Singapore Airlines Deal Boosts Air New Zealand Markets

By Adrian Schofield
Source: Aviation Week & Space Technology

SIA will replace Boeing 777-300ERs with Airbus A380 service on the Auckland route, on a seasonal basis initially. This will make it the second carrier—after Emirates—to fly A380 routes to New Zealand. Combined, the Singapore-Auckland changes will increase capacity on this route by up to 30%.

From the SIA perspective, the alliance will allow it to further strengthen its presence in the Australasian market, which is among its most important. An SIA spokesman dismisses suggestions that Air New Zealand has most to gain from the deal. Together, the two airlines will have more frequencies between Singapore and New Zealand than either carrier could operate individually, he says. “Each of us is able to expand our network and there will be [extra] feed into both carriers' flights.”

While SIA does not reveal market-specific statistics, the revenue-sharing arrangement is not in response to any performance issues on the Auckland route, says the spokesman.

Singapore has been served by Air New Zealand previously, but the carrier pulled out in 2006 because it was losing too much money on the route. The deal with SIA ensures that leg will now be more viable, Luxon says. For example, the two airlines will be jointly marketing the service from both ends.

Air New Zealand will deploy Boeing 777-200ERs on the Singapore route. The aircraft will become available due to the three Boeing 787-9s the airline is scheduled to take delivery of in the second half of this year.

The Auckland-Singapore route is also served by Qantas subsidiary Jetstar Airways, using Airbus A330-200s. The addition of more capacity will not cause it to alter its plans, a Jetstar spokesman says. “Jetstar is the only dedicated [low-cost carrier] on the route and it is business as usual for us.”

Apart from Southeast Asia, the SIA arrangement also will give Air New Zealand improved access to Europe, India and South Africa.

The code-share services to Europe will not dent demand for Air New Zealand's existing flight to London via Los Angeles, says Luxon. Rather, the carrier will now be able to offer connecting flights via Singapore to European markets that are not on its network, such as Italy. This allows the airline to broaden its offering without using its own aircraft, as it does not want to add more ultra long-haul one-stop flights.

Although Air New Zealand code-shares with several airlines, SIA and existing partner Virgin Australia will be its “cornerstone” alliances, says Luxon.

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