Air New Zealand’s yields pick up in Dec-2009, but remain in negative territory
Air New Zealand handled 2.6% fewer passengers in Dec-2009, as the carrier slashed capacity (ASKs) by 11.0% and demand (measured by RPKs) fell 5.6%, increasing Group load factors by a notable 4.8 ppts. Group yields last month fell 5.2% year-on-year (the smallest fall since Jun-2009), compared to a financial year-to-date (six months to Dec-2009) reduction of 9.7%, indicating some improvements are being seen by the carrier.
Air New Zealand yield growth (% change year-on-year): Jul-2008 to Dec-2009
Source: Centre for Asia Pacific Aviation & company reports
Short-haul yields are continuing to recover from their Jul-2009 floor to be down 3.2% year-on-year last month (and for the smallest year-on-year reduction since Mar-2009), reflecting significant changes in the airline's operations in the segment.
Domestic capacity was reduced by 5.4% last month, while Tasman/Pacific capacity was slashed by 12.9% primarily through downsizing to smaller aircraft, reduced frequencies on some sectors and the withdrawal of trans-Tasman flights from Hamilton and Dunedin. This resulted in the load factor increasing by 6.6 ppts to 81.6%.
Air NZ's international yields are also showing signs of improvements, falling 7.5% year-on-year in Dec-2009. This compares to a 12.5% reduction in the six months to Dec-2009, and comes off a strong base in Dec-2008, with an 18.3% year-on-year long haul yield increase.
Long haul passenger numbers were down 6.4% in the month, with capacity on the Asia/Japan/UK routes reduced by 14.8%, as demand fell 13.8%, resulting in load factors increasing by 0.9 ppts to 85.4%. On North America / UK routes, demand decreased by 1.9% as capacity was reduced by 8.6%, resulting in a 6.1 ppt load factor improvement to 89.8%.
See related article: Couches, cougars and contraction: Air New Zealand downsizes to survive in the jungle