be between $20 and $30 cheaper than Air NZ.

Many customers would be happy to pay extra for full service on Air NZ.

Jetstar customers frequently come up against hurdles such as online and kiosk check-in systems not working and flights being cancelled.

In March Jetstar cancelled 10 out of 100 regional flights between Friday and Sunday due to two separate cases of pilot illness.

Tickets booked a week in advance for travel during peak business hours on Air NZ could be hundreds of dollars more expensive.

A 6.45am Air NZ flight from Auckland to Palmerston North costs $239 while on Jetstar the same flight at 8.25am costs $69.

An early morning Air NZ flight from Auckland to Napier costs $169 compared to Jetstar charging just $45.

 - Stuff

JOHN ANTHONY

Last updated 12:00, March 29 2016

Air NZ lends $146m crutch to Virgin

Air New Zealand is deepening its commitment to Virgin Australia, chipping in to a near half-billion-dollar repair job on the Australian airline's balance sheet.

With a 26 per cent stake in Virgin, Air New Zealand is lending Virgin $146.5 million as part of the $476 million package to strengthen the Australian carrier's liquidity while it undergoes a review of its capital structure.

Its three other major shareholders - Etihad Airways, Singapore Airlines and Virgin Group - are contributing on a pro-rata basis.

Virgin's debt is forecast by analysts at Merrill Lynch to balloon from around A$1.7 billion to more than A$2 billion in the next year.

Air New Zealand has invested hundreds of millions in building its stake in Virgin, further building equity in a rights issue more than two years ago and now the loan.

Asked whether it could be tapped for more funds, an Air New Zealand spokeswoman said: "This loan provides Virgin with some time [to] undergo a proper review of their capital structure."

Virgin shares closed up A3c yesterday at A38c, while Air New Zealand shares closed up 3c at $2.87. Virgin chief executive John Borghetti said the review would include an assessment of the best mix of debt and equity capital and initiatives to enhance cash flow and profitability.

His airline is emerging from a bruising domestic battle with Qantas and even though it announced a A$71 million turnaround in pre-tax profit analysts have highlighted high debt, slowing momentum and weak operating cash flow.

Besides its equity stake, Air NZ has a revenue share alliance giving it access to the Australian domestic market and both airlines the ability to rationalise their transtasman operations.

Last month Air New Zealand chief executive Christopher Luxon - a Virgin director - said his airline's strategic rationale for its relationship remained unchanged and he was encouraged by improved profitability.

"We have [shareholder support] and the improved performances have been really encouraging."

Grant Bradley

Aviation, tourism and energy writer for the Business Herald

Tuesday, 22 March 2016

Air NZ cars go electric

  Air New Zealand is buying 76 electric light vehicles, including 36 $80,000-plus BMW i3 cars for its sales force.

The airline says the switch to electric will save around 65,000 litres of fuel per year and it's creating what's believed to be the leading corporate electric vehicle fleet in New Zealand.

The BMW i3 was named New Zealand Car of the Year for 2015 and as well as being electric, it features a sustainable design with much of its interior and body made from the same carbon fibre as the fuselage of Air New Zealand's Boeing 787-9 Dreamliner fleet. They have a sticker price of $84,000 although the airline is likely to have got a fleet discount.

The airline is also purchasing 12 Mitsubishi Outlander plug-in hybrids for longer range trips and 28 Renault Kangoo Maxi ZE 100 per cent electric vans for use at airports. The Kangoo is not currently available in New Zealand making Air New Zealand the first local customer for this vehicle.

Air New Zealand chief executive officer Christopher Luxon says the fleet transition forms part of the airline's commitment to sustainability and carbon reduction across the business.

Related Content

Air NZ moves to electric car fleet

BMW i-cars production line

"Taking a leadership position in carbon management and reducing our emissions is a significant goal for us under our Sustainability Framework. We recognise the opportunity electric vehicles present both for New Zealand and our airline and we are making the most of the country's renewable electricity supply by transitioning our ground fleet off fossil fuels where we're able to."

The Air New Zealand fleet purchase is a signifcant boost for the electric vehicle sector here. Just over 1000 plug-ins have been sold here.

Transport Minister Simon Bridges said he was "incredibly excited" about the opportunities they provide for New Zealand.

"It's clear that EVs are the future and it's great companies like Air New Zealand recognise this. The benefits of increasing uptake of EVs are far-reaching. They reduce our reliance on imported fossil fuels, reduce fuel cost and enhance the efficiency of our renewable electricity networks."

