The trans-Tasman travel bubble is providing Air New Zealand with a substantial boost in business. The airline has just released an operational update for April 2021. Australia is Air New Zealand’s biggest international market and with the travel bubble starting on April 19, Air New Zealand is beginning to reap the benefits of the bubble.
Big headline statistic, but business still far from normal at Air New Zealand
According to an operational update released on Monday, May 30, Air New Zealand carried 866,000 passengers in April 2021. This is a 5603% increase on the 15,000 passengers flown in April 2020.
In the all-important trans-Tasman market, Air New Zealand flew 51,000 passengers in April. That’s a 3188% increase on the 2,000 passengers carried in April 2020. Still, despite the headline statistics, dive a little deeper, and business is still far from normal.
Air New Zealand had 281 million available seat kilometers on its trans-Tasman services in April, but only sold 127 million of those available seat kilometers, giving the airline an average load factor of 45.1% on these services. While that is a big increase on the 5.5% load factors in April 2020, it is well shy of the 81.5% trans-Tasman load factors in April 2019. In that same month, Air New Zealand sold 860 million of its available seat kilometers on trans-Tasman routes.
Travel bubble not removing all barriers to travel
The relatively low average load factors across Air New Zealand flights once the travel bubble began suggests a travel bubble does not remove all the barriers to travel. After an initial flurry of flights and publicity, Air New Zealand, Qantas, and Jetstar all reduced planned services because demand was not meeting expectations.
While people have traveled in greater numbers, the assumption that hordes of people will travel just for the sake of it has not eventuated. Most people still usually have a reason to fly.
Demand for travel to New Zealand remains higher than demand for travel from New Zealand. The travel bubble has also suffered some hiccups along the way. New Zealand is setting temporary “pauses” on flights to and from Western Australia, New South Wales, and an ongoing suspension of quarantine-free flights to Melbourne. These hiccups will influence load factors. It should also be noted Air New Zealand operated trans-Tasman flights across all of April, and the two-way travel bubble only come into effect on April 19.
Winter holidays may boost trans-Tasman demand
But Air New Zealand may see load factors improve with the onset of winter. Most winters, there is a steady flow of business from Australians heading to New Zealand’s ski fields. In the opposite direction, sunny Queensland will pull in a few chilled Kiwis. Anticipating this, in addition to flying into the Gold Coast and Brisbane, Air New Zealand is due to start flights to the Sunshine Coast and Cairns in June.
Of the 866,000 passengers Air New Zealand flew in April, 811,000 of those were domestic passengers. Take out the passengers flying across the Tasman. That leaves just 4,000 passengers spread across the remainder of Air New Zealand’s long-haul international operations in April 2021, 1,000 passengers fewer than flown in April 2020.
Passenger loads on flights to and from Asia in April were averaging 10.5%. Flights to North America fared better, with April passenger loads averaging 52.4%. Cargo is helping underwrite many of Air New Zealand’s international services. But the airline also decided in 2020 to maintain a strategic international presence around the Pacific rim.
With a full month of trans-Tasman flying to report, the operational update for May will make interesting reading.
Will load factors improve as the flights and schedules settle? What do you think? Post a comment and let us know.
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