The Blue Swan Daily is live at the 2018 CAPA Wellington Aviation and Corporate Travel Summit. Catch up on some of the most thought-provoking discussions and keynotes from the morning sessions. Below is a snap shot of key quotes from some of our honoured guests in attendance to discuss what is affecting the industry in this part of the world.
CAPA – Centre for Aviation executive chairman Peter Harbison, commented:
- On the end of the Air New Zealand/Virgin Australiatrans Tasman alliance, stating: “One of the reasons Air New Zealand hasn’t launched local operations in Australia is the lack of access via Sydney. You cannot launch operations in Australia without access to Sydney”. Mr Harbison added: “Air New Zealand’s move to terminate the JV with Virgin Australia on the Tasman could have profound impact on the market. This will inevitably lead to an establishment of new routes, intensified competition, increase Virgin Australia/Tiger Australia capacity and potentially a price war”. Mr Harbison also noted: “Virgin Australia has a 15% market share on the Tasman, which is probably not where they want to be. They will look to improve this, especially on the Auckland-Sydney route, the most popular across the Tasman”. Since the split, Air New Zealand has announced a 15% increase in market capacity across the Tasman. “For a market which hasn’t increased in quite some time, this is considerable growth”, Mr Harbison noted.
- “15.4% of Wellington origin international passengers in 2017 required two or more transits to reach their international destination. The national average for New Zealandwas only 2.9%.”
- The rough correlation between GDP growth and global air traffic growth. In the last two years, GDP growth has reached approximately 2% however traffic growth increased by around 10%. This difference was due to lower oil prices, lower ticket prices and aircraft efficiencies. “While 2018 also looks reasonably good, higher oil prices will impact this and growth won’t be as significant”, Mr Harbison said.
BARNZ executive director Justin Tighe-Umbers, commented:
- On what today’s corporate traveller looks like, stating: “You now have a much more cost sensitive traveller, rather than just the historic business class traveller. Low Cost Carriers are changing the market”.
- On a new long haul route for Wellington, stating “the reality is that it’s just not there”.
- The importance of cooperation among tourism stakeholders. He said: “For a route to be successful, the full tourist package needs to be available. This includes accommodation, car and transport. It’s really important for the tourism stakeholders to work together and support tourism and corporate growth. Getting this right is extremely important”.
Orbit World Travel MD Paul Rennie, commented:
- On the corporate market in New Zealand. Mr Rennie stated: “For airlines to really tap into the corporate market in New Zealand and make a commercially successful service, it comes down to frequency. Our corporate travellers main focus is timing, rather than just cost”. Regarding challenges in the corporate market, he said: “The biggest issue is accommodation and rental car prices. People need to more open to the sharing accommodation market to lower cost of accommodation in New Zealand”.
Wellington Airport airline development manager Mike Vincent, commented:
- On the issues facing passengers at the airport. Mr Vincent stated: “Transport around Wellington is an issue. It’s getting harder and harder to get a taxi at Wellington Airport. We really do need to get the roads linking Wellington Airport and the city fixed. There is a big disconnect between the airport and the city”.
- Wellington aviation has seen “significant growth over the last eight years”. In 2017, the airport reported 16% growth of international passengers to Wellington.
Air New Zealand Group head of government & industry affairs Duncan Small, commented:
- On New Zealand’s tourism growth trajectory. Mr Small stated: “We have seen profound growth in the tourism industry in New Zealand. Tourism is a supply chain for us, however we need to tune the growth out, especially as we get closer to capacity constraints. We are therefore working hard to attract higher value tourists to New Zealand”.
- On key aspects to profitable growth, which he noted had three key focuses: “Alliances with good connections onwards from key destinations such as Houston and Singapore; Smart research which unlocks tourism markets with travellers who want to come to New Zealand; Cost control via having the right fleet”. On key alliances, Mr Small said: “Firstly, our alliance partners need to give us good onbound connectivity, as well as a customer proposition, which we can sell onto our customers and comparable to our own.” Regarding the recent announcement that Air New Zealand will not be renewing its partnership with Virgin Australia, Mr Small said: “They had not quite had their product aligned with Air New Zealand”.
- On Air New Zealand’s fleet investment, stating: “We’ve made a number of fleet investments including 14 Boeing 787 Dreamliners, and A321neos. This commits us into a mode of growth, which we have seen over the last five years and will continue for some time”.
Wellington International Airport CEO Steve Sanderson, commented:
- On future investment plans, stating: “Wellington Airport has made a NZD250 million (USD184 million)investment in infrastructure over the last five years, including: NZD60 (USD44 million) terminal redevelopment; NZD70 million (USD52 million) multi level carpark; NZD36 million (USD27 million) Rydges Airport Hotel; and NZD25 million (USD18 million) Taxiway Overlay”. Mr Sanderson added: “Wellington Airport continues to invest in innovation and efficiency, becoming the first airport in the world to test self drive air bridges. Wellington Airport intends on investing another NZD250 million over the next five years. These funds will be dedication to: Airfield improvements; baggage handling systems; fire station, seawall reconstruction; navigation aids; new hotels; and a second stage retail expansion”.