The airline will get the first of its new electric vehicles later this month and aims to complete the fleet transition by the end of the year.

In addition to the introduction of electric vehicles, the airline has begun installing charging points at its key car parking sites to support the new vehicles. This is in addition to the charge points already installed at a number of the airline's customer parking facilities.

The airline is also changing over its airport ground service equipment to electric including golf carts and tractors. Where electric options don't currently exist the airline is working with Z Energy to purchase bio-diesel from its site under development in Wiri.

Grant Bradley

Aviation, tourism and energy writer for the Business Herald

Wednesday, 16 March 2016

Airline competition 'hotter than ever'

Cathay Pacific has a strategic agreement with Air New Zealand for flights between Auckland and Hong Kong.

While capacity is surging among existing and new airlines which is keeping a lid on fares or pushing them down, New Zealand is on course to seek agreements to allow links to more countries and through different routes.

This country has about 70 Air Services Agreements in place and has been signing them at the rate of about 10 a year.

Transport Minister Simon Bridges said he was likely later this month to seek cabinet approval for a tranche of new deals.

It's added competition that we've got to face and we'll do that against other carriers from China and the US that we didn't have a few years ago.

Cathay Pacific country manager Mark Pirihi

"The new Qatar flight is a great example of the necessity of getting these agreements in place. As soon as we learned that Qatar was interested we moved heaven and earth to get an ASA in place."

Auckland Airport estimates Qatar's new daily service will deliver 189,070 seats to the route and contribute $198 million to the New Zealand economy.

Bridges said his government was "on a mission" to increase the number of air services argreements to help boost the economy and provide more options for New Zealand travellers.

A veteran of the New Zealand long-haul airline market says he's never seen it so competitive and it is set to heat up as the government seeks new deals that could lead to more services.

Cathay Pacific country manager Mark Pirihi said there had never been so many options for travelers amid fierce competition.

"It's just getting stronger and that's reflected in the amount of capacity coming into New Zealand."

His own airline is introducing the world's newest widebody plane to this market later this year but now faces competition from another Middle Eastern carrier, Qatar Airways, which will begin direct services from Doha to Auckland in December.

Already this year Emirates has started daily direct flights between Dubai and Auckland, Malaysia's AirAsia X is weeks away from flying from Malaysia via the Gold Coast to this country, US carriers United and American Airlines will resume flying across the Pacific to this country in the middle of the year and Singapore Airlines will fly from Wellington to its home port via Canberra late this year.

Pirihi has worked for Cathay for 25 years and said inbound traffic was driving capacity in the first instance but Kiwis' ingrained and growing love of overseas travel habits were also driving demand.

``It's added competition that we've got to face and we'll do that against other carriers from China and the US that we didn't have a few years ago."

Cathay, whose strong passenger yields from New Zealand operations have contributed to the airline's best annual results in five years, increased capacity between Hong Kong and Auckland over summer. supplementing year round daily services with a Boeing 777 aircraft.

Pirihi said the airline was now working on its plans for next summer when it would use the Airbus A350XWB on the Auckland route. It is on track to be the first airline flying to this country to use the revolutionary new plane - which has several of the same features as the Boeing 787 Dreamliner.

Cathay Pacific has a strategic agreement with Air New Zealand for flights between Auckland and Hong Kong.

While capacity is surging among existing and new airlines which is keeping a lid on fares or pushing them down, New Zealand is on course to seek agreements to allow links to more countries and through different routes.

This country has about 70 Air Services Agreements in place and has been signing them at the rate of about 10 a year.

Transport Minister Simon Bridges said he was likely later this month to seek cabinet approval for a tranche of new deals.

It's added competition that we've got to face and we'll do that against other carriers from China and the US that we didn't have a few years ago.

Cathay Pacific country manager Mark Pirihi

"The new Qatar flight is a great example of the necessity of getting these agreements in place. As soon as we learned that Qatar was interested we moved heaven and earth to get an ASA in place."

Auckland Airport estimates Qatar's new daily service will deliver 189,070 seats to the route and contribute $198 million to the New Zealand economy.

Bridges said his government was "on a mission" to increase the number of air services argreements to help boost the economy and provide more options for New Zealand travellers.

