Flight-plan changes balance capacity with route cuts Grant Bradley
Balancing act in airline scheduling comes as high fuel costs threaten to take toll, writes
New airline services will more than balance out lost capacity over the coming summer but high fuel prices could force some “hard calls” next year.
More airlines will operate new fuel-efficient planes such as Dreamliners and A350s to Auckland Airport. More than 20 per cent of aircraft at the airport will be newgeneration planes.
New airline schedules come in around the world on October 28, coinciding with the end of daylight saving in Europe. And while capacity will increase, some airlines have announced route cuts.
Air New Zealand will scale back flights to Argentina, cut back its new service to Taipei from five times a week to three times a week (which starts next month), suspend services to Haneda in Tokyo and stop flying to Vietnam at the end of this month and not resume next winter.
The airline is trying to free up aircraft to cover for Dreamliners out of action for checks and repairs to Rolls-Royce engines whose engine blades are deteriorating faster than expected.
Emirates has announced it will cut back flying daily from Auckland to Bali to four times a week from mid-January and Hawaiian Airlines will pull back slightly from five times a week flights to Honolulu during quieter months.
“These are frequency adjustments based on seasonal market demand,” said the airline’s country director for New Zealand, Russell Williss.
“Overall demand for a Hawaii vacation remains strong, and we will continue to offer five times weekly non-stop flights during peak periods.”
Auckland Airport’s general manager aeronautical commercial, Scott Tasker, said capacity reductions were a sign of rational behaviour by airlines.
Demand shifts and higher fuel costs were influencing behaviour.
“Their business models have evolved over time — that’s their ability and level of sophistication that they are able to put into schedule and network planning and managing their fleets,” he said.
“On leisure routes you can be more dynamic and target demand on routes where there is a large amount of corporate or business traffic.”
Air New Zealand has said that over the coming year it expects domestic capacity to increase by between 3 per cent and 5 per cent and the Tasman and Pacific Islands network is targeted to grow between 7 and 9 per cent.
Extra capacity will be supported by its new A321 Neos (new engine option) which have about 25 per cent more seats than the current wanting to get to that part of the world with a nice seamless transfer in Auckland along the way.”
Tasker said the new fuel-efficient planes provided some headroom to cope with higher fuel prices.
These have remained elevated this year and there are signs they could increase further. They were about 45 per cent lower than spikes in 2011 and 2014 and fuel hedging provided further insulation.
“It’s when the hedges roll off or it gets higher is when there have to be some hard calls,” he said.
During the recent peak oil period most airlines had changed their business so they could better cope with high prices.
Helloworld executive general manager Simon McKearney said rising fuel prices were putting pressure on all airlines.
“I think the airlines in general are eyeing the storm clouds on the horizon — fuel prices. We expect price increases and with that a slowing of demand to some markets,” said McKearney.
At its annual meeting last month, Air New Zealand warned higher than expected jet fuel prices could hurt profitability in 2019.
Jet fuel prices have recently been higher than US$85 a barrel ($131) the company had assumed in its 2019 financial year earnings guidance.
Latest figures show jet fuel prices in this region are US$96.35 a barrel, which is 32.8 per cent higher than a year ago.