The Shanghai-Auckland-Buenos Aires “Southern Link” route launching late this year is a highlight for Auckland Airport, where capacity increases have largely plateaued with little sign of rapid pre-pandemic growth rates.
International capacity into Auckland is running at just on 92% compared to 2019 - slightly ahead of New Zealand as a whole - and fewer seats mean fewer opportunities to entice tourists here.
Auckland Airport’s chief executive Carrie Hurihanganui says there are complex reasons for stalled growth at a time when aviation links in other parts of the world are booming.
‘’I’d say overall aviation capacity remains a challenge for New Zealand. There’s a direct correlation that is going to make tourism growth in the short term harder.’’
New Zealand risked becoming an outlier as other countries enjoy the full restoration of air links, she says.
Christchurch Airport chairwoman Sarah Ottrey says that while the South Island has enjoyed a good tourism recovery post-pandemic, there is still some way to go to build back our international markets to pre-pandemic levels, impacted by a slow-to-recover inbound China market and an uncertain United States. For Christchurch, existing international carriers are growing seats in the market by 7.5% for the peak summer season, which is a positive trend.
‘’Growth from existing carriers brings with it less risk and reflects the positive position the South Island holds with our key inbound markets, including Australia,’’ she says.
Hurihanganui welcomed the Government’s pivot early this year to overtly support tourism, led by Christopher Luxon, her former boss when she too was an executive at Air New Zealand. ‘’I think the Government’s focus on tourism is really welcome.’’
But border charges remain an issue.
‘’There have been tangible improvements on that front, but New Zealand is still considered an expensive destination as far as crossing the border.’’
The near trebling of the International Visitor Levy was not welcomed by the airport, which favours targeted charging for attractions such as those mooted for the country’s most popular scenic attractions.
Some friction had been taken out of visa processing for visitors from China, but anything to speed that further would be welcome.
She welcomed extra funding for Tourism NZ but would like to see more funding and support to land major events.
‘’I absolutely think we need to be pitching in for those big events. You’ve got to be in to win.’’
They don’t have to be America’s Cup-size. Events such as the ripple effect of thousands at a conference are immense for the country.
These are booked years in advance and are of interest to airlines weighing up where to fly next. Daily widebody aircraft services on long-haul routes can be worth about $150 million to the country in total tourism spend and worth much more for exporters.
‘’We need to have our toes at the line and be competitive as a destination so that airlines do choose to point those assets to New Zealand.’’
Airlines have plenty of choice.
‘’We’re a long, skinny route, which means we’re quite asset-hungry.’’
Airlines assess whether they fly one return flight a day to this country or, for example, do four sectors around Asia.
Manufacturing problems and delays at Boeing and Airbus have stalled the delivery of new planes, meaning there are supply problems.
‘’I do look through to the medium to see that those things will be worked through, but that doesn’t help us in the short term.’’
In the past year, international passenger numbers were up 2.5% year on year to 10.3 million (including transits), the airport reported in annual results last month.
‘’We are we are seeing passenger growth, so it’s not all, it’s not all bad news, but it’s certainly not recovering at the pace that I think any of us would like or arguably what New Zealand needs,’’ says Hurihanganui.
The Southern Link service launching in December would not only provide more capacity to China (where seat numbers, if not passengers, have recovered) but crucially provide another option beyond LATAM to fly directly from Auckland to South America. While just twice a week initially, she says that could be boosted and it would tap into the Australian market, which also feeds the expanded Qantas service to New York from Auckland.
Qantas was also starting services to Adelaide and Perth later this year and Hurihanganui says the airport’s route development team was working closely with other airlines.
Although she wouldn’t specify which ones, Turkish Airlines is known to have New Zealand on its radar and Thai Airways is tipped to be eyeing a return to this country.