Grant Bradley

Aviation, tourism and energy writer for the Business Herald

Monday, 14 March 2016

NMIT aviation programme receives world class certification

Nelson Marlborough Institute of Technology's (NMIT) aviation engineering course has become the first in New Zealand to receive a new, internationally-recognised certification.

The aviation industry has lobbied the government for over five years to adopt the 'Part 147' licence, an amalgam of the Civil Aviation Authority's (CAA) current operating requirements and European Aviation Safety Agency training which aligns New Zealand with international aircraft maintenance standards.

NMIT's manager of aviation Raewyn Heta said the new certification would impact the majority of the course's 200 students.

"Any aviation engineering training organisation in New Zealand delivering a curriculum leading to the award of an aircraft engineering licence must now hold a 147 certificate, so for our students it is another positive outcome for their qualification.

"New Zealand has been behind the aviation world by not providing a regulatory environment for aircraft maintenance training that aligns with international best practice."

Many businesses, some of them major international airlines, previously avoided New Zealand aircraft engineering graduates because of its different aviation standards, Heta said.

She said it was also likely to make the polytechnic's course more attractive to international students.

An Air New Zealand spokesperson congratulated NMIT on its Part 147 certification and said it was good news for the company's regional maintenance base in Nelson.

Stuff

ADELE REDMOND

Last updated 08:24, March 18 2016

Qatar Airways coming to NZ - confirmed

Qatar Airways has confirmed it will begin a non-stop, more than 18 hour service between Doha and Auckland - set to become the world's longest flight - on December 3.

The airline will operate the daily flights with a Boeing 777, the same aircraft rival Middle Eastern carrier Emirates uses for its new direct service to New Zealand, which launched last week and is currently the longest commercial flight available.

New Zealand travellers will be able to use the service to reach European destinations such as London via Doha, Qatar's capital.

At 14,534 km, the Doha to Auckland route is slightly longer than the roughly 14,200 km Dubai-Auckland journey.

The Qatar Airways service is expected to take up to 18 hours and 30 minutes, compared with up to 17 hours and 15 minutes for the non-stop Emirates flight.

Qantas operates a Sydney to Dallas/Fort Worth service which covers 13,800 km and takes almost 17 hours.

The longest flight operated by Air New Zealand is Auckland to Houston, which covers 11,933 km and takes 14 hours and 30 minutes.

Emirates was expected to launch a service to Panama City later this month, which would have been slightly longer than the non-stop Auckland-Dubai flight in terms of duration.

The Dubai-based airline, however, has reportedly put that service on ice so it looks like the Auckland route will remain the world's longest duration flight until Qatar Airways starts flying to New Zealand at the end of the year.

Qatar Airways announced another 13 new destinations at a major travel fair in Berlin today, including services to the Italian city of Pisa, Sarajevo in Bosnia, Finland's Helsinki and Marrakesh in Morocco.

"These new destinations are where our customers want to go, and where we see the most opportunity to provide a best-in-class experience at great value," said Qatar Airways chief executive Akbar Al Baker.

Christopher Adams

The Business Herald’s markets and banking reporter

Thursday, 10 March 2016

Air NZ does revenue deal with United

Air New Zealand and United Airlines have entered into a revenue sharing agreement.

Under the deal the airlines will work together to promote and sell both airlines' services between New Zealand and the mainland United States, including domestic feeder services in both New Zealand and the United State.

The revenue sharing deal is similar to that Air New Zealand has with Virgin Australia, Cathay Pacific, Singapore Airlines and Air China.

United Airlines will begin services from San Francisco to Auckland service on July 1.

Air New Zealand and United have worked together since 2001 coordinating closely on codesharing, frequent flyer programmes and distribution.

The revenue share agreement will deepen this cooperation, the airlines say.

Subject to United Airlines obtaining government approval, it will begin operating a three-times-weekly Boeing 787-8 Dreamliner service between San Francisco and Auckland in July, moving to daily services operated by a larger 787-9 aircraft in November.

Air New Zealand chief executive Christopher Luxon said both the airline and New Zealand's economy stand to benefit significantly from the alliance.

"The United States is New Zealand's third largest tourism source market, contributing almost a billion dollars to our economy in the past financial year," he said.

"We know this is just the tip of the iceberg though, with around 30 million Americans actively considering New Zealand as a holiday destination."

United Airlines vice chairman and chief revenue officer Jim Compton said United was very excited about its agreement.

"Together, United and Air New Zealand will offer customers more seamless connections between New Zealand and cities across the U.S. than any of our competitors."

