The airline must remain focused on markets with the greatest opportunity for long-term profitable growth
"Air New Zealand is strongest when operating direct flights to and from our home base"
Visitor growth to New Zealand is strongest from North America
Air New Zealand is accelerating its ambitions for North America and will launch a non-stop service between Auckland and New York using its 787-9 Dreamliner in October 2020.
To direct capacity to faster-growing markets, the airline has also made the difficult decision to withdraw from its daily Los Angeles-London service from October 2020.
Air New Zealand Acting Chief Executive Officer Jeff McDowall says while it's hard to farewell such an iconic route, the airline must remain focused on markets with the greatest opportunity for long-term profitable growth.
"Air New Zealand is strongest when operating direct flights to and from our home base and this reset will put us in the best possible position to take advantage of increasing demand across the Pacific Rim.
"Visitor growth to New Zealand is strongest from North America and performance of our new service to Chicago is exceeding expectations. New York has been an aspiration for Air New Zealand for some time and withdrawal from the Atlantic will free up aircraft capacity to make this milestone a reality," says Mr McDowall.
Air New Zealand will fly between Auckland and its alliance partner United Airlines' New York hub Newark Liberty International Airport three times weekly, year-round, using its latest configuration Boeing 787-9 aircraft.
Tickets for Air New Zealand's New York service will go on sale soon, subject to regulatory approvals and landing slot confirmation.
Los Angeles-London has been a flagship route for Air New Zealand and an important link connecting New Zealand and Europe since its launch in 1982, however Mr McDowall says market dynamics have affected performance in recent years.
"Today Kiwis have more than twice the number of ways to fly to London than a decade ago and preferences have changed. Less than seven percent of all airline travellers between Auckland and London chose to fly via Los Angeles last year.
"At the same time, the Atlantic has become one of the most hotly contested routes in the world and Air New Zealand lacks the home market advantages and scale of the North American and European airlines we're up against."
Mr McDowall says the hardest aspect of the decision is the impact on Air New Zealand's people who've worked incredibly hard to build the route and to achieve the highest customer satisfaction levels across the airline's international network.
"Sadly, the withdrawal will see the disestablishment of our London cabin crew base of around 130 people and, subject to consultation, around 25 roles in our Hammersmith sales office and ground team. We will be working with our people and their union to help with the next steps in their career, including looking at opportunities in other areas of the airline."
Los Angeles-London will operate as scheduled until October 2020 and no tickets have been sold beyond this date. Air New Zealand has chosen to announce the withdrawal more than a year in advance to allow time to support its people and to avoid any impact to customers booked to travel.
Europe, including the UK, remains a significant sales region for Air New Zealand. Currently more than two thirds of revenue generated by its London team is unrelated to the Atlantic route and the airline will retain a sales, marketing and cargo presence in London to serve this important market, including after the cessation of its Los Angeles-London service.
"We fully expect customers will want to take advantage of the many connection options on our partner networks through Air New Zealand's gateways in Asia and the Americas, including New York. It's important to us that customers continue to enjoy a seamless journey, and we'll be working closely with our partners to ensure the best experience and benefits for travellers," says Mr McDowall. ■