Auckland International Airport

Qantas-Emirates alliance: the last piece of the puzzle falls in place across the Tasman

The final piece of the Qantas-Emirates alliance has fallen into place with the New Zealand minister of transport Gerry Brownlee giving his belated approval for the two carriers to extend their union across the Tasman by authorising a master coordination agreement. This will to all intents and purposes turn the Tasman market between Australia and New Zealand into a duopoly between the Qantas-Emirates Group and Air New Zealand-Virgin Australia partnership.

The Australian Competition and Consumer Commission (ACCC) had already granted Qantas and Emirates conditional approval for the trans-Tasman leg when it gave the final green light for the pair’s broader global alliance in Mar-2013. Mr Brownlee, who under New Zealand law has the authority to rule on arrangements between two airlines where this involves price or capacity fixing of international air services, had originally been expected to make his decision by the end of Mar-2013.

Hawaiian Airlines endures short-term pain to secure, it hopes, successful longevity

Hawaiian Airlines faces a challenging time during 1H2013 as its efforts to diversify outside of the Hawaii-US west coast market during the last few years need more time to bear fruit. Its ambitious long-haul expansion is accompanied by the introduction of a new inter-island subsidiary and the reworking of other portions of its inter-island network.

All of the changes Hawaiian is undertaking or planning to introduce are intended to bolster efforts to preserve its profitability, which has been fairly consistent during the last few years. But in the near future the carrier is facing pressure as its new long-haul Asian markets spool up and increases in competitive capacity create pressure in its trans-Pacific service to the continental US.

While the strategy Hawaiian is adopting to persevere in the long-term is solid, the airline might be attempting to accomplish too much too fast, which in the shorter-term is creating pressure on yields and unit revenues.

Air New Zealand-Cathay Pacific partnership has implications across Asia and for SIA & China Southern

Air New Zealand's securing of a rare partnership from highly independent Cathay Pacific touches on much more than the niche Hong Kong-New Zealand market. There are far broader implications for networks and global alliances.

Asian carriers have usually taken a quite distinctive approach to global alliance participation and operation than their European peers. Indeed, Cathay and Singapore Airlines (SIA) take some of the largest hands-off approaches to alliances and, when it comes to partnering, can be deeply conservative. While this may have worked in the slow days of last decade, there is new competition and, as the Gulf carriers disturb the old equilibrium, it can be a scary world for long-haul carriers to confront alone.

Singapore Airlines is signalling a shift with baby steps for alliances, while the outlook at Cathay remains essentially solitary. This deal was heavy on influence from ANZ, which had struggled to serve the Chinese market effectively while also contending with a rising China Southern as a formidable force, a carrier competing with Cathay as well. And ANZ previously received little love from Star partner SIA, also a staunch Cathay competitor.

The outcome is a very tidy deal for Cathay and ANZ, but one that will undoubtedly spark ramifications – and see the emergence of Hong Kong Airlines as a viable partner.

Rob Fyfe bows out of Air New Zealand with projection for profits to double in 2013

Outgoing CEO Rob Fyfe punctuated his final delivery of annual results for Air New Zealand (ANZ) with a surprising and bullish call for underlying profits in FY2013 to double from FY2012's NZD91 million (USD73 million). It is a possible financial achievement as much as it is a testament to Mr Fyfe's legacy of completely turning around ANZ financially, operationally and culturally. Mr Fyfe attributed the projected higher profits to ANZ's agility to quickly implement business improvements because it has the backing of its employees.

It is a diametric comparison to ANZ's competitor across the Tasman, Qantas, which a week prior posted its first loss in nearly 20 years as it struggles to turnaround its business as it combats an alienated workforce. The mood was far more sour at ANZ when Mr Fyfe joined, but through diplomacy, frontline exposure and the occasional splattering of body paint, Mr Fyfe has created an all-around successful airline. It is a rare achievement.

Hawaiian Airlines tops off rapid expansion with plans for a new inter-island subsidiary

Fast-growing Hawaiian Airlines has broadened its significant expansion to include the establishment of a new inter-island subsidiary to operate smaller turboprop aircraft to destinations not viable for its current inter-island workhorse the Boeing 717. The recently unveiled plans occur as Hawaiian is working to reverse negative revenue performance it experienced in its inter-island network during 1Q2012 after it launched a new hub in Maui.

As Hawaiian is crafting its new regional strategy its likely rival in some of the smaller markets Island Air is planning to upgauge its fleet to higher-capacity ATR aircraft, which could create unsustainable levels of capacity on the smaller inter-island routes. All this shuffling is against a backdrop of Hawaiian’s aggressive push into long-haul markets from its Honolulu hub into Asia, joined by new expansion into Australia and New Zealand.

New Air New Zealand CEO Christopher Luxon values alliances as airline eyes Asia and US growth

Christopher Luxon, who next year will take over as Air New Zealand CEO from Rob Fyfe, sees growth opportunities in the carrier's flagship long-haul division. A critical component of that growth will be alliances and partnerships, which in the past three years have taken on greater prominence in ANZ. Short-term growth prospects are in North America, with Air New Zealand evaluating service to destinations like Denver and Houston, hubs for Star Alliance partner United. Medium- and long-term growth opportunities are in Asia Pacific, where partnerships will be even more critical to help ANZ's disadvantaged position of a higher cost base and end-of-line positioning.

Mr Luxon's appointment, effective 01-Jan-2013, fulfils Mr Fyfe's objective to have an internal candidate succeed him, but with Mr Luxon having been with ANZ for a mere 13 months, he also brings critical outside experience. He has been the general manager of ANZ's international division and previously worked for Unilever in Asia, Australia and North America. At 42 years old, he continues the region's theme of young CEOs: Qantas' Alan Joyce is 46 and Mr Fyfe was appointed CEO when he was 44.