Air New Zealand has to cancel London-Hong Kong Flights from March 2013

Written by Your VIPTRIP Team on November 17th, 2012

Air New Zealand Ltd. said Monday it is halting flights from Hong Kong to London from March 2013 amid losses on the competitive route, underscoring continued weakness in demand for long-haul business travel.

New Zealand’s flag carrier has been operating the service since 2006 as a continuation of its flight from Auckland to Hong Kong, complementing the airline’s flights to London from its Auckland hub via Los Angeles.

Though the travel times between Auckland and London are roughly the same on both routes at between 25 and 27 hours, customers flying via Los Angeles must clear immigration formalities as required under U.S. law, an unnecessary hassle during a Hong Kong layover.

The decision to cancel the service was made because the airline doesn’t expect the route to turn profitable in the foreseeable future, Chief Executive Rob Fyfe in a statement. He noted that the move will result in the elimination of around 70 London-based flight attendant positions, though he said the airline plans to redeploy additional capacity on its more popular U.S. flights.

Premium airlines in the Asian-Pacific region have in recent months been scaling back some of their long-haul flights, which historically have been their most lucrative routes, as stubbornly high fuel prices and weaker demand make it difficult to operate the services profitably. The drop in demand has been more acute on services between Europe and Australasia.

In the first eight months of the year, first and business-class traffic on routes between Europe and Southwest Pacific, which include Australia and New Zealand, dropped 11.7% from a year earlier, underperforming a 4.7% rise in total international premium traffic during the period, according to the International Air Transport Association.

Australia’s Qantas Airways Ltd. in March axed its own Hong Kong-London flights due to keen competition. The long-haul route is currently served by as many as eight daily flights in each direction by four airlines, including Cathay Pacific Airways Ltd., British Airways and Virgin Atlantic Airways Ltd.

On other long-haul routes, Singapore Airlines Ltd. said last month it would withdraw its nonstop flights to Los Angeles and New York at the end of next year given high operating costs, marking the end of the world’s two longest distance commercial flights.

Airlines in the region have also been contending with fierce competition against state-backed Middle Eastern carriers such as Emirates Airline and Qatar Airways, which have invested substantially in new aircraft and provide top-notch service standards to take market share away from incumbent airlines operating Asia-Europe flights.

Dubai-based Emirates in September unveiled a wide-ranging pact with Qantas to align their ticket prices and flight schedules between Europe and Australia, a move that could lead other airlines to seek stronger alliance ties as well.

In its statement Monday, Air New Zealand also said it has formed a strategic alliance with Hong Kong-based Cathay Pacific on the Auckland-Hong Kong route that will allow both airlines to jointly operate with a code-share partnership. Air New Zealand said it will continue to operate its flights to Hong Kong.

It said customers booked from Auckland to London via Hong Kong after March 3 will be accommodated on Cathay Pacific’s flights from Hong Kong to London.

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