We have recently undertaken a comprehensive review of our regional network, including the routes that we service and the aircraft that operate these routes.
As a result of the review we will be making several changes including:
- Accelerating the introduction of new 68 seat ATR aircraft into our fleet allowing us to introduce additional capacity on routes currently operated by 50 seat aircraft, where sufficient demand exists
- Progressively winding down our 19 seat Beech aircraft operations and moving to larger 50 seat aircraft on routes where sufficient demand exists
- Suspending some regional services that are no longer economically viable to operate
- Introducing Regional Gotta Go fares, a new last minute fare option to and from regional centres
These changes will help us address customer concerns on price and ensure the future sustainability of our regional air services.
For more than two years Air New Zealand’s fleet of 19 seat aircraft has been losing more than $1 million a month, or the equivalent of more than $50 lost on every return fare sold. We’ve been carrying these losses while working with many regional stakeholders on initiatives to stimulate demand but despite best efforts, some regional routes are simply not sustainable. Therefore from April 2015 we will no longer fly between the following destinations:
Kaitaia - Auckland
Whakatane - Auckland
Whangarei - Wellington
Taupo - Wellington
Westport - Wellington
Palmerston North - Nelson
Hamilton - Auckland will also be suspended from February 2016.
In the case of Kaitaia, Whakatane and Westport this means we will no longer operate services to or from these airports beyond April 2015.
Kaitaia customers will be able to access services from Kerikeri. From February 2015 we will be moving all services to and from Kerikeri to larger 50 seat aircraft. By moving to larger aircraft we are able to offer significantly lower average fares than those currently offered on services to and from Kaitaia.
Whakatane customers will be able to access services from Tauranga and Rotorua; both have direct services to Auckland, Wellington and Christchurch. The number of seats available between Rotorua and Auckland will increase by a third. Tauranga is also well served and capacity is increasing by 18% across the direct services.
For our Westport customers Hokitika and Nelson will become your nearest airports. Hokitika will be moved from a 19 seat aircraft to a 50 seat aircraft in April 2016 providing more seats and cheaper prices. We acknowledge Nelson is further away but it does provide access to direct flights to Christchurch, Wellington and Auckland and cheaper fares.
With the suspension of the Taupo and Whangarei to Wellington services customers that wish to travel south from these destinations will be able to connect through Auckland. Alternatively, customers living in the Taupo region can access direct services to both Wellington and Christchurch from Rotorua airport. For customers travelling north from Taupo we will be introducing a larger 50 seat aircraft which will mean we have almost 70% more seats available and we expect to be able to reduce the average fare on this route by around 15%.
With the suspension of the Palmerston North to Nelson service customers will be able to connect through Wellington. There are two flights a day that connect on to Nelson.
Air New Zealand’s average regional airfare has not increased in the past five years. We are committed to regional New Zealand and in the past financial year we have offered close to 550,000 regional fares under $100.
We are also investing $300 million in 13 new and more efficient regional aircraft and more effort than ever before is being made to promote regional destinations to Kiwis and the world. Experience tells us that when we do this we can reduce the average fare on that route by 15%. This is good news for towns like Kerikeri, Tauranga, Rotorua, Taupo, Gisborne, Wanganui, Blenheim, Hokitika and Timaru.
In a further effort to offer affordable airfares to and from regional destinations we have designed a new fare product the Regional Gotta Go fare, which specifically addresses the issue of last minute prices.