Air NZ sees competition headwinds coming

Air New Zealand says its 2017 earnings won't match the $800 million it has forecast for 2016 as the airline faces increased competition and gets less benefit from foreign exchange hedging.

The Auckland-based airline faces some near-term challenges that will have an impact on the 2017 results, according to an investor day presentation.

It didn't quantify the impact of increased competition but said the benefit of foreign exchange hedges in 2017 will be about $120 million less than in 2016. While 2017 earnings "will be solid" they won't be at the level of 2016, it said.

Its forecast for 2016 pre-tax earnings, excluding the contribution from Virgin Australia, given with the first-half results in February, build on the record $457 million the company earned in the first half, which was driven by lower fuel prices and a jump in passenger revenue as the airline added new routes and refurbished is fleet.

Air New Zealand said increased capacity in the industry was driving "significant growth of seats across the network" and it expects "headwinds to overall yield as (the) market adjusts to new capacity".

Against that, it expects to continue to benefit from growth in inbound tourism, a favourable outlook for fuel prices and the scale of its fleet.

The airline is halfway through a $2.2 billion capital expenditure programme to add new aircraft, reduce the age of its fleet and cut back on the variety of planes it operates.

It expects to have reduced the average age of its fleet to 6.7 years by 2018 from 8.6 years in 2012. It will be made up of the wide-body B787, B777s, the narrow-body A320 and the ATR762s and Q300 turboprops, reducing the fleet types by three to five in total.

Its gearing rose to 52.4 percent in 2015 from 42.9 percent the previous year, and it aims to keep gearing in a range of 45 percent to 55 percent, it said today. The increase reflected investment in its fleet and a stronger US dollar.

Air New Zealand has been reviewing its ownership of Virgin Australia and stopped equity accounting the investment on March 30, with changes in fair value now recorded in its profit and loss statement.

Virgin is also reported to be cutting back route frequency, while the Australian national carrier has also warned of a softer outlook for Australian domestic aviation.

The shares last traded at $2.51 and have declined 15 percent this year, partly reflecting rival Qantas Airways' decision to trim its expansion plans in response to weaker demand.

See Air NZ's latest investor presentation here:

https://assets.documentcloud.org/documents/2821525/AirNZInvestorPresentation.pdf

Herald

Tuesday, 03 May 2016

By Jonathan Underhill

Deal opens passage for flights to India

A new deal between New Zealand and India opens the door for a direct flight between the two countries.

The air services agreement, signed in Auckland today, should also boost tourism and trade between New Zealand and world's second most populated nation, says Transport Minister Simon Bridges.

Bridges today signed the deal with Sanjeev Balyan, India's Minister of State for Agriculture and Farmer Welfare.

The ceremony, at the Langham Hotel, was witnessed by Prime Minister John Key and Indian President Pranab Mukherjee, who is visiting New Zealand.

Mukherjee, who arrived yesterday and is due to fly out tomorrow, told the Herald this week that the number of Indian tourists coming here had risen sharply.

With more and more Indian-language films being shot here, Mukherjee said his country is "getting acquainted with the stunning natural beauty of New Zealand".

Bridges said that New Zealand airlines now have the opportunity to code-share to seven Indian cities - Bangalore, Chennai, Hyderabad, Kochi, Kolkata, Mumbai and New Delhi.

"India is an emerging superpower, and its population of 1.25 billion people presents enormous opportunities for New Zealand," the minister said.

"Our annual trade with India is worth more than $1 billion. In the year to 31 March 2016, almost 52,000 Kiwis travelled to India and close to 60,000 Indians visited New Zealand. In addition, more than 160,000 people of Indian descent live here.

"Today's signing will boost tourism, trade and personal ties between our two countries," he said.

India New Zealand Business Council treasurer Bhav Dhillon said that getting a direct flight between the two countries would "change the paradigm" of both tourism and trade.

Air New Zealand, Air India and Singapore Airlines are among the operators which have the potential to run such a direct service.

"We are very confident that there will be a very robust growth in tourist numbers from India to New Zealand once we have a direct flight between these two countries," Dhillon told the Herald this week.

"Once's there a direct flight that will really change the paradigm in terms of tourism and trade, a direct flight reduces a lot of non-tariff barriers. We think a direct flight will solve a lot of issues on the trade front as well as on the tourism front."

Since the Government's Air Transport policy was introduced in 2012, Bridges said 50 new or amended air agreements had been negotiated, bringing the total to 78.

Most of the major airlines in the world are now able to operate services to New Zealand without restriction, with 18 new air routes announced in the past year alone.

"Our success in negotiating Air Services Agreements is providing New Zealand access to a large wealth of benefits including tourism and trade. We'll continue our efforts to grow and enhance these connections, making it easier for New Zealanders to travel and trade internationally."

Hamish Fletcher

Business reporter for the NZ Herald

1 May 2016

Air NZ trials Queenstown night flight

Air New Zealand has flown the first evening flight into Queenstown in preparation for scheduled commercial services later this month.

Saturday's proving flight was the first of several planned over the coming weeks before the first commercial evening service on May 23.

From this date the airline will operate a partial evening schedule between Auckland and Queenstown with the last flight arriving in Queenstown at 6.15pm before departing for Auckland at 6.50pm.

The airline's full evening schedule will take effect from 3 July 2016 when the last departure from Queenstown will be 7.30pm and the last arrival at 9.35pm.

New runway, taxiway, approach and apron lights have been installed at the airport as part of a $19.6 million upgrade to infrastructure to allow for after dark flights. Airlines have had to

Air New Zealand chief flight operations and safety officer, Captain David Morgan said the implementation of evening flights has involved significant collaboration across multiple stakeholders.

"It really is a milestone for New Zealand aviation and we're proud to be the first airline to offer this service to customers which is sure to bring significant benefits to the Central Otago economy through the additional flights."

The airline has invested in the latest technology to enable it to operate evening flights in Queenstown under Civil Aviation Authority requirements.

Jetstar will begin transtasman flights from the end of June. The extended operating hours will be a further boost for the popular tourist resort.

About 200 lights have been installed or repositioned, including approach path indicator lights, and touchdown approach, runway centreline, runway edge and threshold lights.

The runway works, carried out over the past six months in parallel with the lighting upgrade, has involved widening the runway from 30m to 45m and resurfacing it with a 110mm asphalt overlay.

New campaign entices young professionals

https://www.youtube.com/watch?v=M86yhmqRRfs&feature=youtu.be Nelson Tasman tourism have hooked up with Jetstar, Wellington Regional Economic Development Agency, Wellington International Airport and Nelson Airport to launch a new campaign encouraging young professionals to travel to our region.

When Melly meets Welly…and Nelly stars Melbourne comedian Ash Williams as ‘Melly’, who travels to Wellington and Nelson to meet likeminded destinations just a short flight across the ditch.

Here, he meets his city soul mates ‘Welly’ (Wellingtonian Jordan Rivers) and ‘Nelly’ (Nelsonian Anneke Giblin), discovering how much they have in common, as well as their unique traits.

Gisela Purcell, International Marketing Manager at Nelson Tasman Tourism says the campaign is a fun way of showing Melburnians the diversity of our city life and beautiful scenery.

