Houston hop part of Air NZ growth spurt

The Houston flights will provide links to the big southern and eastern US markets. Photo / Getty Images

Service to centre in Texas will be local airline’s longest flights yet

Air New Zealand is launching a fresh near half-billion dollar push into the United States with services to Houston from Auckland this year.

The airline is on a rapid growth path this year, expanding by around 12 per cent over the next six months.

Chief executive Christopher Luxon said the new capital - planes - invested in new routes typically amounted to about $450 million for services built up to daily using a wide-body plane and annual operating costs added up to $160 million.

The Houston service would run up to five times a week and start about the same time as Air New Zealand continues to bed down its resumption of flying to Singapore and starts flying three times a week to Buenos Aires. And it hopes to start a partnership with Air China for daily services to Beijing.

"We've got a bit on, we've thrown the company into growth mode. Internally within Air New Zealand it's quite a change as we learn how to manage profitable growth."

Although fuel prices had risen slightly from recent lows, they did not colour the airline's thinking.

"If we let that dictate our decisions we'd get into trouble very quickly. We're a demand-driven organisation and if we think there's an opportunity as a company and a country to exploit it we do," he said.

Salt Funds Management managing director Paul Harrison said the Houston move made sense for Air New Zealand with strong connections through the United States with alliance partner United Airlines.

But while it sealed up one route it could alert another US carrier to the opportunity of flying here.

Since 2012 Air New Zealand has had direct flying to the US mainland to itself which Harrison said was important for yields and profitability.

Air New Zealand shares closed down 0.2 per cent at $2.815 yesterday.

Tourism leaders and the travel industry have welcomed the flights, set to start in late December, as giving more momentum for rapidly growing traffic between NZ and the US.

Prime Minister and Tourism Minister John Key said the new service would provide a more direct route for the millions of US citizens living in the south and east of the country.

The US is already New Zealand's third-largest visitor market behind Australia and China, with 226,608 arrivals in the year to February - a 10 per cent rise on the previous year.

The Auckland-Houston flights will be the longest on Air NZ's network.

It will take about 13 hours 50 minutes to make the 11,990km flight and an extra 40 minutes to fly back to New Zealand into prevailing head winds, 30 minutes more than the airline's current longest flight from Auckland to Vancouver - about 11,340km. The airline will use refurbished Boeing 777-200s.

New route
• Air New Zealand will fly between Auckland and Houston up to five times a week.
• It provides connections to the big southern and eastern US markets as well as the Caribbean and central America.
• Services due to start in late December.