CAPA: 80% recovery in domestic New Zealand airline capacity by end-2020


New Zealand - the world's 30th largest domestic aviation market globally before the COVID-19 crisis - is expected to recover to just under 80% of its prior capacity levels by the end of 2020, according to a new CAPA projection.

Domestic seat numbers are expected to reach close to 40% of 2019 levels this month as national restrictions are eased (under Alert Level 1), and then to rise gradually to approximately 60% of 2019 levels by early October.

The projection is contained in CAPA's New Zealand Air Capacity Model, which provides a breakdown of each nation's domestic and international outlook for seat capacity powered by OAG - as well as each city and route pair - based on the 2019 actuals.

Combined with government statements, airline network announcements and capacity projections, the model provides a robust and granular guide for future air capacity projection. Using assumptions around 6 key phases - Zero/Grounded, Skeleton, Acutely Restricted, Basic, Restrained and Standard - users can track the pace of recovery in their relevant market.

  • New Zealand's domestic aviation market is projected to recover to nearly 80% of pre-COVID capacity levels by the end of 2020.
  • Domestic seat numbers are expected to reach close to 40% of 2019 levels in June, gradually rising to approximately 60% by early October.
  • CAPA's New Zealand Air Capacity Model provides a breakdown of domestic and international seat capacity projections based on 2019 actuals.
  • The model takes into account government statements, airline network announcements, and capacity projections to provide a comprehensive guide for air capacity projection.
  • The potential trans-Tasman 'bubble' with New Zealand has been factored into the model from August 2020, influencing international capacity growth projections.
  • Air New Zealand's international operations will be a focus for recovery, but the timing and rebuilding of international capabilities remain uncertain.

CAPA's New Zealand Air Capacity Model projections: domestic and international seats, 2020

CAPA Chairman Emeritus, Peter Harbison, said:

"Air New Zealand enjoys an envied position amongst world airlines - a domestic market free from COVID-19 transmission. New Zealand took bold action to lock down and has defeated the first wave spread of the virus, paving the way for a more rapid recovery in domestic airline capacity in the initial phase. As demand rebuilds, domestic seat capacity and route networks will be adjusted to optimise yields. In the absence of most international tourist markets feeding into the domestic network, however, we expect only a steady domestic aviation recovery".

"The potential trans-Tasman 'bubble' with New Zealand has been factored into the CAPA Model from Aug-2020, with some Pacific Island linkages also added. These "bubble" effects may influence international capacity growth projections, and most trans-Tasman arrivals from Australia, if-and-when they are permitted, are expected to be mostly point-to-point. The initial CAPA model sees the hard-hit international air capacity (seat numbers) still down by 87% in Dec-2020."

Mr Harbison continued: "International operations have formed a larger proportion of Air New Zealand's operations than its Australian counterpart, Qantas, so reviving international will be a goal. The big question is when, if, how and with whom Air New Zealand might resume international flights outside the Pacific bubble - not simply on the basis of when - and with whom - the borders open, but also in terms of rebuilding international capabilities. That's a broader structural and investment issue, as much as a demand issue".

About CAPA's 'Air Capacity Model'

CAPA's new 'Air Capacity Model' has been developed to provide the aviation and travel industry with a robust guide to future air capacity possibilities anchored in:

  • Baselines based on aircraft configuration data in the CAPA Fleet database and powered by OAG schedules;
  • Decisions and announcements by the New Zealand government on travel restrictions and border announcements;
  • Assessments by CAPA, based on real time reports from CAPA's unique daily news system, which collects over 300 stories every day:
    • Airline statements, route plans and pricing;
    • The public's willingness and propensity to fly;
    • The introduction of standard criteria on sanitary conditions onboard aircraft and at airports;
    • 'Right-sizing' of aircraft to match demand.
  • The airline capacity projections are updated in real time, as major new events occur (made possible using CAPA's unique daily news gathering capability).

The CAPA 'Air Capacity Model' is available by 12-month subscription, providing a monthly excel file* with Input (assumptions) and Output tabs.

The Output tab offers a total market graphic, as well as airport and route data summary tables.

Live demonstrations of the new model are available on request by completing your details here or contacting membership@centreforaviation.com