Air New Zealand keeps London run

[Jarden S]

Air New Zealand has ruled out abandoning the London route and plans to start flying to new destinations this year.

Chief executive Rob Fyfe said in a note to staff that the airline would adopt a more seasonal approach to the loss-making London route in the face of weak demand.

"Passenger numbers are flat at best and, when put against the backdrop of economic turmoil in Europe, any pickup in demand for long-haul air travel from London looks unlikely in the foreseeable future."

The United States economy was also expected to suffer from slower global growth.

Qantas said at the end of last year that it would reduce capacity to Europe and budget carrier AirAsiaX, which flies to Christchurch, has scrapped all European services, blaming economic conditions, high taxes and rising fuel costs.

Fyfe told analysts last year that no stone would be left unturned as part of a comprehensive review of its long-haul business, which was losing $1 million a week, including the possibility of pulling the koru out of London.

However, with the review nearing completion, Fyfe has ruled out axing the flagship route. Instead, Air NZ would respond by better matching capacity to reduced passenger demand on the London service via Hong Kong and Los Angeles, he said.

This week onward flights to London via Hong Kong had been cut from daily over the peak Christmas period to five times a week. "It doesn't mean we're pulling out of London, and we have no current intention of withdrawing our presence from any market we serve."

London remained an important market, with Britain being the second-largest source of inbound visitors to New Zealand after Australia, Fyfe said.

Reduced services on some routes would free up planes to add capacity on other parts of the network or open new destinations. "You can expect to see some new routes announced during the year."

The airline has previously set its sights on further expansion to Asia and potentially South America.

A review of costs across the business had also resulted in savings of "tens of millions of dollars per year" since July last year, including a reduction in staff numbers of nearly 200 through natural attrition.

More than 100 other head office jobs were expected to be lost as part of a company-wide corporate overhead review

http://www.stuff.co.nz/travel/630800...eps-London-run

So glad they are keeping their flagship route to LHR.
Any one wish to speculate what routes/destinations they will start up.
DEL or BOM in India
GRU in Brazil via EZE or SCL
New point in China still have unused rights to that country.
CBR, MCY or NTL here in Australia