Air New Zealand CEO Christopher Luxon - bring on the competition

An Air NZ Airbus A320 lands at Wellington. There's tougher competition for Air NZ on the international front, but this is feeding more passengers into its domestic business. Photo / Mark Mitchell

Air New Zealand chief executive Christopher Luxon says the flood of rival airlines coming in to the country was good news for his business.

While he expected the state of the market to be "choppy" over the next 12 to 18 months, Air New Zealand with 40 per cent of inbound international business was benefiting from the surge in tourists, in spite of increased competition.

And once the visitors are here, Air New Zealand's growing domestic operation was the main airline beneficiary.

"Whenever a competitor airline brings visitors into New Zealand that's a good thing for Air New Zealand because we then pick up those passengers and disperse them throughout country," he said on the sidelines of Trenz, the tourist industry showcase held last week in Rotorua.

Air NZ chief executive Christopher Luxon.

"We've got the economics right in that we can fly to places in New Zealand that other airlines can't fly to."

Seven new airlines have started flying to Auckland in the past year and Hong Kong Airlines announced at the weekend they plan to start daily flights from November.

Airline share prices around the world slipped by almost 7 per cent in April, Air New Zealand's fell by 20 per cent, closing on Friday at $2.26. Increased competition has been cited as a reason for the fall.

When fuel prices rose rapidly over a two-year period nine airlines left New Zealand, Luxon said.

"The bottom line for us is that we've been here for 75 years and we'll be here for another 75 years. The thing I would say in a pure competitive sense is that in the last four years we've spent a lot of time investing in the business. Those investments stand you in very good stead widen you go into a competitive battle."

Capacity and revenue in its international and domestic businesses were up substantially.

The number of international visitors had climbed beyond 3.2 million a year, up 21 per cent in the last two years.

Luxon said Air New Zealand had deep customer insights.

"We know who we're targeting and why with our marketing efforts and work strategically with Tourism New Zealand."