Qantas Group executive government and international affairs Andrew Parker, speaking at the CAPA Australia Pacific Aviation Summit, said (07-Aug-2013) the Australian Competition & Consumer Commission (ACCC) and New Zealand Government conditions imposed upon the Qantas-Emirates tie-up were "more than we would have liked" but that consumers will see real benefits to the alliance. Mr Parker added the trans-Tasman market is indeed a duopoly between Qantas-Emirates and Virgin Australia-Air New Zealand alliance, but that it is a "unique" and "hyper-competitive" market.
Qantas: Government conditions on Emirates tie-up 'more than we would have liked'
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Air New Zealand to sell Virgin Australia stake to fund expansion: Chengdu could be next after Manila
Air New Zealand has been on a long haul growth streak, opening five destinations since 2015. Manila was most recently announced and Chengdu could be next, once again giving Air NZ two destinations in mainland China after exiting Beijing. Chengdu as a destination – or another city – would mean that Air New Zealand would serve more points in Asia than Qantas.
Globally, Air NZ is catching up to Qantas for destinations outside Australia/New Zealand/Pacific Islands. In 2006 Qantas served 21 points outside the region and in 2016 serves 18, although this is an increase from the situations in recent years. Where Qantas has cut, Air New Zealand has grown, increasing from 10 long haul destinations in 2006 to 16 (if Chengdu is included) in 2016. With Air New Zealand due to receive nine 787-9s through 2019, with only some of those due to replace existing aircraft, the airline could serve more points than Qantas. A sale of Air NZ's stake in Virgin Australia could pay the cost of three widebody aircraft and possibly accelerate Air NZ's growth even more. Qantas will remain bigger for number of flights and seats. Qantas offers upwards of five daily flights to Singapore whereas Air NZ offers just one.
South Pacific aviation markets will be defined by China’s expansion
The nature of the South Pacific's geography makes finding the right partners for its airlines essential for their survival in international long haul markets – as most are.
The region is characterised by relatively liberal access regimes and by partnerships of varying levels – in New Zealand especially, where Air New Zealand’s international network is dominated by JVs. Virgin Australia has built a ‘virtual alliance’ alongside HNA, Singapore Airlines, Etihad and Delta, with very little of its own metal flying outside Australia. At Qantas Group, international performance has improved markedly following its Emirates partnership, as its operating focus has shifted from Europe toward Asia and North America, with local JVs, and close partnerships with American Airlines and China Eastern continuing to grow and mature.
For all airlines in the region, the China market will define much of the growth over the coming decade. (This report is taken from the Jul/Aug-2016 issue of CAPA's Airline Leader)