Trans-Tasman aviation impacted by Coronavirus COVID-19

Premium Analysis

Although the trans Tasman market between Australia and New Zealand is far removed from the epicentre of the COVID-19 coronavirus outbreak, it has still been significantly affected by the airline industry's latest crisis. Air New Zealand, the Qantas group and Virgin Australia have all announced capacity cuts to match demand weakness on Tasman routes.

However, the reductions are also reflective of the fact that excess capacity has been hurting financial returns on these routes.

A major shift in alliances in late 2018 prompted something of a capacity war, as the airlines added flights across the Tasman and competed aggressively on prices. The latest readjustments may signal a rationalisation of this market by the main players, although the true test will be how they react when the coronavirus emergency eases.

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