Air NZ plans to expand its Australian network. Photo / Auckland Airport
Air New Zealand will return to all its Australian destinations - and add one - when a two-way transtasman bubble starts.
The airline in the last year has slashed capacity across the Tasman to 11 per cent of what it was pre-Covid but is bullish about demand return when a bubble gets the green light.
It is adding Hobart in Tasmania to the nine ports it will fly to, although frequency and capacity across the network will depend on demand.
Leanne Geraghty, chief customer and sales officer, said the airline was expecting strong demand for seats on both sides of the Tasman. It has a strong presence in Australia and has scored well in consumer polls there previously.
"We believe there is significant pent-up demand particularly around reconnecting friends and family," said Geraghty, an Australian.
"The thought of being able to make the trip there is really exciting and we expect there will be a strong surge in demand."
After the friends and family rush, the airline expected strong demand by leisure travellers because of the dearth of options to travel further afield from New Zealand and Australia.
Air New Zealand holds hundreds of millions of dollars in customer credits and she said much of this would be used on Tasman flights.
"There are a lot of credits in the system and people are using them. We have come a very long way in terms of being able to reunite people with them."
The Government could tomorrow announce a start date for a quarantine-free arrangement with Australia. While many Australian states have allowed open entry from New Zealand for nearly six months (with some pauses due to Covid outbreaks), this country has required 14-day quarantine for everyone coming here.
On Friday Air New Zealand announced it would return to Hobart in Tasmania for the first time in 23 years. It will expand its skeleton service to Sydney, Brisbane, Melbourne and Perth and will return to Cairns, Sunshine Coast, Gold Coast and Norfolk when the bubble starts.
Geraghty, who took over from Cam Wallace in her role, said the airline would need to balance levels of demand with peoples' desperation to reunite with loved ones when setting fares.
"Price does depend on demand but we're very cognisant of the fact that there will be a range of fares for everyone to be able to travel. It's been a very long wait and we're about enabling people to get together to reconnect."
She said 175 flight attendants had been recalled and had been trained to crew narrow-body A320 planes.
"In some instances given the length of time there is retraining involved."
Aircraft were ready to go and crew who need recertifying had gone or were going through that process. The airline would primarily use its narrow-body A320s but would use Boeing 787 Dreamliners on some routes.
The A320 crew sets were divided among red lane transit flights and green lane quarantine-free flights.
"We're also looking at the 787s and whether we can create crew bubbles there. That all centres on the requirements provided to us by the Government."
No planes would be brought out of hibernation to fly the routes, she said.
Qantas has retained a skeleton schedule on the Tasman but Virgin Australia quit its routes when the pandemic hit. Geraghty expects competition to heat up from the main players in this region when the bubble starts but there were barriers to others from outside swooping in to what can be a lucrative patch.
"We are anticipating competition but in terms of carriers outside the close-knit ones you'd expect to come back the challenge is really around the parameters that need to be met to put those bubble flights into place."
Airlines would need to have crew within New Zealand and Australia for the preceding 14 days.
It becomes quite challenging for other carriers outside the immediate market to facilitate that. Never say never but it would be more difficult.''
A year since borders closed Air New Zealand's total international schedule was just 5 per cent of what it was, its staff cut by more than a third and the company was heading for a significant full-year loss.
Transtasman has been Air New Zealand's biggest international sector and a bubble would be a big boost for remaining staff, said Geraghty.
"It's an incredibly important step in rebuilding the airline and the sector. It is significant for us," she said.
From the 30 airlines flying pre-Covid to all parts of the world, 12 airlines are still flying regular passenger services, and there are 17 flying cargo services.
The Board of Airline Representatives, (Barnz) says getting the Tasman open will be an absolute lifeline not just for aviation, but tourism business and families split between Australia and New Zealand.
"Everything that could be done has been done by the airlines – it has been a case of hurry up and wait. Now they are lined up in the starting blocks ready to get moving – but they need a date,'' said the board's executive director Justin Tighe-Umbers.
It had been one year this week since international aviation ground to a halt, so getting air crews, ground handlers and all the technical expertise working again would be a Godsend, he said.
"The Tasman operating will help slow that steady leakage of skills and experience the sector has seen, and preserve the capability we'll need when the borders start to open later this year."
Tighe-Umbers said travellers can expect to see some good competitive pricing in the face of increasing operating costs.
With the drop in passengers some of the costs have gone up in Australia such as aviation security charges, and air navigation service fees can be high per passenger.
"But airlines will be working hard to keep ticket pricing competitive and affordable, so people should look forward to some good deals."
BGH's tilt at Tourism Holdings has sparked more merger and acquisition speculation.