Will this summer’s bumpy flying restart signal what 2023 has in store for passengers?

Airlines will soon be making the big call on how much capacity to put back into New Zealand next summer after a bumpy restart during the past year. Reduced capacity sent fares soaring and staff shortages led to disruption for travellers.

Board of Airline Representatives (Barnz) executive director Cath O’Brien said she hoped there’d be a ‘’moderation in pricing’' and more options for travel but problems that led to fuel rationing need to be sorted out to lure more capacity back to this country.

But it may take some time for lost luggage problems and processing delays to ease.

She said there would be labour shortages next year.

“The aviation workforce is large – especially when you consider airlines, ground handlers, caterers, security staff, biosecurity.’’

Barnz represents nearly all airlines operating here and O’Brien said members are currently struggling with high vacancy rates, and she said this was unlikely to change in 2023.

“Labour constraints mean that it’s harder to keep the system humming across New Zealand, and that translates into queues and delays, which of course is really frustrating. Airlines, ground handlers and caterers are all working hard to build back workforces, but it’s a tough job.’’

Cath O'Brien, executive director of the Board of Airline Representatives. Photo / Dean Purcell.

Just before Christmas, Auckland Airport said earlier this month that there were 1600 vacancies across the airport system.

A single bad batch of aviation fuel at a time when stocks were low and demand high led to fuel rationing for airlines in the leadup to Christmas.

“We need to make sure we’re resilient and able to welcome international carriers to New Zealand,’’ she said.

“Part of that is making sure we have onshore fuel reserves for jet fuel so we don’t see a repeat of the jet fuel rationing we saw in recent weeks. Things like that are really difficult for long haul carriers to deal with, and will make it difficult for New Zealand to be top of the list for long haul flying.’’

Next year, the theme for aviation would be continued rebuilding after close to two years of economic devastation when the pandemic hit in 2020.

Over these holidays international airline capacity is 30 per cent down on the summer of 2019-2020 at a time when demand was running at close to pre-Covid levels.

Domestic capacity in December was at 90 per cent pre-Covid levels.

“We will continue to rebuild international connectivity to New Zealand, which I think is a long game. It took us some time to build up the levels of international connectivity we enjoyed in 2019, and it will take us some years to rebuild connections to that sort of level.”

Thai Airways, Philippine Airlines, Air Samoa, Sichuan Airlines, and Hainan Airlines had not returned and most of those which had were operating reduced schedules or with smaller planes.

Virgin Australia – which had about 17 per cent of the trans-Tasman market before the pandemic - is still only operating to Queenstown from Australian cities.

“Given the long lead time to book slots, airlines are currently considering New Zealand summer 2023-24. The seasons before this are all locked in already. It’s important we are seen as a great place to operate to so that we can restore the great connections we once enjoyed,’’ said O’Brien.

“In my view, I don’t expect to see international connectivity to New Zealand restore until something like 2025.’’

There was little scope for any more capacity in the short term as airlines had put as many planes and staff back on routes that they had at their disposal.

Auckland Airport has had its busiest holiday season since 2019-20. Photo / Jed Bradley

While there would be a seasonal decline for the New Zealand winter, airlines were now planning for next summer. O’Brien said the country’s international airports, which are in Auckland Wellington, Christchurch, Queenstown and Dunedin needed to make ensure they were ‘’great’' places to operate.

This meant having competitive landing fees and other charges and infrastructure that was up to scratch. There are negotiations over charges for a five-year period at Auckland Airport where airlines are concerned about space for processing arriving international passengers and the state of the domestic terminal, due for replacement next decade.

Throughout the aviation system, staff shortages have disrupted travel during the past year as demand surged back. There were no quick fixes heading into 2023. She said airlines were operating with up to 30 per cent labour vacancies and then, beyond that, there’s a proportion of staff who are unwell with Covid at any one time, which requires us to stand down.

Over the holidays ‘’misplaced luggage’' has been piling up at Auckland Airport. Not only was there a shortage of ground handlers, but many of those working had also only just been hired and had been trained by rookies.

“We have to take huge duty of care at the moment at the airport and allow people to take time, which is actually precisely the opposite of what most passengers would want.’’

Processing delays in getting staff in from overseas to fill airport jobs was exacerbating the problem and she said high airfares were a problem for any workers hoping to come to this country. Once here they face high accommodation and other living costs. Airline pricing was a textbook example of the laws of supply and demand and with more capacity coming there were signs of prices moderating.

“It’s a tough situation that we’re in with very constrained capacity both domestically and on the Tasman and internationally - basically not enough seats.’’

Auckland Airport’s general manager customer and aeronautical Scott Tasker said 23 airlines were flying to 35 destinations from the country’s main gateway this summer, compared to 29 airlines flying to 43 places before the pandemic.

“We haven’t had sort of levels of recovery that you’re seeing in countries like the UK, the US or Canada. In this region, we were slower to open but we’re keeping up with those compare ourselves with.’'