Air New Zealand currently operates direct to five North American cities with daily services from Auckland to San Francisco, double daily services to Los Angeles, four services per week to Vancouver and Honolulu, and five services per week from Auckland to Houston, increasing to daily flights during the December/January peak period.

Once United begins operating its Auckland-San Francisco flights the airlines will operate complementary services on the route, with United's flights arriving into San Francisco in the early morning and Air New Zealand's flights arriving around midday.

United Airlines and United Express operate an average of nearly 5000 flights a day to 342 airports across six continents.

In 2015, United and United Express operated nearly two million flights carrying 140 million customers.

Rival carrier American Airlines will start services in competition from Los Angeles to Auckland in June.

Grant Bradley

Aviation, tourism and energy writer for the Business Herald

Friday, 11 March 2016

Kiwi Regional Airlines plans to crowdfund $2 million for new plane

 

Kiwi Regional Airlines plans to raise up to $2 million through crowdfunding to buy a second aircraft.

The new aircraft would be a Saab 340 QC used for passenger and freight charters and as a backup for maintenance of its existing aircraft Saab 340A.

Last month the Hamilton airline cancelled flights after grounding the 34-seater aircraft for unscheduled maintenance.

While the Saab was out of action Kiwi Regional called in Air Chathams to run the service using its 50-seat Convair 580.

READ MORE: * Kiwi Regional Airlines plane grounded for repairs, Air Chathams steps in * Kiwi Air to test Taupo interest * Kiwi Regional Airlines announces alliance with Barrier Air * Kiwi Regional Air axes Queenstown to Dunedin flights * Kiwi Regional Airlines cancels flight, eyes second plane * Kiwi Regional Airlines not worried about having one plane, CEO Ewan Wilson says

The planned new aircraft would not be used to add capacity or new destinations.

Kiwi Regional launched in November and flies Hamilton, Nelson, Dunedin, Christchurch and Tauranga routes.

It cancelled a Dunedin-Queenstown service less than a month after launching.

Crowdfunding requires members of the public to donate money towards a project or business.

Some platforms allow pledgers to claim a stake in the project or company if the campaign successfully reaches its funding target.

Kiwi Regional chief executive Ewan Wilson said the fundraiser would be an equity crowdfunding campaign, meaning if the campaign reaches its target, pledgers would become shareholders.

No crowdfunding platform had been chosen.

"I find the idea of a community of New Zealand shareholders being a part of Kiwi Regional Airlines quite exciting," Wilson said.

There are eight crowdfunding platforms in New Zealand licensed by the Financial Markets Authority to let businesses sell shares to the public through their website

Wilson said having only one aircraft meant maintenance could be costly.

"When the aircraft breaks down we have to hire another one to be able to provide good customer service, that can be an expensive process to have only one airplane."

Vehicle importer and retailer 2 Cheap Cars originally owned almost a quarter of the airline but that was diluted as Kiwi Regional issued more shares.

2 Cheap Cars sold its remaining 10.4 per cent share in the airline to Andrew and Anne King of Hamilton.

King's investments include Kings Finance and Kings Cars. He is not a Kiwi Regional director or part of the airline's management.

More to come.

 - Stuff

JOHN ANTHONY AND KELSEY WILKIE

Last updated 10:47, March 7 2016

More Nelson jobs as Air Caledonie moves into Air NZ maintenance hub

The maintenance of New Caledonian aeroplanes in Nelson will mean 25 new jobs over the coming year has local bodies excited about opportunities for growth.

Air Calédonie became the first international customer of Air New Zealand's regional maintenance base on Sunday when its ATR42 aircraft arrived at the Nelson hangar, where Air New Zealand currently services its own Bombardier Q300 and ATR fleets.

Air New Zealand's chief operating officer Bruce Parton said the regional maintenance hub provides 187 engineering jobs, with 40 to 50 more jobs anticipated "as the third-party work comes on".

Air Calédonie will now undertake ten-year heavy maintenance for four of its aircraft in Nelson.

Air New Zealand spokesperson Anna Cross said the Nelson base was established with "a vision to make Nelson the preferred turboprob maintenance and overhaul facility in Australasia".

READ MORE: * Air New Zealand's flight attendant recruitment drive  * Air NZ has high hopes for Nelson hub * Air New Zealand Holidays stores closing * Air New Zealand flight diverted to Nelson Airport

About 50 local jobs were created when the maintenance hub opened in August last year, expanding on the 135 Air Nelson Engineering jobs already established.