All three cities share a dedication to good coffee, love of cuisine and craft beer, and passion for the arts, says Gisela.

“On top of this, Nelson is home to phenomenal wineries and the unmissable golden sands and clear waters of Abel Tasman National Park while just a 30 minute flight away in Wellington you have a compact walkable city with vibrant street culture.”

After visiting the region for the first time as part of the campaign, Ash Williams says he’ll definitely be back.

“Between Wellington and Nelson there’s everything I’m looking for in a holiday. Cool people, great atmosphere, good times and great food. It was a real pleasure experiencing it with my local hosts, and hopefully we can encourage plenty more Aussies to pop over and check it out.”

Jetstar’s Melbourne connection has brought 62,000 passengers into Wellington since launching on 30 March 2015.

“The further new route now connecting Wellington and Nelson presents Australian visitors with opportunity to experience the best of New Zealand’s urban and scenic worlds in an easy-to-plan and action-packed long weekend just a short flight away.” says Rob Evans, CEO of Nelson Airport.

Airfares plunge: US-NZ flights as low as $328

Increased airline competition on routes between Los Angeles and New Zealand has pushed fares down as low as NZ$328 return when booked in the United States.

Travel websites in the US say that although the fare on American Airlines has sold out, there were a a number sold at this super low level. Of the US225 price, taxes make up $US109.

From late June, American will fly between Los Angeles and Auckland using a Boeing 787-8 Dreamliner.

When American Airlines announced last November it was flying the route, Air New Zealand cut some Grabaseat airfares to Los Angeles from about $785 to $499.

Fares have typically ranged around $1500 to $1600 in the past, depending on time of travel.

The best recently advertised fare from New Zealand was $699 through travel agents, helloworld.

United Airlines will also start flying from San Francisco to Auckland in July in partnership with Air New Zealand which is also putting downward pressure on prices.

Air New Zealand is also expanding capacity on its new Houston route to satisfy growing demand from Kiwis wanting to travel to the US but also renewed interest in this country by American visitors.

Auckland Airport Auckland Airport estimated that the new American Airlines daily service would boost seat capacity between New Zealand and the United States by 16 per cent , adding 165,000 seats per year and contributing $199 million annually to the New Zealand economy.

In the year to September 30 last year 2015, 237,312 Americans visited New Zealand, up 11 per cent on the previous 12 months, and 178,720 New Zealanders visited the United States, up 14 per cent.

The new United Airlines service is expected to deliver an additional 140,000 seats every year on the North American route, and contribute $190 million annually to the New Zealand economy.

Friday, 15 April 2016

Grant Bradley

Aviation, tourism and energy writer for the Business Herald

Qantas' comeback king

http://m.nzherald.co.nz/aviation/news/article.cfm?c_id=556&objectid=11622517 From huge loss to soaring profit, the Aussie airline has made a dramatic turnaround. But boss Alan Joyce never had any doubts, he tells Grant Bradley

By Grant Bradley

Alan Joyce has been at the centre of what has been described as the biggest turnaround in Australian corporate history.

And as he nears eight years as chief executive of Qantas, Joyce characteristically says he had very little doubt the airline could pull it off.

From a A$2.8 billion loss in 2013-14, the airline reported statutory net profit after tax of A$688 million for the first six months of this year. Qantas is now in a position to return close to A$1 billion to shareholders this year.

This from an airline which faced worker outrage when it grounded its fleet during a high-stakes industrial battle in 2011, whose value plunged by more than A$1 billion after a 2012 profit downgrade, leaving it a takeover target, and is in the midst of laying off 5000 workers to cut costs.

In the dark financial days, Joyce was a target for politicians, and a public petition called on him to resign.

In Auckland this week to talk to New Zealand company directors about running a volatile business, Joyce says, with a fair degree of understatement: "There's been a lot of positive and a lot of tough times."

Like Air New Zealand in this country, 96-year-old Qantas is embedded deep in the Australian psyche. Most Aussies feel a deep sense of ownership of the Red Roo and anyone who runs it is under minute scrutiny and intense pressure.

But Joyce has a thick hide. "I remember doing an interview on Australian TV and we had two commentators who had done a poll - 90 per cent said I should resign and they asked my reaction." His reply was blunt: "It's not a popularity contest." Joyce says what mattered to him was whether the board and shareholders thought the airline was on track. They did, and Qantas stuck with it.

One of those strategies is to solidify its presence in New Zealand, largely through its budget offshoot, Jetstar, which was set up under Joyce and first flew in Australia from Newcastle to Melbourne in 2003.

Jetstar, with its distinctive orange livery, has been flying across the Tasman since 2005, on main trunk routes since 2009 and now into the heartland on regional routes.

Those routes now feed into a growing international network Qantas has forged through partnerships with global giants Emirates, China Eastern and American Airlines.

The better Qantas is, the better Air New Zealand is - the consumer in New Zealand wins and that's great for everyone.

It means Kiwis can fly on a Qantas ticket from Dunedin to Dubai and on to Dublin aboard partner Emirates, and from late June, Nelson to New Orleans on American.In addition to providing cut-rate fares to leisure travellers, Joyce says that to be truly competitive in New Zealand, Qantas needs to offer a network that can appeal to corporate and government accounts (which will be up for tender later this year), as well as looking after the travel trade.

This was the rationale for the regional operation, the domestic operation and an international operation - which needs to have a transpacific component.

"We were clearly, in some parts of that, not competitive," he says. "Now we have all components of it."

That's why Qantas is refreshing its 570,000-member frequent flyer programme here - generous and popular with the corporate market when Qantas flew main trunk routes in this country - which is another way of attacking Air New Zealand in its home patch, where it commands 80 per cent of the domestic market.From a working class family in Dublin, Joyce gained a Masters degree in mathematics from prestigious Trinity College and started his aviation career at Aer Lingus, where he was involved in setting up its low-cost arm.In 1996 he took a job at Ansett, a well-liked Australian icon but with high costs and a jumbled fleet. It collapsed five years later.

It was here that Joyce came into contact with Air New Zealand, which was moving towards ownership of the struggling airline. As noted in Sydney journalist Matt O'Sullivan's book Mayday, which details Qantas' hard financial landing, Joyce and other executives were sidelined by Air New Zealand bosses. Joyce became part of the exodus from Ansett to Qantas and was escorted off the Ansett premises by a security guard when he told his bosses he was leaving.

Whether that has left hard feelings is hard to judge, for the relationship with Air New Zealand appears straightforward - on the surface at least.

Not all airlines are benefiting from lower fuel. Some got their hedging wrong. Qantas wasn't one of them. This may look like luck to people outside the industry but it actually comes down to good management.

Keen competitors, respect for each other, jokey Aussie versus Kiwi publicity stunts and cordial relations at the top level - he will have dinner with Air New Zealand chief executive Christopher Luxon if there's an opportunity.

But beneath all that is a cut-throat rivalry for a growing, but ultimately finite, number of travellers, and Air New Zealand marketing campaigns that cut a little deeper as they target Qantas and Jetstar.

In Auckland, Joyce is chatty but diplomatic. "Both [Air NZ and Qantas] are good airlines, have their traditions and brands and a reputation for winning," he says.

