AirAsia boss considers next move in NZ as it prepares to wind up its only service here

SUPPLIEDAirAsia X services the Auckland to Gold Coast route using an Airbus A330-300.Just two months before winding up its only route to New Zealand budget airline AirAsia is already considering its next move here. On Monday AirAsia X chief executive Benyamin Ismail told CAPA Centre for Aviation that, despite opening and closing two routes to…

AirAsia boss considers next move in NZ as it prepares to wind up its only service here


AirAsia X services the Auckland to Gold Coast route using an Airbus A330-300.

SUPPLIED

AirAsia X services the Auckland to Gold Coast route using an Airbus A330-300.

Just two months before winding up its only route to New Zealand budget airline AirAsia is already considering its next move here.

On Monday AirAsia X chief executive Benyamin Ismail told CAPA Centre for Aviation that, despite opening and closing two routes to New Zealand since 2011, it was not giving up on New Zealand as a destination.

“Auckland is the right market for us but it is something we will visit in the next few months or year,” Ismail said.

AirAsia X CEO Benyamin Ismail says high fuel prices and fierce competition on the Auckland to Gold Coast route meant yields were low.

BEVAN READ/STUFF

AirAsia X CEO Benyamin Ismail says high fuel prices and fierce competition on the Auckland to Gold Coast route meant yields were low.

AirAsia X, the medium and long-haul operation of the AirAsia brand, began scheduled services to New Zealand in April 2011 with four-times weekly flights from Kuala Lumpur to Christchurch, but that was stopped in May 2012.

READ MORE:AirAsia drops Auckland to KL route

In March 2016the low cost carrier returned to New Zealandwith daily flights from Kuala Lumpur to Auckland via the Gold Coast. However, that service ends on February 11 as the airline works to improve the efficiency of its network.

But there was no denying New Zealand was an attractive market for airlines, Ismail told CAPA.

“This market’s a huge market,” Ismail said.

While AirAsia’s Gold Coast to Auckland service had good aircraft loads, high fuel prices had meant that the yields were “fairly low”, he said.

Competition on the route was also fierce, he said.

When AirAsia launched the route there were up to 21 flights per week between Auckland and the Gold Coast with Air New Zealand, Jetstar and Virgin Australia all servicing the route.

“Especially with the current fuel environment I felt it’s not the best to just keep sustaining that.

“It will be a market that I will revisit again in due time. So let’s wait for the fuel to come down first.”

House of Travel commercial director Brent Thomas said New Zealand continued to be a growth market for both inbound and outbound travel, which made it appealing to airlines.

New Zealand was a particularly attractive destination to the growing number of people in south east Asia with discretionary income looking to travel, he said.

South east Asia was also one of the fastest growing destinations for out bound travel from New Zealand, he said.

“Is there untapped potential there? Most definitely.”

This played to AirAsia’s strength, as it had an extensive network throughout Asia and especially south east Asia, he said.

About 30 airlines serviced New Zealand and in order for a brand to resonate with the New Zealand public they needed to show longevity in the market, he said.

“What we want is competition but sustainable competition.”

AirAsia was not doing itself any favours by opening and closing New Zealand routes in quick succession, he said.

“It needs to be here on a sustainable basis rather than a come and go type basis.”

Ismail said a return to Christchurch was not on its radar.

AirAsia X started flights to Christchurch and Kuala Lumpur on April 1, 2011, less than two months after the region was crippled by a 6.2 magnitude earthquake.

Ismail said its Christchurch was a success but the tourism market there had not fully recovered since the quake.

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