Air New Zealand is still increasing its passenger numbers but the rate of growth is slowing as foreign visitor numbers fall and local business travellers tighten their belts.
Operating statistics for January show that the airline's new planes have also caused a fall in the load factor - the percentage
of seats the airline is managing to fill.
The number of passengers flying with the airline in January was up by 1.4 per cent compared with the same period a year earlier. Passenger numbers for the financial year to date were up by 4.1 per cent.
But chief executive Rob Fyfe said the growth in passengers had not kept pace with the new aircraft that had been brought into the fleet.
The company has now taken delivery of five of its 17 new Q300 planes. The domestic aircraft have about 50 per cent more capacity than those they are replacing. Fyfe said that had resulted in a load factor of 82.2 per cent - half a per cent lower than a year ago. For the financial year to date, the load factor was just 0.1 per cent down.
"That is not unusual. When you add capacity it takes a while for the market to soak up that capacity."
He said it made sense for the airline to buy the planes while the dollar was strong. They were bought with a 15 to 20-year timeframe in mind, so the company had to look past any short-term economic cycles.
It was a fair to say that what had been strong year-on-year growth in demand was slowing. "That's virtually in all markets."
Abroad, the strong dollar had been an issue, as it had been for the tourist sector in general.
Higher fuel costs were also a factor in terms of the cost of flights and petrol costs for consumers eating into discretionary spending power.
Interest rates were also rising in most of Air NZ's target economies.
All of that combined was starting to slow down growth in long-haul travel.
Domestically, the airline was still feeling the effects of the high dollar through its impact on exports for provincial areas and the nervousness it had generated within the business community causing a fall in travel.
Fyfe said the cash position of the airline and the sound fundamentals of the economy made Air NZ confident it would ride through the next 12 months or so.