"The better Qantas is, the better Air New Zealand is - the consumer in New Zealand wins and that's great for everyone."

Luxon has repeated a line (based on the All Blacks' success at home against the Wallabies) that New Zealand doesn't lose to Australia at home. Joyce has a different take on that, pointing out that most of the 1500-strong Qantas group workforce in this country are New Zealanders, so if his airline does score a win here, it's Kiwis who are doing the winning.

His ability to stay on message was apparent during a sidelines meeting with the Herald at an International Air Transport Association gathering in Cape Town in 2013.

As the airline was heading for a A$2.8 billion loss, Joyce was unrelentingly optimistic about its prospects.

And sure enough, when the grim result was announced the next year, the headline read: "Qantas upbeat despite record loss."

Prescient maybe, confident certainly, but don't dare overemphasise luck, especially when it comes to the collapse in fuel prices.

After the airline's strong full-year result last year, Qantas responded strongly to a Sydney Morning Herald editorial that said a "great deal of luck fuelled Qantas' reversal". The airline publicly responded to what it described as a "begrudging" acknowledgement of its turnaround, saying cheaper fuel helped the A$557 million profit - but the Qantas transformation programme contributed much more.

"Not all airlines are benefiting from lower fuel. Some got their hedging wrong. Qantas wasn't one of them. This may look like luck to people outside the industry but it actually comes down to good management," said the airline.

This week Joyce wasn't talking luck or fuel, but concentrating on growth and the transformation programme unveiled in 2014, aiming to save A$2 billion by cutting 5000 jobs, deferring the purchase or selling 50 aircraft, cutting A$1 billion in capital expenditure and freezing wages.

(The pay shackles came off last year, though, with Joyce's salary tripling to nearly A$12 million and A$90 million in bonuses for staff who accepted an 18-month freeze.)

The year before, to continental Europe we carried 400,000 passengers -- this year it will be 1.6 million passengers.

Joyce says the turnaround has been especially dramatic in the international business - from a half billion dollar loss two years ago to a A$200 million profit in the first half of this year.Not so long ago, there were doubts about whether the international business would even survive but it is now growing by 10 per cent a year. There are new services from Brisbane to Christchurch and to Wellington, and seasonal Perth-Auckland flights.

Joyce says the transformation has delivered A$1.4 billion in savings to date, with more than A$800 million of that from the international business.

"It's made routes that we couldn't make money on profitable for us. We've re-entered markets like San Fancisco that we're now making money on and that's a big change from where we were a few years ago." The 2012 Emirates revenue-sharing partnership was seen as a "huge risk" but it was working because the Dubai-based carrier's extensive European network meant a huge surge in passengers.

"The year before, to continental Europe we carried 400,000 passengers - this year it will be 1.6 million passengers," Joyce says.

Qantas Group CEO Alan Joyce with Jetstar Group CEO Jayne Hrdlicka.

Qantas has also forged a bond with China Eastern, offering what he says is even greater potential given the upsurge in Chinese tourists to more than 1 million visiting Australia.Meanwhile, Qantas' deepening relationship with US carrier American is allowing it to fly to Sydney and, from June 23, to Auckland, bringing what Joyce says is much needed competition.

But sacking thousands of people was tough.

"You never want to be in the business of being in the tough position of making people redundant but at the end of the day that allowed Qantas to re-baseline itself and to grow again."

Unions have a different view. In a paper, The Qantas Effect, Australia's Transport Workers Union says the airline is hiring low-paid part-timers and casual workers.

"As the market leader Qantas is creating an environment where other airlines and companies that service them are following them in a race to the bottom on workers' wages and conditions."

As the market leader Qantas is creating an environment where other airlines and companies that service them are following them in a race to the bottom on workers' wages and conditions.

But one former Qantas staffer here says Joyce was highly regarded by New Zealand workers, and Joyce says engagement among 30,000 Qantas employees is running high.

And the savings meant the airline had cut its costs from around 40 per cent higher than Virgin Australia to about 10 per cent. The goal is to reach 5 per cent higher than Virgin, the airline it battled in a bitter and costly war for domestic dominance that ended in an uneasy truce in May 2014.

Qantas was furious at hundreds of millions of dollars of foreign capital (from Virgin shareholders Air NZ, Etihad and Singapore Airlines) being pumped into its rival.

Despite that, it is Qantas that has emerged from the capacity and lounge-building war with a stronger balance sheet than Virgin. One spinoff has been the likely exit of Air New Zealand from its 26 per cent stake in Virgin, built up to consolidate Air NZ's presence in the Australian domestic market.

Publicly, Qantas is playing a straight bat but there is doubtless some satisfaction that its New Zealand rival has again found an equity investment across the Tasman tough going.

"We will let Air New Zealand sort out what they want to do - it's their call about where they put their money and what they regard as a good investment," says Joyce.

Jetstar and Qantas aircraft berthed at the at Melbourne's Tullamarine Airport, Melbourne. Photo / Bloomberg

And there's also the prospect of Jetstar expanding further into Air New Zealand's back yard.Last December Jetstar launched regional flights and now flies to Napier, New Plymouth, Palmerston North and Nelson.

Jetstar and Qantas aircraft berthed at the at Melbourne's Tullamarine Airport, Melbourne. Photo / Bloomberg

And there's also the prospect of Jetstar expanding further into Air New Zealand's back yard.Last December Jetstar launched regional flights and now flies to Napier, New Plymouth, Palmerston North and Nelson.

"When the time is right we'll be approaching [other centres] and giving them the appropriate level of service but you need to bed down what you have and build the foundation," says Joyce. He calls the response to the regional services "phenomenal": planes are 80 per cent full and punctuality is improving after a rough start.

"That performance has been exceptionally good. It's well ahead of their business case."

Jetstar is also expanding its transtasman operation, with a daily winter evening service between Melbourne and Queenstown during the ski season.

Travel agents love airlines that are growing and Flight Centre NZ managing director David Coombes says Qantas' long-term commitment to this market reflects the high value generated from a small population.

Kiwis' love of travel is renowned, and as well as supporting a strong national carrier, has created an environment where an increasing number of international carriers view New Zealand as an attractive proposition.

David Libeau, general manager, marketing for Helloworld, says an expanding Qantas could only be great news for Kiwi travellers. "Airlines need to generate a profit to invest in new products, routes and services and we are seeing this with Qantas."

Or, as Joyce puts it, Qantas is now in a "sweet spot".

Asked this year whether he had any plans to move on from that zone, Joyce, who doesn't have a fixed term contract, said he was keen on staying put.

"I have always said if I'm enjoying it, if I have a lot more to deliver, if I have a lot more passion for the job, if the board and shareholders want me to continue, then I'll continue.

"So I'm going to be here for some time. There are no plans to leave -there's more to complete."

Alan Joyce:

• Age: 50. Chief executive and managing director of Qantas since November 2008.

• From 2003, founding chief executive of Jetstar for five years. Before his appointment at Jetstar, he spent over 15 years at Qantas, Ansett and Aer Lingus.

• Chairman of the International Air Transport Association between July 2012 and June 2013.

• In 2015 named Airline CEO of the Year by CAPA Centre for Aviation.

• Second most influential gay business leader in the OUTstanding / Financial Times list of "Top 100 Leading LGBT Executives".

