Tokyo calling: Air New Zealand sees sleeper market for Kiwis wake up

Japan has re-opened for tourists after imposing tough pandemic restritctions. Photo / Getty

Easing of Covid restrictions in Japan means Air New Zealand can revive the market which its long-haul chief says will have fresh appeal to Kiwis.

While the kiwi dollar has taken a hammering, particularly against the US greenback, it is performing strongly against the weak yen, up 26 per cent on where it was early in the pandemic and higher than it was five years ago.

Air New Zealand's general manager of long haul, Scott Carr, said travel in Japan now feels relatively inexpensive and bookings since the announcement the country was opening up had been heavily weighted towards Kiwis heading north.

Traditionally, it had been mainly an inbound market for Japanese tourists, New Zealand's fifth largest source of overseas visitors before the pandemic.

The 70 per cent inbound from Japan and 30 per cent outbound travel by Kiwis had now reversed.

Air New Zealand had maintained services from Auckland to Tokyo's Narita Airport throughout the pandemic to mainly carry freight with backing from the Government's cargo scheme.

But now that passengers can travel en masse the airline will step up services from three times a week to four times a week from the end of November.

''We will get back to daily as quickly as we can and then longer term as we get all our fleet back - which won't be before June of next year - we'll be looking at how we can rebuild Tokyo back to 10 a week,'' said Carr.

''It has been historically a very strong performer for Air New Zealand and so we're committed to getting back in there strongly and as quickly as we possibly can to cement that.''

Air New Zealand is using a Dreamliner on the Auckland-Tokyo route. Photo / Grant Bradley

Carr worked in Japan for four years and said that throughout some of the hardest operating periods for the airline industry, the global financial crisis or following natural disasters, flights to the country remained profitable.

Air New Zealand doesn't have direct competition on the non-stop route, something that was an incentive to strengthen its grip on the market.

''If you can operate your route as a sole operator it usually means you can extract a margin. When you've got multiple carriers it becomes a lot more difficult. But we want to grow it to defend it as well and make sure we have a long-term, sustainable business.''

He said the airline devoted considerable resources to Japan and spent "a huge amount of money" marketing there.

'We have a strong vested interest in growing it.''

Initially, cargo-only flights were operated when the pandemic hit.

''Then we started operating once a week for passengers to maintain some passenger connectivity and keep that muscle memory going and market for the recovery.''

Japanese travellers were notoriously nervous about natural disasters and other events. After earthquakes in New Zealand and Japan 11 years ago numbers of tourists dropped sharply and Carr said it would be challenging to get some to travel following the pandemic.

''We don't expect that to be too different this time, although there is a bit more pent-up demand obviously when two-and-a-half years of lockdown than they had [previously].''

Scott Carr, general manager long-haul at Air New Zealand. Photo / Supplied

Younger travellers, including school groups, are a big market and this was showing signs of recovering strongly.

The airline is using its Code 1 Dreamliners to fly into Japan. They have less of a premium skew with 18 business premier seats. And as with other routes, there was strong demand for the front of the plane.

''Premium cabins have been doing particularly well in most markets, including short-haul where traditionally they were hard to fill.''

Carr, who was in Japan last month, said places he visited were bustling.

''Everything's open, the shops are open, the restaurants are open, the bars are open. And it's incredibly reasonably priced.''

He said for Kiwis, Japan had been something of a ''sleeper market''.

Even pre-Covid there was a relatively small number of New Zealanders who visited Japan.

''If you compare it to the Australia -Japan marketplace, Aussies would go up there in their hordes, but Kiwis were a bit reticent. ''

Before the pandemic, there were about 30,000 bookings out of New Zealand. In the past 10 days after Japan opened fully to vaccinated travellers, the airline took 6000 bookings. The All Blacks test against Japan in Tokyo on October 29 would have been a draw for some travellers.

''Kiwis have really woken up,'' Carr said. ''The Japan market is interesting and attractive and the kiwi dollar might be weakening but nowhere near the extremes of the yen,'' he said.

Return flights booked for November 13 and returning a week later start at $1802.