The salaries for those jobs ranged between $80,000 and $120,000 and Cross said 25 upcoming engineering jobs would attract similar pay.

Nelson mayor Rachel Reese said she was thrilled at the news of more "well-paid, skilled jobs in the region".

"It's a big thing for Nelson. This is the type of employment we're really trying to attract so the regional maintenance base is a very important part of our community.

"Not only do we attract skilled employees to our region we also create exciting career pathways for our local young talent.  Alongside the new jobs is a focus on developing educational opportunities in aviation engineering."

Nelson Marlborough Institute of Technology [NMIT] director of marketing and international development Virginia Watson said NMIT offers the country's highest certification in aviation engineering outside of the Air Force.

"The whole industry is quite collaborative and it's a pretty exciting career for someone who is engineering minded. One thing we would like to see more of is school leavers going into that aviation engineering programme."

Watson said the fast-paced growth of Nelson Airport and skilled workers made the region an attractive area for aircraft maintenance, a sentiment echoed by Air Calédonie CEO Samuel Hnepeune.

"The close proximity of New Caledonia to New Zealand, together with the world-class facilities offered in Nelson and experienced turboprop engineers is a good proposition for our airline," he said.

 - Stuff

ADELE REDMOND

Last updated 17:49, March 8 2016

Nelson-Tasman tourism continuing to grow

" Recent summer statistics released by Nelson Tasman Tourism show strong growth in the region.

In December the total guests overnight increased by 7.7 per cent from the previous year, exceeding the national average of 4.7 per cent.

International overnight guests staying went up by 7.4 per cent, surpassing the national average growth by 6.2 per cent, while domestic guests increased by 7.9 per cent compared to national domestic growth of 3.8 per cent.

Nelson Tasman Tourism chief executive Lynda Keene said the statistics were encouraging.

"The fact we are exceeding national levels of growth at year-end December and the month of December is a good indicator of some of the region's successful marketing activities," she said.

The increase in airline competition at Nelson airport was also attributed to the boost in tourists to the region.

"Without a doubt, a key factor that has contributed to visitor growth has been Air New Zealand's increased marketing activities and the launch of new airline services; Originair, Kiwi Regional Airlines (KRA) and Jetstar." Keene said.

Originair began flying in August, KRA in October and Jetstar in December of last year.

"The region has received significant additional exposure by airlines with promoting Nelson as a new destination and we'll continue to work with them (airlines) to ensure the early growth trends with increased passengers will continue over the next twelve months," she said.

Official guest statistics for January and February won't be available for a few weeks but Keene said "on-the-ground indicators" from over the region seem to portray a successful couple of months.

The overall result is that yes, it is busier than last year," she said.

 - Stuff

TASHA LEOV

Last updated 12:01, March 4 2016

Demand could see bigger jet

Emirates is already eyeing the possibility of operating its new non-stop service into Auckland with an Airbus A380 super-jumbo, rather than the smaller Boeing 777-200LR that will be used at first.

Emirates is already eyeing the possibility of operating its new non-stop service into Auckland with an Airbus A380 super-jumbo, rather than the smaller Boeing 777-200LR that will be used at first.

By Christopher Adams

Emirates is already eyeing the possibility of operating its new non-stop service into Auckland with an Airbus A380 super-jumbo, rather than the smaller Boeing 777-200LR that will be used at first.

The Middle Eastern carrier's maiden non-stop flight from Dubai to New Zealand touched down at 10.33am yesterday.

In a last minute switch, Emirates decided to operate the inaugural flight with an A380 as a "special acknowledgement of the support" the airline has received from New Zealand. Subsequent services will be operated with a 777-200LR.

But Emirates president group services, Gary Chapman, said there was potential for the A380 to be used regularly on the non-stop route.

"As demand builds, and it's building very strongly, I can see a time when we have the A380 on it," said Chapman, who flew into Auckland on the inaugural service.

Emirates already operates three daily A380 services from Dubai into Auckland via Australia, as well as a daily Christchurch 777-ER service via Bangkok and Sydney.

Yesterday's special service means four Emirates A380s will be on the ground in Auckland for the first time.

Bigger jet on cards as demand on route builds, says airline.

The forward bookings have vindicated this decision. Gary Chapman, Emirates president group services (pictured)

Yesterday's inbound non-stop flight landed early, taking less than 16 hours to cover the 14,000km route.