• Director of the Business Council of Australia; Member of the Male Champions of Change; Ambassador for the Australian Indigenous Education Foundation NSW.

• Bachelor of Science (Honours) in applied science (physics and mathematics); Master of Science in management science.

Grant Bradley

Aviation, tourism and energy writer for the Business Herald

Thursday, 14 April 2016

Singapore Airlines increases flights to and from Christchurch for summer

 

Singapore Airlines have again announced it will increase its flights to and from Christchurch over summer.

The airline will now operate 10 round-trip flights a week for the summer peak travel period — adding an extra 8,130 seats over the course of the operation.

The additional flights mean Singapore Airlines will notch up a new milestone, flying into the South Island 396 times in 12 months.

This year also marked 30 years since the airline began flying into Christchurch.

Singapore Airlines New Zealand general manager Simon Turcotte​ said demand for flights into Christchurch in summer continued to grow each year.

"Over the 2015-16 summer we operated 28 supplementary flights and one charter, adding more than 7,850 seats into Christchurch," Turcotte said.

"Christchurch continues to be an extremely important part of our global route network and we are very grateful for the support we receive from Christchurch International Airport, travel agents in the area and the wider South Island community."

The extra flights will operate as flight numbers SQ296 and SQ295, and will be serviced by a fleet of refitted 777-200ER aircraft, offering 26 business class and 245 economy class seats.

The extra service would run from 23 November 2016 to 6 February 2017.

Singapore Airlines currently operates 14 round-trip flights from Auckland and Christchurch to Singapore per week.

Stuff

Last updated 22:48, April 11 2016

Air NZ to fly direct to Manila

Air New Zealand has announced it will fly direct to the capital of the Philippines, Manila, starting from December. The latest expansion to its Pacific Rim network will see the year round service operate three times a week using a Boeing 767-300 aircraft, with a flight time of 10 and a half hours each way.

Air New Zealand Chief Executive Officer Christopher Luxon said the airline expects the service to be popular at both ends of the route.

"As the only non-stop service between New Zealand and the Philippines, our flight will be quicker and more convenient for travellers than the fastest current option which flies indirect, potentially saving up to two and a half hours each way," Luxon said.

Luxon said the Filipino population in New Zealand has more than tripled since 2001 and is now the third largest Asian ethnic group, with around 40,000 Filipinos resident in New Zealand.

"The number of visitors from the Philippines is also continuing to grow rapidly, up more than 20 percent in the past year alone so we're anticipating that demand for this service will be steady in both directions."

The addition of direct flights to Manila brings the total number of Air New Zealand's international destinations to 32.

Late last year Philippine Airlines' began its four times-a-week service to Auckland from Manila.

The total flight time is estimated between 11 hours and 12 hours, including the one-hour Cairns stopover, just an hour longer than Air New Zealand's proposed flight.

Auckland Airport's general manager of aeronautical commercial Norris Carter said the new service provides a great boost for New Zealand's tourism industry.

"New Zealand has experienced solid tourism growth from the Philippines in recent years and the addition of Air New Zealand services on the route will help to further grow this important emerging tourism market," Carter said.

Visitor arrivals from the Philippines have increased 19 per cent annually over the last three years, with holidaying visitors one of the main driving factors for that growth. Kiwi travellers visiting the Philippines has been growing at 10 per cent per year over the same period, he said.

"Auckland Airport estimates the new Air New Zealand service to Manila will annually deliver an additional 71,800 seats between New Zealand and the Philippines, and contribute $29 million in tourism spend to the New Zealand economy every year.

"That is great news for New Zealand, especially for our tourism industry."

Commercial director at House of Travel Brent Thomas said the Philippines was just inside the top 20 as a destination for New Zealanders.

Herald

Wednesday, 06 April 2016

By Aimee Shaw

New airline routes opened up

By Grant Bradley

New Zealand has signed 10 new or amended air services agreements, opening up the possibility of more direct connections with countries ranging from Turkey to The Bahamas.

Cabinet today has approved the signing of new air services agreements with Israel, Mauritius, Nepal, Nigeria, Pakistan, Panama and Portugal.

Other arrangements negotiated include:

• A negotiation with Turkey to permit airlines from each country to commence services using their own aircraft, where previously airlines were only allowed to code-share. New arrangements allow the airlines to operate up to 14 passenger and seven cargo services per week.

• An amendment to New Zealand's 1967 Air Transport Agreement with France. This introduces new route opportunities for New Zealand and New Caledonia airlines.

• The negotiation of a code-share arrangement with The Bahamas.

"Air services agreements pave the way for airlines to operate new routes in and out of New Zealand, creating more links with the rest of the world," Transport Minister Simon Bridges said.

Turkey in particular offered strong potential.

"Allowing Turkish Airlines to fly here is an interesting opportunity. It's one of the fastest growing airlines in the world," said Bridges.

Turkish Airlines had previously scoped flights to Australia, often the way in which airlines introduce themselves to the New Zealand market.

Services to The Bahamas could through Air New Zealand flying to Houston and its code share partner United Airways flying on to the Caribbean.

Growing competition and increasing the number of available seats could be expected to drive down prices and give prospective visitors to New Zealand more choices.

Air services agreements pave the way for airlines to operate new routes in and out of New Zealand, creating more links with the rest of the world.

Code sharing allowed, Bridges said, more flights also allow for more high-value freight connections, and increasing regional connections to international flights creates more opportunities for provincial exporters.

Since 2012 about 50 agreements had been signed.

"Most of the major airlines in the world are now able to operate services to New Zealand without restriction.''

More than 70 air services agreements are in place with 17 new air routes announced in the past year.

The 10 new agreements and arrangements were negotiated at the International Civil Aviation Negotiation Conference, held in Turkey last year. Although the agreements don't guarantee services will start, they are required to be in place before they do.

Grant Bradley

Aviation, tourism and energy writer for the Business Herald

Monday, 04 April 2016

Nelson's Originair not flying but hopes to be back in the air soon, says Inglis

Nelson-based Originair is temporarily earthbound but hopes to be flying again shortly, managing director Robert Inglis says.

However, it would operate a reduced service aimed mainly at the Palmerston North-Nelson route and charter work, he said.

Fairfax confirmed on Monday that the fledgling Nelson-based airline had ceased flying on Friday April 1.

Originair has been operating Nelson-Palmerston North and Nelson-Wellington, and its website-advertised schedule has flights to and from both destinations on Mondays, Wednesdays, Thursdays, Saturdays and Sundays.

The website shows all Nelson-Wellington and Nelson-Palmerston North flights are  "unavailable" or "fully booked" for the next two months.

But it appears to be open for reservations on a restricted timetable from mid-June.

Airport chief executive Rob Evans said Originair had not provided any advice about a change in its timetabling or status "but you would best get any of this information from Originair themselves".

In February it emerged that the Civil Aviation Authority had placed temporary restrictions stopping Air Freight NZ Ltd from operating Originair's planes after safety concerns were raised.

Using its operating certificate, Air Freight NZ had been flying two British Aerospace Jetstream 32 aircraft in Originair livery.

Inglis said that without its own operating certificate, Originair was a "virtual airline" and had arranged a temporary fix using two Metroliners operated by Airwork NZ Ltd to get it through the peak season.

