Hong Kong Airlines responds to strong New Zealand-Asia demand by adding second daily seasonal flight

    Hong Kong Airlines is upgrading Auckland to a double daily service in late 2017, only one year after entering the New Zealand market.

    Hong Kong Airlines began competing with Air New Zealand and Cathay Pacific on the Hong Kong-Auckland route on 11-Nov-2016. It has since served the route with one daily A330-200 flight and for two months during the last summer season offered three extra weekly frequencies for a total of 10.

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    Hong Kong Airlines is adding seven weekly frequencies this summer for a total of 14. The seven extra flights this summer will operate from mid-December until mid-March. Last summer the three extra flights only operated from mid-December to mid-February. As a result, for the peak summer months Hong Kong Airlines’ capacity to New Zealand will be up over 40% year-on-year.

    The decision to add capacity to Auckland only a year after the route was launched is in response to higher than initially expected demand. Hong Kong Airlines assistant commercial director Michael Burke told Blue Swan TV on the sidelines of the 1-Aug-2017 CAPA Australia Pacific Aviation Summit the Auckland route has performed well due to strong support from the airline’s codeshare partners and strong transit traffic beyond Hong Kong.

    While Hong Kong Airlines has been heavily promoting connections to mainland China it has been also able to attract significant connecting traffic to India, Japan and Southeast Asia. Mr Burke said this “demonstrates New Zealand’s broad strength across the whole Asia region. It’s by no means just a mainland China story. We are very, very happy with how that’s going.”

    However, Mr Burke added it is challenging to fill the flight during off peak months and noted that New Zealand has a long off-peak season. Hong Kong Airlines is hoping to work with tourism authorities in New Zealand to stimulate demand during the off-peak months, which should result in higher year-round load factors. As Blue Swan highlighted last week, Hong Kong Airlines has a similar initiative underway in Australia, where it serves Cairns and the Gold Coast.

    See related report: Hong Kong Airlines aims to work with tourism authorities to improve off peak demand for Cairns and Gold Coast

    Auckland-Hong Kong is a highly competitive market. Air New Zealand offers daily year-round service on the route. Cathay Pacific operates one daily year-round flight, increasing to two daily frequencies during the peak months of December, January and February.

    The New Zealand-mainland China market also has become extremely competitive over the last few years. Seven airlines now offer nonstop services from Auckland to China, including Air China, Air New Zealand, China Eastern, China Southern, Hainan Airlines, Sichuan Airlines and Tianjin Airlines. Hong Kong Airlines is one of several one-stop competitors and offers connections to several secondary Chinese cities which do not have a nonstop link.

    Hong Kong Airlines also offers connections from Auckland to several secondary Japanese cities which do not have a nonstop link. Air New Zealand is the only airline operating nonstop flights from Auckland to Japan but only serves Tokyo year-round and Osaka seasonally.

    Chinese visitor numbers to New Zealand were flat in the year ending 30-Jun-2017 at slightly under 400,000 but more than doubled the four prior years. Hong Kong visitor numbers increased by 25% to 50,000; Indian visitor numbers by 13% to 52,000 and Japanese visitor by 7% to 101,000.

    Auckland to Hong Kong one-way weekly seat capacity by airline: Sep-2011 to Feb-2017

    Source: CAPA – Centre for Aviation & OAG