Air New Zealand ramping up capacity as travel demand recovers

AIR New Zealand expects to reach 75 per cent of its pre-Covid-19 international capacity and more than 100 per cent of pre-pandemic domestic capacity by the end of 2022, as travel demand recovers, its chief executive officer Greg Foran said on Monday (Jun 20).

The New Zealand national carrier is operating at 50 per cent of international and nearly 100 per cent of pre-pandemic domestic capacity, Foran told Reuters on the sidelines of an airline industry gathering in Doha.

“At this stage, there’s some pent-up demand that we’ve seen. People wanting to not just visit friends and relatives, but increasingly business people want to get out and be connected. So I’m very encouraged by that,” he said.

“But I am cautious about what may happen should the price of fuel continue to stay over double what it was pre-Covid.”

Air New Zealand is managing to cover increased fuel costs through fares that are averaging around 20 to 25 per cent higher than pre-pandemic levels, Foran said, though that could change if fuel prices rise again.

Australian rival Qantas Airways said on Sunday that it might need to reduce domestic capacity further to help recover rising fuel costs, but Foran said there were not yet any plans to do that at Air New Zealand.

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Earlier this month, Air New Zealand said its loss in the 12 months ending Jun 30 would be narrower than previously forecast due to a rebound in passenger demand as restrictions eased.

Foran said it was too early to say whether the airline would return to a profit in the financial year starting Jul 1.

“We’re not putting out any guidance at this point,” he said. REUTERS