This arrangement finished at the end of last month.

He said he was expecting imminent advice from Air Freight NZ that its "one or two issues" with the CAA had been sorted out and it would begin flying for Originair again.

That would allow the airline to reinstate its booking system.

He couldn't say exactly when this would happen because the CAA's investigation had "nothing to do with Originair", but he understood the clearance was due any day.

However, if it did not come Originair had other options.

"There's at least one other party that we could operate the services with."

Originair began flying the Nelson-Palmerston North route in mid-August last year, and added Nelson-Wellington in September.

Inglis said the airline had received "very good support" on the Palmerston North route but the Wellington market had become more competitive with the arrival of Jetstar.

In a separate development, he confirmed that an Originair charter flight to Warbirds Over Wanaka at Easter was cancelled at the last minute.

This was because the Airwork operating certificate did not cover Wanaka Airport, which hadn't been known when the bookings were taken.

Originair had gone to some trouble to re-book passengers on other airlines and to provide refunds for those who decided not to go, Inglis said.

Stuff Nelson Mail

BILL MOORE

Last updated 18:28, April 4 2016

 

Big year for tourism in Nelson

 

An early Easter has helped Nelson's bumper tourist season continue.

There were concerns the run of poor weather the week before the Easter long-weekend would put people off.

Department of Conservation Motueka operations manager Mark Townsend said the "stunning forecast" meant everything was full.

"In the Abel Tasman we've had a full park through Easter. Some huts are still full now," he said.

"It's been an absolute record season for us. It exceeded all our expectations."

He said he had noticed a growth in the slower autumn shoulder season and an increase in school group visits to previous years.

"It was a great Easter. It's a record season going on for us."

Golden Bay Visitor Centre manager Casey Port said the door count saw 337 people through the door over the weekend in comparison to 125 on Saturday last week.

Port said Easter falling earlier this year had an impact and kept holiday-makers coming through.

"It was definitely a busier time, especially with the weather, the weather was great," Port said.

She said the 15 per cent surcharge at hospitality businesses didn't turn people away.

"The cafes were packed that's for sure. It was pretty good - very good trading."

Overall Port said January and February were the busiest two months of summer.

"We've had a great summer. We feel like it kind of kept trickling in for March."

Two 19-year-old German backpackers at iSite Nelson said they had stayed in Nelson since early February for the good weather and work, but have been in New Zealand since October and plan to stick around until June.

Kristine Schweinshaut said New Zealand seemed like a great place to spend a gap year and be immersed in nature.

Her friend Julia Schmitt spent the Easter long-weekend trekking Abel Tasman.

"The landscape was really beautiful," she said.

Schmitt said she would recommend Nelson to friends at home, but did find brasseries expensive.

Schweinshaut said the highlight for her was Tongariro National Park in the north.

Uniquely Nelson manager Simon Duffy also put the tourist numbers down to an expansion in the shoulder season and a run of good weather.

"The town is very busy. There are lots of tourist people in town, at the shops, markets and Mapua Easter Fair," he said.

Duffy said there was a real "buzz" about town and a lot of campervans around.

"It has been a long summer for Nelson as far as weather goes and the airline prices has helped bring people to Nelson. It's a lot more affordable to come down even just for a weekend away," Duffy said.

"It's very positive. The Paymark results over Christmas and January, as far as dollar spend, is reflective of a great summer and New Year for tourism."

When Duffy met with tourists over the weekend they expressed their delight in the area.

"Nelson has quite an authentic feel about it and that comes from the people of Nelson. It's a nice place to be," he said.

Duffy expected tourist numbers to drop off as winter approaches.

Nelson also swelled on Saturday when 457 competitors, their friends and families from across New Zealand, Australia, Europe and the United Kingdom stopped in town for the New Zealand Orienteering Championships.

Nelson Orienteering Club president Jill Clendon said it was the first one to be held in Nelson for at least 10 years and she expected the event would have had a positive impact on local businesses.

"We had competitors as young as seven and in their 80s," she said.

Stuff Nelson Mail

JESSICA LONG

Last updated 10:41, April 1 2016

Could this plane stop you getting jetlag?

 

Add to this the humidification system to decrease skin flakiness, throat scratchiness and dry eyes and you've got one comfortable flight. 19 hours stuck on a plane may never be a lot of fun, but the roll out of the Airbus A350 means we'll be able to make the trip more comfortably than ever before. The Airbus A350 is capable of pressurising a cabin to a more comfortable level than standard, which eases jet lag and allows you to feel more comfortable.Singapore Airlines has taken delivery of its first new Airbus A350-900 XWB, an aircraft that could potentially change the shape of international travel.

The "XWB" in its name stands for "Extra Wide Body" and the new aircraft is six inches wider than standard Boeing 787s, with a more vertical wall design to improve shoulder space.

But perhaps the most exciting development of these new aircraft is the ability to stave off jetlag.

It is also designed with a LED lighting system that can create 16.7 million shades of colour to simulate the natural phases of the day which will help reduce jet lag.

Stuff

Last updated 11:01, April 1 2016

Air Asia X touches down in Auckland

http://m.nzherald.co.nz/aviation/news/article.cfm?c_id=556&objectid=11610521 The first flight to Auckland by budget carrier AirAsia X flight has landed, starting a service that will substantially boost capacity to the Gold Coast and on the airline's home base, Malaysia.

Flight D7 206 landed at about 4.12pm marking a return to this country after flying to Christchurch for about a year in 2011-12.

The flight was delayed leaving the Gold Coast by a passport processing problem that affected all Australian airports.

Auckland Airport has estimated the new AirAsia X daily services will be worth about $176 million to the economy.

The airline is Southeast Asia's biggest budget carrier and is using an A330-300 aircraft on the route with a seating capacity of 377.

That's a little below the Airbus' maximum of around 400 seats for regional flights.

The configuration will be AirAsia X's standard configuration of 365 economy seats and 12 premium flatbed seats.

AirAsia X's network covers Southeast Asia, North Asia, India, Australia and now New Zealand. Its key hubs are in Kuala Lumpur, Singapore, Jakarta, Bali, Bangkok, Delhi, Bengaluru, Manila and Tokyo.

This will provide more choice for New Zealanders travelling to those destinations and capacity for tourists from Malaysia, India and Indonesia, markets which are growing rapidly.

Over the past year 34,000 visitors from Malaysia, 41,000 from India and 18,000 from Indonesia came to New Zealand.

The airline flew to Christchurch from Malaysia for about a year but quit the service following the 2011 earthquakes, blaming sagging demand at a time fuel prices were going up sharply.

AirAsia has, like other airlines, taken advantage of relatively low fuel prices during the past year to expand to new destinations.

The airline launched with $99 promotional economy fares from Auckland to the Gold Coast and $249 to Kuala Lumpur with travel agents predicting the increase in capacity will keep a lid on prices to both destinations.

The Gold Coast-Auckland route is currently served with 20 weekly narrowbody flights, including eight from Jetstar, seven from Virgin Australia and five from Air New Zealand, Capa Centre of Aviation says. They offer about 7000 weekly seats on the route but capacity varies depending on the time of year.

