Air New Zealand has done regional New Zealand a favour

My congratulations to Air New Zealand. They’ve bitten the political bullet and opted to cancel of routes that are operated exclusively by their smallest aircraft. That means the end of any services to Kaitaia, Whakatane and Westport. These routes, and the others served by the Beechcract 1900D, were loosing money hand over fist. Air New Zealand says about $1 million/month.

I have no doubt that the cities losing service will be upset, and there’ll probably be media rage in spades. But here’s what they should remember:

Flights still aren’t far away

  • For every cancelled airport, there’s another airport within an two hours drive. For Whakatane there are two within an hour’s drive.
  • For all nonstop routes cancelled (like Whangarei or Taupo to Wellington) there are options to fly through a hub (Auckland) or take a two hour drive to get a nonstop flight.

Regional New Zealand has been historically over served: we need to recalibrate our expectations

  • Most places in the world two hours drive to an airport with commercial service is nothing. Look at the US, the world’s biggest domestic market. Regional passengers routinely drive 5+ hours to get a flight.
  • Indeed, people in many big cities need to travel a good distance to an airport too. It took us two and a bit hours to get into central Istanbul yesterday.
  • And many others in big cities choose to go further to access more distant airports with low cost carriers and lower fares. That’s not dissimilar to a Wakatano driving to Rotorua to grabaseat which I am confident happens all the time.

These changes will ultimately make flying to the regions more accessible

  • The Beechcraft were tiny. Considerable fixed costs were split across just 19 passengers leading to inevitably high fares. There wasn’t much Air NZ could do to offer genuinely accessible fares to ordinary regional dwellers.
  • As it retires the ‘lil ones, Air New Zealand is adding more capacity to other regional airports with flights on fifty seat aircraft. Larger aircraft will bring lower fares, accessible to more regional New Zealanders.
  • The new low cost, last minute regional fares, are also a reasonable nod to the folk who need to travel to a funeral, or similar, and are buying fares at what would normally be the most expensive time. That’s the kind of thing you can do when you’re operating at scale.
  • Nowhere else in the world is there a single airline operating 19 seat and 350+ seat like Air New Zealand. Sustaining comparable fleet wide service levels for these different birds leads to a high costs base for the smallest ones.
  • It is possible that the likes of Soundsair (sponsor of the World Famous Kahurangi Marlborough Schools’ Debating Team) will step up to fill some regional gaps, as they’ve done for the former Air NZ Wellington-Wanganui route. Soundsair has a different cost structure and that allows them to offer fares that are genuinely competitive. I’d look out for them on Nelson-Palmerston North, in particular.

So good job, Air New Zealand. Do your best to weather the negative publicity storm. This is better for regional New Zealand, long term.

8 thoughts on “Air New Zealand has done regional New Zealand a favour

  1. Just popping in to comment that while we definitely have driven an hour (or half an hour, in my family’s case) to Rotorua to catch a cheaper flight, I have never heard the word Wakatano before 😉

      1. I think we just call ourselves locals, or (to the horror of Hawke’s Bay residents) “from the Bay”.

        Though if I had to pick, I’d go for Whakatanian. :)

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