New player ups the ante on flights to Hong Kong


Auckland-Hong Kong routes are shaping as a battleground as Hong Kong Airlines enters the market just as incumbent Cathay Pacific rolls out a brand new weapon - the latest long-haul airliner.

Add to the mix Air New Zealand's daily flights using newly refurbished Boeing 777s and there's a big challenge for airline revenue teams but big opportunities for bargain hunters.

Hong Kong Airlines will start flying on November 10 and launched with business-class fares of $2204, less than half that charged by its rivals.

Cathay Pacific, which has a revenue-sharing deal with Air New Zealand, has cut its return fares to China through its Hong Kong base to $1019.

Cathay's director of corporate affairs James Tong said the entry of a new player would help stimulate the market.

"In a sense it's a good sign - it means the whole market is building up and expanding," Tong said.

"From a competitive point of view we welcome another player - there are now three airlines promoting a destination."

Between the three carriers there would be up to four return flights a day between Hong Kong and Auckland and Tong said there was scope for his airline to add even more.

"The Auckland route is doing very well. We are very optimistic about this market."

Cathay will use new Airbus A350XWB planes on the route from October 31.

The aircraft is up to 25 per cent more efficient than equivalent size, older planes. The twin-engine plane will replace four-engine A340s the airline uses.

Leslie Lu, general manager of product for Cathay Pacific, said flying inefficient older planes made it difficult to compete.

Passengers were demanding better seats and entertainment, he said.

Air New Zealand's chief sales and commercial officer Cam Wallace said new planes do have an impact on a market.

When Air New Zealand introduced the 787 Dreamliner to the Shanghai route it was turned around immediately. "The airline economics improved with more efficient aircraft and it appealed to the high-end leisure market and the corporate market."

Around the margins there were also aircraft enthusiasts who would target certain planes to fly on.

Like Tong, he said the competition would stimulate the market and help push fares down.

"They're coming in with quite significant increases in capacity and prices will reflect this," Wallace said.

Hong Kong Airlines would mainly carry Chinese tourists to New Zealand who are flooding here in growing numbers for their holidays.

There had been a steady increase year on year in the number of Hong Kong and China travellers visiting New Zealand.

According to figures to March, the total number of visitors from Hong Kong and China was up 19.1 per cent and 27.8 per cent respectively.

About 380,000 Chinese come to New Zealand and within two years they are forecast to be the biggest spenders, ahead of the million-plus Australians who come here each year.

Hong Kong Airlines was established in 2006 and is a full-service carrier with 30 destinations across the Asia-Pacific region and has a young fleet of 30 Airbus aircraft with an average age of around 3.5 years.

Auckland Airport estimates that Hong Kong Airlines' new service will add 177,000 seats to the Hong Kong to Auckland route every year and will provide a $137 million boost to the New Zealand tourism industry.

By Grant Bradley

NZ Herald

Aviation, tourism and energy writer for the Business Herald