READ MORE:

• AirAsia X launches with Gold Coast $99 fares

• AirAsia X flies back into NZ

AirAsia is the latest airline to come to New Zealand and existing carriers are piling on new capacity to serve a travel boom in what's being called a new golden age in air travel.

International capacity through Auckland Airport has grown by close to 10 per cent in the past five years as Kiwis travel overseas in record numbers - up 6 per cent last year to about 2.4 million - and the number of overseas visitors hits new highs, now above 3 million a year.

According to figures supplied to the Ministry of Transport, there will be close to a million extra seats in and out of New Zealand this year.

Around the world, air travel increased 6.5 per cent last year, when more than 3.5 billion passengers were carried. As much as half the increase in passengers is estimated to have been driven by falling fares.

Grant Bradley

Aviation, tourism and energy writer for the Business Herald

Wednesday, 23 March 2016

Flight Check: Auckland to Rarotonga on Jetstar

Tracey Bond flies on Jetstar JQ129, Auckland to Rarotonga.

By Tracey Bond

The plane: A320 - this was the first time in 10 years a new airline has flown to the Cook Islands. Jetstar hopes it will make the route more affordable and encourage tourists to spend more money in the actual islands rather than on the airfare.

Price: Regular one-way fares from Auckland start from $219. The airline has three flights a week.

On time: Everyone was on board early for this inaugural flight. It takes three hours and 30 minutes to get to Rarotonga. We arrived 15 minutes ahead of schedule.

My seat: 2F with the basic starter fare.

Fellow passengers: New Zealanders and Australians heading off on holiday with a sprinkling of Cook Islanders as well as Jetstar executives and Cook Island officials.

How full: There were about 40 seats free so there was plenty of room to move about the cabin or spread out on to free seats.

Entertainment: The Jetstar magazine is available in all seat pockets with lots of travel advice, puzzles and quizzes. Plenty of people were using their own devices to watch films or TV shows and listen to music. Or you could go old-school and read a book.

Food and drink: With Jetstar, you can pre-purchase from the Jetstar Cafe online or pay on board using a credit card. There's a wide range of snacks, sandwiches, as well as a handful of hot options (ham and cheese toasties and pies) with some healthier salads available. The combo deals are good value: $10 for cheese and biscuits with a glass of wine.

Luggage: 7kg of hand luggage is included with the starter fare. Additional hold luggage is available at a cost.

The toilets: Three loos on this flight.

The airport experience: Check-in was a breeze. It was easy to get into the holiday vibe with the sounds of the Cook Islands playing as passengers waited in a queue. To celebrate the new route, all guests travelling to Rarotonga received a Jetstar swag bag containing a water bottle, luggage tag, visor and a guide to the Cook Islands.

Would I fly this again: The flight was quick and did what it said on the box: the cabin crew were super-efficient, friendly and helpful. Additional competition on this route gives travellers more flight times and price points to maximise their time in the beautiful Cooks. So that's a yes.

Herald

Tracey Bond - Tracey Bond is a travel writer based in Auckland.

Thursday, 31 March 2016

Air NZ set to ditch Virgin stake

Analyst says New Zealand airline is faced with a choice -- either tip more money in or get out now.

By Grant Bradley

Air New Zealand is set to bail out of its 26 per cent stake in Virgin Australia just over a week after agreeing to lend it close to $150 million and after years of spending close to half a billion dollars building up its holding.

At Virgin's current share price Air New Zealand faces a loss on its investment but selling down its stake is seen by analysts as being positive for the Kiwi carrier.

Although the airline is understood to be concerned about the scale of its commitment to Virgin relative to its own size, it is not seen as a desperate vendor and there are other large airline shareholders which could be potential buyers.

One analyst said the New Zealand airline was faced with a choice -- either tip more money into Virgin or get out now.

In an announcement which surprised the market, Air New Zealand said it was exploring options which could include a possible sale of all, or part, of its shareholding.

"Air New Zealand does not want a large minority equity position in Virgin Australia as it focuses on its own growth opportunities," said chairman Tony Carter.

Air New Zealand chief executive Christopher Luxon will quit Virgin's board immediately.

Andy Bowley, head of research at Forsyth Barr, said: "You either put more money in the pot which is increasing your investment and therefore your risk or you walk away."

Air New Zealand had to weigh up the choice of owning an equity stake in Virgin versus the financial reality.

While Virgin's financial performance had improved in the past year, it was still heavily indebted and the loan -- which was part of a $476 million loan announced last week -- was to help repair its balance sheet.

Virgin's debt is forecast by analysts at Merrill Lynch to balloon from around A$1.7 billion to more than A$2 billion in the next year.

First NZ Capital and Credit Suisse are advising Air New Zealand on options for its Virgin holding.

Air New Zealand shares closed up 1c at $2.86.

In its announcement yesterday, Air New Zealand said Virgin Australia has undertaken a successful transformation programme. However, early last year Luxon had expressed some frustration at how long it was taking the Australian airline to become profitable.

Since doing an alliance deal in 2010, Air New Zealand gradually built up its stake in Virgin which was seen as a way of exerting greater control over the airline which was seen as important in regaining a presence in the Australian domestic market after its disastrous Ansett foray and helping both airlines rationalise their transtasman operations.

Air New Zealand has spent around $480 million building up its stake of 914 million shares in Virgin. Before Virgin entered a trading halt yesterday Air New Zealand's stake was worth $381 million, according to Deutsche Bank analysis which said a divestment would be positive for Air New Zealand.

"Notwithstanding value already lost, we view the potential sale as a positive given the quantum of capital released to Air (NZ) and the lack of visibility regarding future returns from the shareholding. While Virgin has made progress in recent times, there have been no dividends paid to Air NZ and there is a chance Virgin will require more capital in the future."

Air New Zealand could use the capital in its own operations, or to degear the balance sheet.

Etihad Airways is Virgin Australia's second biggest shareholder with a 24 per cent stake. Singapore Airlines holds the third biggest stake, at 15.6 per cent, while Virgin Group has a 10 per cent shareholding.

The two airlines are seen as potential buyers of the Air New Zealand stake although ownership rules in Australia could trigger a full takeover.

Grant Bradley

Aviation, tourism and energy writer for the Business Herald

Thursday, 31 March 2016

US air fares plunge - $699 return

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11614053 By Grant Bradley

A travel agent is offering return seats from Auckland to Los Angeles for $699 and add-on fares to New York, Chicago or Miami for just another $10.

Helloworld is selling 200 seats aboard American Airlines' new service at the cut rate price - $100 lower than those announced yesterday.

The agency is selling the seats as a loss leader and helloworld general manager of marketing David Libeau said he expected them to sell out quickly.

``These prices are not sustainable long term but this is fun while it lasts,'' he said

``At $699 round trip to LA I would be surprised if we see anything lower in the market but you never know. These are loss leaders to drive business on the North American route and drive market share.''

Those opting for the $10 add-on flights further east must pay for accommodation or a cruise to the value of $500 or more.

Travel is between October 15 and December 15.

``The market is very competitive right now which has been driven by increased competition on the North American routes, particularly with American Airlines (to LA) and United Airlines (to San Francisco ) about to commence nonstop services from Auckland,'' said Libeau.

