Airline capacity returns, competition mounts

AUCKLAND: Air New Zealand says it ‘‘welcomes competition’’ as rival American Airlines returns with cutprice fares on key transPacific routes.

As Air New Zealand prepares to launch nonstop flights this weekend between Auckland and New York as part of its key United States strategy, American Airlines is advertising discount promotional fares between the two countries.

While travel agents say it is still too early to judge whether fares are past their pandemic peak, the surge in capacity to North America, in particular, will at least keep a lid on them.

Government figures out yesterday show the North American market is recovering faster than others, with operating capacity forecast at 91% of preCovid levels by February next year.

Air New Zealand yesterday said it was catering to increased demand by increasing the frequency of its AucklandVancouver flights from three flights a week to daily from December 9.

The American Airlines fares are outside of peak Christmas and January periods during the airline’s summer season but return economy flights between Auckland and its DallasFort Worth hub start at $1431 in midNovember.

Air New Zealand also flies to Texas and Houston with return economy flights starting at $1922 around the same time. American is also offering a range of destinations beyond its hub with onestop New York flights starting at $1877 return in November, $600 below Air New Zealand’s nonstop flights to the Big Apple.

Air New Zealand’s chief customer and sales officer Leanne Geraghty said it welcomed competition back into the skies and continued to be focused on growing its network into North America. Following the launch of New York services, Chicago flights would resume on October 30.

‘‘As our network grows, we look forward to offering more deals for travellers,’’ Ms Geraghty said.

Discounting by American Airlines is a sign that prepandemic pricing tactics are returning and follows the release of early bird fares by Singapore Airlines earlier this week, the first time in three years it has used the strategy. Prices for some European flights start at under $2200 on the airline for next year.

House of Travel commercial director Brent Thomas was happy to see the American Airlines fares.

‘‘American Airlines have some very appealing launch fares in the market and Kiwis are quickly learning about the amazing array of options for Kiwis to travel further past Dallas on their network.’’

However, there hadn’t been as much of a competitive response as would usually be expected, an indication that air capacity was still low and demand high compared to preCovid times. And there was still considerable demand from Kiwi travellers.

‘‘At this stage it is difficult to determine if we are through the pricing peak — that will depend on whether or not we continue to see a lift in capacity coming back into New Zealand, and also what impacts fuel costs have over the coming months,’’ Mr Thomas said.

There were still capacity constraints for airlines, but they continued to push hard to recruit crew and ground staff to meet the demand.

Flight Centre’s general manager of product, Victoria Courtney, said it was still experiencing high demand and with capacity levels still limited it was not expecting prices to drop rapidly in the short term.

While there had been some tactical sale fares for travel in 2023, they were not at preCovid levels.

Ministry of Business Innovation and Employment figures show international arrival capacity was under 10% of preCovid levels at the start of the year but by next February will be at 75%.

Services on the busiest route — the Tasman — are forecast to be at 80% by then.

Details of nonstop services between Auckland Airport and North America, as of late last month are. —

Air New Zealand to Hawaii three times a week, San Francisco three times a week, Los Angeles up to 10 times a week, Vancouver three times a week (increasing to daily), Houston three times a week, from this weekend, New York three times a week, from October, Chicago three times a week.

Hawaiian Airlines three times a week to Honolulu.

United Airlines three times a week to San Francisco from October 3, moving to daily from October 28.

American Airlines daily, nonstop to Dallas Fort Worth between October and March.

Air Canada up to five times a week to Vancouver between November and March.

Qantas three times a week initially, to New York from June next year. —