Rob Fyfe reassures on London ops

Posted by travel memo on 27 January 2012 | 0 Comments

Tags: Air New Zealand, Rob Fyfe, NZ-London route

In his latest message to Air New Zealand staff, CEO Rob Fyfe has responded to mounting concerns about the airline’s commitment to maintaining the NZ-London route. He says: “It’s no secret that we are struggling to make London profitable, just as our competitors are also struggling in this task, not just on London but on most ultra-long haul routes. Passenger numbers are flat at best and, when put against the backdrop of economic turmoil in Europe, any pick up in demand for long haul air travel from London looks unlikely in the foreseeable future.

“We are certainly not alone in having to adapt and adjust our business to changes in demand and economic conditions. Prior to Christmas we saw Qantas consolidate routes and reduce its capacity through to Europe (Frankfurt is the only remaining European port that Qantas still flies to in addition to London Heathrow) and this week we’ve seen Air Asia X announce that it is withdrawing all services to Europe (throwing the travel plans of many Kiwis into disarray) citing fuel costs, the weak European economy and European Union emission charges.

“The likely impact for our London routes is that for the immediate future we will need to adopt a seasonally adjusted schedule that seeks to better match our available capacity to weak passenger demand. This is not a new strategy – we have been doing this on our Hong Kong route for some time now – this week we went back to five London - Hong Kong services a week from a daily schedule over the Christmas period. 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, but it will mean adjusting our frequency to match demand where appropriate, which is exactly the approach we adopt in response to any changes to demand in any of our domestic or international markets.

“London still remains an important source market for us; the UK is the second largest source of inbound visitors to New Zealand after Australia. As a signal of our commitment to make London operations more profitable we have been restructuring our sales and marketing team in Europe to ensure we can maximise the revenue opportunities in this tough environment.” Fyfe says the airline has appointed two very strong European Managers to run its aligned Market Development Streams, and will spend time in London in March as this new team get up to speed.