Direct flights to Manila are likely to be added as part of airline’s robust growth strategy.

Air New Zealand is considering the Philippines as another longhaul destination after confirming it will fly to Vietnam next year as part of its 15 per cent growth strategy.

And more air service agreements, which allow flights between New Zealand and a growing range of countries on a variety of airlines, are being negotiated and will go to Cabinet for approval early next year.

The services to Vietnam followed an amended agreement early this year and an enhanced deal with the Philippines could open the way for Air New Zealand to fly to that country.

Air New Zealand yesterday said flights to Manila were on the radar.


"It's a big market, it's growing and there's a lot of Filipinos in New Zealand to be sure and again it's a market that has genuine two-way traffic so it's a market of interest," said the airline's chief strategy, networks and alliance officer, Stephen Jones.

Last year about 13,000 Filipinos visited New Zealand and 20,000 New Zealanders travelled to the Philippines.

Although Philippine Airlines will begin services from December, those flights will go via Cairns, while Air New Zealand would fly directly.

Transport Minister Simon Bridges said there was a growth surge in air links to New Zealand. The new agreements were negotiated recently at inter-governmental talks in Turkey and were mainly with Pacific Rim countries.

They were also in Latin America, where Air New Zealand is flying for the first time next month.

"We're increasingly in the most exciting part of the world, the Pacific Rim, with dynamic countries around us and they're increasingly getting prosperous and wanting to travel," said Bridges.

Yesterday American Airlines said it would start its direct Auckland-Los Angeles service on June 25 next year after its Wednesday announcement that it would compete against Air New Zealand in the Pacific. Air New Zealand is about to begin new services to Houston and Buenos Aires as it expands with new aircraft coming in.

Air New Zealand said it hoped to build on its three times a week service to Ho Chi Minh City, which it will start from next June and says direct flights and the aircraft it will use will allow it to to set low fares.


"They'll be competitive no doubt, the way we develop markets is by getting decent prices in," said Jones.

Flight Centre says that to be competitive with other Southeast Asia destinations it would expect fares to Vietnam to be in the $1000 to $1299 region.

Jones said seats for the seasonal service which runs from June to October will go on sale early in the New Year and ticket prices would be determined then.

Airlines typically offer very low fares to help promote new routes.

Air New Zealand will initially use a 224-seat Boeing 767-300s on the route, aircraft which it owns. Although the five 767s are the airline's oldest longhaul planes, they have been modernised with winglets to improve fuel efficiency and some of the economy seats are the roomiest in the fleet.

"It's a great aircraft for developing markets but ultimately we'd like to see it go into one of our 300-seater 787-type aircraft," said Jones.

The airline also wants to increase frequency on the route.

Flight time to Vietnam will be about 11 hours and the country will be popular with travellers who have travelled to Bali and Thailand. Ho Chi Minh City has a population of 7.5 million people.

Vietnam has not been served by direct flights and is growing in popularity among Kiwi travellers. About 15,000 went there last year and this is expected to grow by 10,000 with Air New Zealand's new services.

Norris Carter, Auckland Airport's general manager-aeronautical commercial said the new four-month service would add 23,500 seats and contribute $9.5 million to the New Zealand economy.

"Holiday visitor arrivals from Vietnam have been increasing at 23 per cent per annum over the last five years, and the number of New Zealanders travelling to Vietnam on holidays has been increasing 14 per cent a year in the same period."

Bridges said there was potential to grow the inbound market.

"It's great for New Zealanders who want to have a good time in a fantastic country but I think over time we'll see more tourists from that increasingly prosperous part of the world come to New Zealand."

Vietnam had a population of nearly 90 million people and there was scope to expand trade and business links, he said.

Trade between Vietnam and New Zealand was worth about $1.35 billion last year. Dairy makes up about half of New Zealand's exports.