But the return flight to Dubai - which left Auckland yesterday evening at 9.30pm - will take around 17 hours and 15 minutes, making it the world's longest duration flight until Emirates' first service from Dubai to Panama City later this month.

Chapman said Emirates was having discussions with Ohakea air force base, near Palmerston North, about the potential for its runway to be used as an "alternate" if A380 flights cannot land at Auckland. The current alternative is Christchurch, as Wellington doesn't have a long enough runway for the super-jumbos.

He said Christchurch was about 644km extra distance from Auckland, compared with 322km extra to Ohakea. "That means you have to carry extra fuel, and that has implications," said Chapman, a New Zealander who has been with the airline since 1989. "So if you bring that alternate closer then it makes the operation more viable [for non-stop A380 services]."

He said Emirates was already seeing strong demand for the non-stop flights to Auckland.

"The forward bookings have vindicated this decision," Chapman said. "By taking out Australia, you reduce the travel time by three hours and it enables people coming from Europe and the Middle East and Africa to have one stop into Auckland and vice-versa."

Emirates - the world's biggest long-haul carrier - has flown here for 13 years and its three daily A380 services have built its brand in New Zealand.

Christopher Adams

Herald

Thursday, 03 March 2016

Kiwi Regional Airlines plane grounded for repairs, Air Chathams steps in

 

Kiwi Regional Airlines Saab aircraft was replaced by Air Chathams older Convair 580 for a short time last week.

 Passengers have praised Kiwi Regional Airlines for the way it handled a grounded aircraft last week.

On Friday the Hamilton airline operator's only aircraft - a 34-seat twin turbo-prop Saab 340A - was grounded for unscheduled maintenance.

Kiwi Regional Airlines chief executive Ewan Wilson said there was a problem with a caution light used in pre-start procedures.

Kiwi Regional Airlines' Dunedin-Nelson and Nelson-Hamilton services were cancelled on Friday morning due to the grounding.

While the Saab was out of action Kiwi Regional Airlines called in Air Chathams to run the service using its 50-seat Convair 580.

"It's a stressful couple of hours at the office as you rejig things," Wilson said.

"Never seen an airline go out of their way to help, after a cancelled flight, like this before. Sorted us a new flight asap," Prinsloo said.

He said the service even beat that of Dubai airline Emirates.

Murray Horn congratulated the airline for finding "a mighty workhorse" replacement to keep passengers happy.

Wilson said Air Chathams ran most of Kiwi Regional Airlines' scheduled services on Friday and Saturday using its own pilots, cabin crew, engineers, fuel and catering.

"We just pay a sum and they run the service.

Passengers were offered a full refund, a next day flight or to be booked on alternative services.

Kiwi Regional Airlines would announce a new route network and schedule on Tuesday which would begin on May 14, Wilson said.

An announcement regarding a second aircraft would be made a few days later.

A second aircraft would join the fleet to provide back up to the existing aircraft and for charter services, he said.

It would not be used for extra capacity on regular passenger services.

 - Stuff

JOHN ANTHONY

Last updated 16:00, February 29 2016

Kiwi Regional Airlines announces new flights for Nelson

 

Increasing demand has seen Kiwi Regional Airlines put on extra flights from Nelson, including a new service to Christchurch and daily flights to Dunedin.

An extra flight will also be added to its Nelson to Tauranga route, which currently has two flights a week.

The new Nelson-Christchurch service will see Kiwi Regional Airlines (KRA) fly to the southern city twice a week.

Ewan Wilson was "keeping his cards close to his chest" about whether he had plans to get another plane.

KRA chief executive Ewan Wilson said it was an exciting time for the region.

"This is great news for Nelson. We can offer Christchurch for the first time. Nelson asked for a Christchurch service, the Nelson people asked and we delivered," he said.

Among the other changes KRA announced was a daily return flight between Nelson and Dunedin.

It will also  fly four times a week between Hamilton and three times a week between Tauranga and Nelson. It started flying the Tauranga to Nelson route twice a week last month.

The new services will start on May 14.

The changes are being made due to high demand in regional centres, especially flights from Tauranga to Nelson.

"In the last six months, we have sold well over 10,000 seats, and we will continue to look at how we can best meet regional New Zealand's needs," Wilson said.

The airline has one 34-seat twin turbo-prop Saab 340A.

