Pacific Perspective
Pacific Perspective
Dramatic changes are taking place in the aviation industries of Australia and New Zealand. These changes impact travel patterns between these two nations and other points in the Pacific, including Hawaii. Turbulence in the
South PacificOf particular concern to the local travel industry is the state of the two main international airlines in this region, Qantas of Australia and Air New Zealand. Qantas and Air Canada each provide a daily non-stop service from Sydney. Between New Zealand and Hawaii, Air New Zealand provides four weekly non-stop flights, the only such service.
Together, all of these flights represent about 10 percent of international flights serving Hawaii and account for more than 7 percent of non-stop international seats.
Hawaii has lost a substantial level of air service from these two nations in recent years.
In the late 1980s through early 1990s, Hawaii had a combined total of approximately 35 non-stop flights with Australia and New Zealand. That has been reduced to the 18 flights cited above.
And no U.S. airline provides non-stop service with either Australia or New Zealand; although American, Continental, and United did so until the early 1990s.
The level of airline service and the number of visitor arrivals from the two nations has declined since then, due to factors that include less favorable exchange rates and increased aircraft fuel prices.
The Hawaii visitor industry is highly dependent on air service for our visitors, be they domestic or international. Visitors from Australia and New Zealand accounted for about 5 percent of visitor arrivals in the last two calendar years, somewhat below the market share for international airline seats.
The ownership pattern of the two airlines exhibits some interesting patterns.
Currently, both Qantas and Singapore Airlines each have a 25 percent ownership stake in Air New Zealand. Qantas recently proposed to increase that stake, but this effort has been rebuffed by the government of New Zealand.
At the same time, Air New Zealand owns 100 percent of Ansett Australia and Ansett International, although Ansett remains an Australian airline. Ansett Australia is the principal domestic competitor of Qantas in Australia.
Qantas also faces domestic competition from start-up Virgin Blue, while new competitor Impulse has ceased service.
Had the proposed Qantas ownership stake in Air New Zealand been approved, the result may well have been a further decrease in flights between Australia and New Zealand with Hawaii.
Air New Zealand is facing major losses, particularly at subsidiary Ansett, and will undoubtedly require an infusion of capital in the near future.
Most recently, Singapore Airlines has offered to increase its ownership share in Air New Zealand, but this apparently is not favored by the government of New Zealand.
Any further cuts to airline service between Hawaii and both Australia and New Zealand will likely further erode visitors from these two nations.