``This has driven a frenzy of sales activity which is great for the consumer while it lasts.''

American Airlines yesterday released Auckland-Los Angeles $799 return fares for later this year.

The airline, which has teamed up with partner Qantas to take on Air New Zealand on the route, will start flights in June using a Boeing 787-8 Dreamliner.

The fares are for travel between October 15 and December 15 and go on sale to midnight on April 1.

Travel is between October 15 and December 15.

`The market is very competitive right now which has been driven by increased competition on the North American routes, particularly with American Airlines (to LA) and United Airlines (to San Francisco ) about to commence nonstop services from Auckland,'' said Libeau.

``This has driven a frenzy of sales activity which is great for the consumer while it lasts.''

American Airlines yesterday released Auckland-Los Angeles $799 return fares for later this year.

The airline, which has teamed up with partner Qantas to take on Air New Zealand on the route, will start flights in June using a Boeing 787-8 Dreamliner.

The fares are for travel between October 15 and December 15 and go on sale to midnight on April 1.

"Five years ago return airfares on sale to LA retailed at between $1500 and $1600, double the cost of the airfare we have available through American Airlines from today. Increased capacity and competition among airlines continue to push airfare prices down - we believe this deal will be extremely well-received by Kiwis and is a sign of airfare pricing to come,'' House of Travel commercial director Brent Thomas said

Erwan Perhirin, American Airlines vice president, Asia Pacific said he expected competition to remain intense.

"It's one example of what choice and competition will bring to the market," he said.

This has allowed us to expand our footprint without investing in new capacity. We didn't have the aircraft to get into the route.

American Airlines is the world's biggest emerged from bankruptcy protection in 2013 but since its merger with US Airlines, restructuring and tail winds from lower fuel costs has made record profits and is growing aggressively.

In the past three years it has ordered 1000 new aircraft and is adding new planes to its fleet at the rate of two a week.

Perhirin said since announcing it would re-enter the New Zealand market, after a gap of 24 years, demand for its flights had been strong.

Airlines have struggled to make the transpacific market pay in the past, including Qantas which pulled out of the Auckland-Los Angeles route four years ago.

However, Pershirin said his airline was confident about the business case this time around for the flights which will be daily for much of the year.

"We don't go into a route without the full expectation and commitment to succeed and while pricing is one thing what we'll be focusing on is competing on product and service."

The American Airlines Dreamliners have a business class cabin with lie flat beds and offer wifi throughout the plane for US$20 a flight. It was also relying on the expertise of its revenue partner, Qantas.

"Working with Qantas, adopting best practices, tailoring the product and service offering to local expectations is going to be part of winning a long term viability," he said.

Stephen Thompson, Qantas senior vice president Americas, NZ, Pacific Islands and Japan, said his airline didn't have the right plane when it last flew here so struggled and crucially, wasn't able to use a partner's aircraft.

"This has allowed us to expand our footprint without investing in new capacity. We didn't have the aircraft to get into the route," he said.

The Australian airline has expanded in New Zealand with Jetstar flying into regional routes meaning passengers were able to fly on routes such as from Nelson to New Orleans more seamlessly on the Qantas-American partnership.

Sean Berenson, Flight Centre NZ general manager product said there had been considerable movement in the last six months with new carriers entering the New Zealand-US market and a marked decrease in pricing.

A couple of years ago a good tactical fare would have been around $1599.

``I imagine we'll see pricing continue to become ever more competitive on this route and its likely we'll see fares being really good day in and day out as opposed to really good tactical fares less often.''

Grant Bradley

Aviation, tourism and energy writer for the Business Herald

Thursday, 31 March 2016

Kiwi air links boom - Who's flying here now?

Fasten your seatbelts, kiwis: our airline connections to the rest of the world are improving and quite dramatically lately.

Here's a look at the new airlines and destinations, offering a huge range of new travel options.

A number of global carriers have made big announcements about routes into and out of New Zealand lately. Not only do we have more choice, but airfares are getting cheaper and the level of onboard luxury is improving.

American Airlines

Just this week, American Airlines said it would slash prices on the Auckland-Los Angeles route, releasing limited highly competitive $799 return fares for later this year.

Passengers from Wellington and Christchurch can travel via Auckland for another $100 each. The Wellington travel period is from October 17 to December 15 and the Christchurch window between October 15 and November 30.

AirAsia X

Just last week, budget carrier AirAsia X held a big event in Auckland and it has started a service that will substantially boost capacity to the Gold Coast and on the airline's home base, Malaysia.

The airline launched with $99 promotional economy fares from Auckland to the Gold Coast and $249 to Kuala Lumpur with travel agents predicting the increase in capacity will keep a lid on prices to both destinations.

AirAsia X's network covers Southeast Asia, North Asia, India, Australia and now New Zealand. Its key hubs are in Kuala Lumpur, Singapore, Jakarta, Bali, Bangkok, Delhi, Bengaluru, Manila and Tokyo.

This will provide more choice for New Zealanders travelling to those destinations and capacity for tourists from Malaysia, India and Indonesia, markets which are growing rapidly.

Emirates

The Dubai-headquartered airline's non-stop to Auckland-Dubai route means passengers can knock more than three hours off a flight which had been routed through Australia previously and more significantly on to Europe. The new direct flight was launched as the world's longest, taking more than 16 hours to get from here up to Dubai.

Hawaiian Airlines

This airline is offering highly competitive deals. The Honolulu-based airline has been flying to Auckland for about three years but already sees the potential for more capacity.

Air New Zealand

Our national carrier started flying to Buenos Aires and Houston in December and begins seasonal flights to Vietnam this winter. From June to October, Air New Zealand will fly three times a week from Auckland to Ho Chi Minh City's Tan Son Nhat International Airport with the potential to expand the season in subsequent years.

Philippine Airlines

Philippine Airlines is now flying to Auckland from Manila, with the potential to bring nearly 65,000 tourists a year to New Zealand. It will be the first time the airline has operated to New Zealand. Philippine Airlines will operate four days a week using an Airbus A320 with a stopover in Cairns, Australia.

Anne Gibson

Property editor of the NZ Herald

Thursday, 31 March 2016

Christchurch airport 'ticks a box' in building 200-room Novotel for short stays

Christchurch airport is "ticking a box" for short-stay accommodation with plans to build a 200-room Novotel hotel for late-night flyers.

The airport company is spending $80 million on the 4.5 star hotel, set to open by the end of 2017. It confirms details of hotel plans first announced in 2015.

Christchurch International Airport chief executive Malcolm Johns said the Novotel ticked a box for the city, which needed more short-term accommodation around the airport.

Many flights from Asia and Australia arrived in the evening and travellers expected to be able to stay within walking distance of the terminal, he said.

The hotel would be between the terminal building and part of the existing long-term car park.

Airlines were regularly asking what hotels Christchurch was developing to fill the shortage after the earthquakes, he said.

The airport had been handling a raft of new arrivals from Singapore Airlines, China Airlines, China Southern Airlines, Qantas and Virgin.

The airport was on target to reach 6.3 million passengers for the full year - up from 5.9 million the year before - and tourism numbers were expected to keep rising next summer.

Still, the average time that visitors stayed in Christchurch was one night, compared to two nights before the earthquakes.