Wilson said he was "keeping his cards close to his chest" about whether he had plans to get another plane, and said further announcements about the fleet would be made in the next week.

Nelson's central location meant the airline considered the region an important location.

"Nelson is very much our hub ... We are providing regional air services that the travelling public is demanding," Wilson said.

"We are pleased that residents in many regional centres have responded so well to our airline."

KRA started operating in October flying routes between Nelson, Dunedin and Hamilton. It cancelled a route from Dunedin to Queenstown early on.

KRA  also announced this year that it had partnered with Barrier Air which flies routes to Auckland, Kaitaia, North Shore and Great Barrier Island.

Increasing regional flights into Nelson will also help to boost and improve tourism for the district.

Nelson Tasman Tourism chief executive Lynda Keene said the expansion of the airline's regional air services was good news for Nelson.

"The fact that in the first six months of operation they have been able to evaluate which routes are working best and increase the frequency is really encouraging," Keene said.

"The Hamilton and Bay of Plenty catchment area is quite huge, it is really underrated, I think doing the direct links to and from Nelson is really going to grow for them."

Other airlines including Jetstar and Originair started flying to the regions last year.

 - Stuff

TASHA LEOV

Last updated 11:31, March 1 2016

How they'll shave time off longest flight

It'll be a long time in the air - but Emirates says its new Auckland - Dubai non-stop flight will use new technology and variable routes to make the trip as quick as possible.

By Grant Bradley

Emirates Airline's ultra-long flight from Auckland to Dubai will use smart planning and technology to shave as much time as possible off the 14,000km flight.

While the service will be one of the longest air routes in the world by distance, Emirates will be using flexible routes, which can vary by day, taking advantage of tail winds and avoiding head winds to reduce the time in the air.

The technology, combined with the elimination of an en-route stop in Australia, could shorten the time to Auckland by up to three hours.

It will also result in increased fuel economies - an environmental focus for Emirates.

The airline starts its first non-stop service from Dubai to Auckland on March 1, with the longer duration return leg departing the next day.

The new non-stop service will be operated by a Boeing 777-200LR and should typically take just under 16 hours from Dubai to New Zealand and 17 hours, 15 minutes in the other direction.

"Emirates continues to invest in innovative technologies, and we utilise best practices in optimising our flight planning systems, finding the best routes that take into consideration weather and current conditions to ensure we save time, fuel and emissions, while never compromising on the safety and comfort of our passengers and crew," said Geoff Hounsell, Emirates' vice president flight operations support services and air traffic management.

The non-stop flight will have a complement of 13 cabin crew and four pilots, allowing for rest periods.

Emirates has eyed the non-stop flight to New Zealand for about two years.

Two hours prior to flight departure, the most optimal route is chosen, but can still be updated during the flight. At all times there is a contingency flight plan, so if an unexpected event arises during the flight, there is an alternative routing available.

The non-stop flight will have a complement of 13 cabin crew and four pilots, allowing for rest periods.

New flexible route options have been a focus for the airline and Airservices Australia and Airways New Zealand have been key partners.

An aerial view shows Dubai international airport, home to the national carrier Emirates Airways. Photo / Getty Images

The majority of the Boeing 777-200LR flight will be in Australian-managed airspace, where Emirates has worked with Airservices Australia for the past decade to optimise routes, utilising the technology which will be applied on the direct Auckland route.

"The organised track system - AUSOTS - is well-proven and extending that programme so that it is specific to the Auckland-Dubai route will have significant benefits, without impacting the operations of other aircraft going to Australia," said Geoff Hounsell. Airservices Australia controls 11 per cent of the world's airspace.

"A number of our air traffic control and environmental specialists have worked with Emirates' flight planning team to help find them the most optimal east and west-bound routes which will link the flight into our existing Flex Tracks and user preferred route (UPR) zones." said executive general manager, air traffic control, Greg Hood.

Emirates' Boeing 777-200LR can fly up to a range of 15,555km with full passenger load of 266 - eight in First Class, 42 in Business Class, and 216 in Economy Class.

Airways New Zealand will guide the Boeing 777-200LR through the first and last hours of these ultra-long range flights.

Chief operating officer Pauline Lamb said Airways would offer new fuel-efficient arrival routes into Auckland and a high degree of flexibility using very efficient 'user-preferred routing', including the ability to review and change flight paths during the flight.

Airways manages more than 1.2 million air traffic movements per year within 30 million square kilometres of airspace across New Zealand, the Pacific Ocean and Tasman Sea.

