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Home / Business / Companies / Airlines

American Airlines returns to New Zealand skies: What's the outlook for air fares?

Grant Bradley
By Grant Bradley
Deputy Editor - Business·NZ Herald·
27 Oct, 2022 04:32 AM6 mins to read

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Downtown Dallas is centre of the huge Dallas-Fort Worth metroplex, which has almost 8 million people and the world's third-busiest airport. Photo / Supplied

Downtown Dallas is centre of the huge Dallas-Fort Worth metroplex, which has almost 8 million people and the world's third-busiest airport. Photo / Supplied

American Airlines is "all systems go" for the launch of summer daily flights between Auckland and Dallas-Fort Worth, which could lead to an expansion of services here.

The world's biggest airline by fleet size, number of passengers transported and revenue per passenger mile starts the service between Auckland and Texas next week after it suspended operations here when the pandemic hit in 2020.

Rhett Workman, American Airlines' managing director for Europe and Asia-Pacific, said the new service would test the market for a possible extension of flights beyond the summer peak season.

Christchurch to the US was on the radar before the pandemic, and remained a possibility as American kept in touch with the city's airport during the past two years.

Six years ago American started flying into Auckland during summer and had been eyeing extending the season. The airline would again assess that possibility.

''I think that's something we're going to carefully watch, with our aircraft deliveries coming online and then obviously looking at the market uptake, which is very promising,'' said Workman.

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''We want to make certain when the time is right to come back into markets that we are not only a good business partner, but also a good sustainability partner.''

Downtown Dallas is centre of the huge Dallas-Fort Worth metroplex, which has almost 8 million people and the world's third-busiest airport.  Photo / Supplied
Downtown Dallas is centre of the huge Dallas-Fort Worth metroplex, which has almost 8 million people and the world's third-busiest airport. Photo / Supplied

He said crew were competing to be on the Auckland route.

"We're all systems go. There's a lot of excitement and not just for our customers but all our whole team. [For] our flight crews and flight attendants there's competition to get on this route."

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Dallas-Fort Worth (DFW) is American's biggest hub and passengers can connect to 235 destinations through the airport to other parts of the US, Europe, the Caribbean and Latin America.

DFW to Auckland was due to launch at the end of 2020 as a seasonal service but was suspended because of the pandemic.

American also quit its Los Angeles -Auckland flights launched in 2016, and shelved plans for LA-Christchurch flights planned for late 2020.

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Seasonal daily services this summer will operate until March 25. The airline will operate a Boeing 787-9 aircraft with Business, Premium Economy and Economy cabins.

The airline launched the service with promotional fares for return flights to many cities in the US through Dallas Fort-Worth starting at the pre-pandemic level of $1442.

Return Premium Economy starts at $2995 and Business at $6755 for flights starting from November 1. The peak Christmas season and January period is excluded.

Business Class aboard an American Airlines Dreamliner.  Photo / Grant Bradley
Business Class aboard an American Airlines Dreamliner. Photo / Grant Bradley

Workman said promotional fares were being used to stimulate the market, especially for Kiwis who experienced tough travel restrictions during the pandemic and may have previously been reluctant to fly.

"We're putting out some great fares to entice the Kiwis to come visit with us. Those fares will stay in the market for as long as we can," he said.

"I think we're seeing some really solid future bookings on this flight...There's a case of pent up demand, definitely coming from the US to New Zealand and I think we'll see some of that coming from your way as well."

There were big opportunities for New Zealand tourist operators and exporters.

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Auckland Airport calculated that every Boeing 787 Dreamliner touching down daily on average contributed $157 million in tourist spending and carried $500 million worth of freight over a 12-month period.

Pre-pandemic, up to 56,000 visitors a month came from the US, then New Zealand's third-biggest tourism market.

Passenger loads were likely to be heavier heading southbound.

"I suspect that there's probably more US travellers coming your way. The US has been much more open from a Covid perspective for a longer period of time."

Workman said having worked closely with the Government and airports, it was obvious New Zealand took a more cautious approach over the past couple of years.

The Economy cabin of an American Airlines Dreamliner.  Photo / Grant Bradley
The Economy cabin of an American Airlines Dreamliner. Photo / Grant Bradley

He said US travellers heading to New Zealand were coming from cities throughout American's domestic network.

US customers were really attuned to international travel and spread their wings across Europe quite broadly over the past northern summer, he said.

"They're ready to go."

In spite of high demand, American Airlines' international rebuild is being limited by the delivery of new aircraft and how quickly it can hire crew.

Workman said it would take up to two years to get back to where the airline wanted to be with Boeing 787 deliveries.

Rhett Workman, American Airlines' managing director for Europe and Asia-Pacific. Photo / Supplied
Rhett Workman, American Airlines' managing director for Europe and Asia-Pacific. Photo / Supplied

It has ordered 50 Airbus XLR aircraft, the first of which will enter service later next year and be capable of European flights.

"That will liberate some787s for other parts of our global network. As those aircraft deliveries come in, we're going to continue to spread our wings."

American's third-quarter results showed it generated record quarterly revenue of US$13.5 billion (NZ$23.5b) but it is taking a cautious approach to capacity, with 2023 flying expected to be at best even with 2019 levels.

The airline said it saw no signs of demand slowing.

Workman said third-quarter profits were expected to be 13 per cent above 2019 but the airline was now battling high fuel costs and general inflation, affecting all its supplies.

It also had big debts stacked up during the pandemic to repay.

Premium Economy aboard an American Airlines Dreamliner. Photo / Grant Bradley
Premium Economy aboard an American Airlines Dreamliner. Photo / Grant Bradley

"Our goal is to pay down roughly $US15b in debt we've accumulated because of Covid by 2025 so profitable quarters like this allow [this] and to continue to invest in a product that our customers want."

The airline has recently announced new deliveries of its Airbus A321XLR and Boeing 787-9 aircraft, beginning in 2024, will be fitted with its "Flagship Suite" premium seating and a new aircraft interior for its long-haul fleet.

The suite will offer customers a private premium experience with a privacy door, a chaise longue seating option and more personal storage space.

The move aimed to meet rising demand for premium seating across the airline sector.
American's premium seating in its long-haul fleet will grow more than 45 percent by 2026.

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