Johns said estimates from Christchurch and Canterbury Tourism suggested the city was short of 800 hotel rooms and airlines saw the lack of accommodation as a "big risk".

Airlines had asked for up to 400 additional rooms near the terminal but the airport company had decided 200 was enough for now, he said.

It had considered factors such as estimates for passenger growth, tourism and the likelihood of more hotels being built in the central city.

Passenger numbers would have to rise again sharply before the airport added those extra rooms or built another hotel on its property, Johns said.

The airport has also spent $10m on a 280-bed Jucy Snooze backpackers beside its Spitfire Square retail precinct.

It has developed several commercial and industrial precincts on its property and last year looked at the feasibility of a 300-room hotel at the airport. After doing market research and taking independent advice it decided to build a 200-room hotel.

Christchurch and Canterbury Tourism chief executive Vic Allen said the hotel would hopefully encourage other hotel developers to build down town. They would want to be sure of year-round trade before they started building there, he said.

"It should send a message that the airport is very confident of the tourism flows."

Airport spokeswoman Yvonne Densem said Novotel would lease the hotel for 10 years on one of its standard hotel management contracts. Christchurch Airport's $80m for the development would cover the cost of the land, services, buildings and fittings.

She said over the past two years the airport had worked to ensure Christchurch was capturing its share of the growing tourism industry.

About 800,000 airline seats a year had been added by airline serving the airport, a growth rate of about 10 per cent.

"We expect to see growth continue over the next few years and with it growing opportunity for the Christchurch tourism sector."

Novotel has more than 450 hotels in 61 countries and this would be its ninth in New Zealand. The chain is part of the AccorHotels group which has 3700 sites in more than 90 countries.

 - Stuff

TIM FULTON

Last updated 17:48, March 31 2016

Kiwis say Air New Zealand NZ's most reputable company

Air New Zealand has proven it is still a people pleaser by reclaiming the top spot as the nation's most reputable company.

Car manufacturer Toyota was ranked second in the 2016 NZ Corporate Reputation Index after topping the survey in 2015 and 2013.

It is the third year running both organisations have been in the top two places on the index which has been produced for the past six years by research consultancy AMR.

The survey measures how New Zealanders view the country's top 25 companies across seven reputation drivers: products, innovation, workplace, citizenship, governance, leadership and performance.

It then ranks them according to people's emotional reaction.

Sky TV came in the bottom of the heap falling two places to 25th.

The pay television company came under fire in recent months with customers threatening to cancel their subscription after it rolled out a decoder software upgrade with new interface design, which some users found difficult to read and lagging.

Air NZ has previously ranked third in 2013 and first in 2011 and 2012.

The public were particularly impressed with Air NZ's fare prices, new planes, financial results, positive service experiences and famous safety videos.

Air NZ has a 3.7 out of five star rating on Glassdoor - a website which allows employees to rate their employer.

The airline also frequently has passengers raving on social media about its high standard of customer service and quality product offering.

AMR managing director, Oliver Freedman said Air NZ and Toyota's reputation success came down to high quality and innovative products and services.

"This perception is not new; it has been built over many years through consistent delivery," Freedman said.

Both organisations were good examples of how a consistently strong customer experience, along with leadership and transparency could result in long-term reputation benefits, she said.

"Reputation is not something that is built overnight – it is years of effort and hard work."

Big box retailer The Warehouse also performed well moving up one place to third spot.

Vodafone was the most improved with its reputation ranking jumping from 20th in 2015 to 9th.

The telco's reputation took a dive between 2014 and 2015 due to a decline in perception among customers, particularly around customer service.

Dairy giant Fonterra's reputation declined from 17th in 2015 to 23rd this year largely due to ongoing issues with farmgate milk prices.

REPUTATION RANKINGS

1 Air NZ

2 Toyota

3 The Warehouse

4 Z Energy

5 New Zealand Post

6 ASB

7 Foodstuffs (owner of New World and Pak 'n Save and Four Square)

8 Zespri

9 Vodafone

10 BNZ

11 Fulton Hogan

12 Meridian Energy

13 Genesis Energy

14 ANZ

15 Progressive Enterprises (owner of Countdown)

16 Fletcher Building

17 Westpac

18 TrustPower

19 Spark

20 Contact Energy

21 BP New Zealand

22 IAG New Zealand (owner of State, AMI, Lumley and NZI)

23 Fonterra Co-operative

24 Exxon Mobil New Zealand

25 Sky TV

Sign up to receive our new evening newsletter Two Minutes of Stuff - the news, but different

 - Stuff

JOHN ANTHONY

Last updated 10:35, April 1 2016

Jetstar and Air New Zealand regional fare war slashes some prices by 40 per cent

Airfares to Nelson, Napier, New Plymouth and Palmerston North have fallen sharply since budget airline Jetstar started flying to regional centres in December.

But the fare cuts don't always live up to the dramatically low discounts New Zealanders were promised by Jetstar.

When Qantas-owned Jetstar announced it would expand its network to the regions using a fleet of five 50-seat Bombardier Q300 turbo-prop aircraft Qantas chief executive Alan Joyce said regional fares could be slashed by 40 per cent.

The move immediately triggered a price war between Jetstar and Air New Zealand, which had previously enjoyed a monopoly on most regional routes.

Both airlines started selling thousands of tickets to the regions for as low as $9.

Nearly four months later one-way regional fares have settled to start at $29 on Jetstar and $45 with Air NZ.

House of Travel commercial director Brent Thomas said competition from Jetstar had driven prices down, but they were not 40 per cent cheaper across the board.

During high demand travel periods - such as peak business hours in the morning and afternoon - regional airfares had not become much cheaper, he said.

But there were pockets of travel times where airfares had become at least 40 per cent cheaper, he said.

"There has definitely been a downward shift in pricing."

Aviation commentator Irene King said travellers wanting the cheapest airfares should consider flying one airline one-way and return on the other.

"Consumers just need to be savvy and shop around," King said.

There was a perception that Air NZ's airfares were more expensive than Jetstar's but that was not always the case.

"Largely that's right but it's not always true."

King said Tuesday and Wednesday were the best days of the week to book for travellers wanting to snap up a deal.

"For some reason people don't like to travel on a Tuesday or Wednesday. Bookings are always much much lighter at that time of the week."

Booking travel for mid morning and early afternoon, six to eight weeks in advance, would usually get the best pricing, she said.

Airfares to the regions booked six weeks in advance and at non-peak times show Jetstar to be between $20 and $30 cheaper than Air NZ.

Many customers would be happy to pay extra for full service on Air NZ.

Jetstar customers frequently come up against hurdles such as online and kiosk check-in systems not working and flights being cancelled.

In March Jetstar cancelled 10 out of 100 regional flights between Friday and Sunday due to two separate cases of pilot illness.

Tickets booked a week in advance for travel during peak business hours on Air NZ could be hundreds of dollars more expensive.

A 6.45am Air NZ flight from Auckland to Palmerston North costs $239 while on Jetstar the same flight at 8.25am costs $69.

An early morning Air NZ flight from Auckland to Napier costs $169 compared to Jetstar charging just $45.

 - Stuff

JOHN ANTHONY

Last updated 12:00, March 29 2016