Emirates' Boeing 777-200LR can fly up to a range of 15,555km with full passenger load of 266 - eight in First Class, 42 in Business Class, and 216 in Economy Class.

Emirates is the world's biggest long haul airline and has a fleet of 249 aircraft, including 74 double-decker Airbus A380s and 155 Boeing 777s, among them 10 Boeing 777-200LRs.

Grant Bradley

Aviation, tourism and energy writer for the Business Herald

Wednesday, 24 February 2016

Airport boss confident NZ can sustain tourism growth

Auckland Airport's financial fortunes are closely aligned with that of the overall tourism industry and it spends around $10 million to $15 million annually supporting tourism marketing for the country.

Auckland International Airport chief executive Adrian Littlewood said New Zealand still has plenty of capacity to grow tourism from its record levels achieved last year.

Visitor arrivals to New Zealand rose 10 percent to a record 3.13 million last year, and tourism has become the country's number one export earner, overtaking dairy which is in the doldrums. The sector has an aspirational goal of hitting $41 billion in total revenue by 2025, up from the $29.8 billion achieved in 2015.

Littlewood said while the goal is "quite a significant step up", it is achievable providing the industry works cohesively on growing the infrastructure to support that sort of rise in both volume and quality of international visitor who will stay longer and spend more. "We need to get it right."

Key opportunities identified in the 2025 tourism strategy are high value Chinese, international students, business events, cruise visits, emerging markets, and promoting Christchurch as a gateway and destination.

Auckland Airport's financial fortunes are closely aligned with that of the overall tourism industry and it spends around $10 million to $15 million annually supporting tourism marketing for the country while also lifting capital expenditure to deal with anticipated growth at the airport, the country's national gateway.

It signed a new memorandum of understanding in November with Tourism New Zealand to maximise the value of New Zealand's overseas visitor market, building on previous partnerships between the two. They'll focus on jointly identifying what's needed to boost visitor numbers from new and emerging markets and how best to invest resources.

Traditionally Auckland has been described as being at the bottom of the world but the world is round and Auckland is actually in the middle of a direct line between Tokyo and Buenos Aires.

Littlewood is critical the industry was too slow to respond to fast growth out of China and initially spent money in the wrong areas. In order to reach its target, New Zealand has to spread more visitors throughout the year rather than just in the peak summer months to ensure higher quality visitors enjoy the experience, he said.

Auckland Airport's own aspiration is to become a southern Asia-Pacific hub and Littlewood said it has taken a further step on that path with a stronger than expected period of expansion in air services. Six new airlines have commenced or announced services to Auckland in the past 12 months.

Achieving that desired hub status relies on a partnership with another international airline carrying a large population through Auckland onto South America or another destination, Littlewood said.

"Traditionally Auckland has been described as being at the bottom of the world but the world is round and Auckland is actually in the middle of a direct line between Tokyo and Buenos Aires."

Ireland, which is also a small country with 4.5 million people, has 8.6 million visitors a year and I don't think the people of Ireland feel those visitors are taking over the country.

A simple comparison against peer group countries suggests New Zealand still has capacity to grow, though it will require ongoing and close coordination between government and industry, he said. New Zealand is ranked number 67 in the world by visitation per capita and 107th by visitation per square kilometre.

"There are plenty of opportunities for this country but we will have to be receptive," Littlewood said. "Ireland, which is also a small country with 4.5 million people, has 8.6 million visitors a year and I don't think the people of Ireland feel those visitors are taking over the country."

Cheap fuel prices, more efficient modern aircraft, and a lower kiwi dollar are making long-haul flights to New Zealand more attractive to those people who have always wanted to visit here but thought it too expensive, he said.

In one example of where change is needed, Littlewood said there is no nationwide group view on hotel development. Providing detailed information on visitor forecasts to hotel developers would give them "a real handle before they put their money at risk," he said.

Improved visitor numbers have already led to commitments for a 20 percent increase or around 2,000 new hotel rooms in Auckland alone while the number of Airbnb properties in Auckland grew 260 percent, or 1,000 rooms, in the past year.

Auckland Airport has a 20 percent stake in the Novotel Hotel at the airport and 100 percent of the Ibis hotel. It's also just chosen a preferred partner, which it's yet to name, for a premium third hotel it will own with construction due to start later this year and will start planning next year for a fourth budget hotel.

Herald Monday, 22 February 2016