Kiwi Regional Airlines has slashed its its Dunedin to Queenstown service on its first day of commercial operation due to a lack of passenger demand. Hamilton-based Kiwi will also fly between Hamilton, Nelson and Dunedin. The airline's first flight arrived in Queenstown from Dunedin on Tuesday morning in the company's twin turbo-prop, twin pilot SAAB 340A, which seats 34. There were 25 passengers on board. Kiwi Regional Airlines had offered them a $89 return fare if they travelled for the day, or one-way flights from $79 up. Chief executive Ewan Wilson said he was disappointed with passenger demand on the route. "I take responsibility for putting a bit too much capacity on." He said the airline had planned twice-daily flights on the Queenstown-Dunedin route on Mondays, Wednesdays and Fridays but the market had not responded as expected. Instead, it cut the service back to an early Monday morning return flight and another on Friday afternoon. "That does mean we are available for charters on Tuesday and Thursdays. Our core schedule is Dunedin to Nelson and Nelson to Hamilton, Monday, Wednesday and Friday, Saturday and Sunday," he said. Kiwi would see how the market grew and resume those services if it was justified, he said. "It's about right-sizing the offering and hoping the market grows." The flight was scheduled to depart at 7.15am but did not leave until 8.10am because of low cloud. It was welcomed with a full water curtain salute at Queenstown Airport. Wilson said the airline's Kiwi's focus was on flying between regions and was not trying to take on Air New Zealand or Jetstar. New Zealanders liked the idea of strong competition, he said. "Now it's up to New Zealand to support the new innovator." Those at the airport to mark the arrival of the aircraft included MP for Clutha Southland Todd Barclay as well as Queenstown Chamber of Commerce and Destination Queenstown members and airport staff. Barclay said the "faster and most convenient" 40 minute flight was a breeze compared to the 3.5 hour drive between the two towns. He said the Government hoped the new regional flights would boost the level of tourism and business in the regions. "The added competition is great for consumers and great news for local economies," he said. The company was awarded its air operating certificate on Thursday, allowing it to fly commercially just days before the first flight. The airline became the first in over a decade to be issued such an approval by the Civil Aviation Authority. About 60 staff have been hired and it was hoped that number would double once the company expanded. Wilson said last week he was "very unhappy" it had been allocated Gate 1 at Queenstown Airport. "We have some real issues with Queenstown Airport's logistics." They were acting "bullish" and "don't seem hungry for new clients", he said. However, Airport Corporation operations general manager Mike Clay said Gate 1 was assigned to the airline as it was "specifically designed for Turboprop aircraft". Clay said it was disappointing to hear Wilson's comments. The airline would be keeping an eye on demand for flights and looking for further opportunities. Airline operations general manager Bill Wilson said: "if the community says we don't have a need for some of the routes, we will take that on board."
I can't say I'm surprised, but what a PR disaster... announcing it on the first day of services! Even back as far March I felt Queenstown-Dunedin was a lean route... http://3rdlevelnz.blogspot.co.nz/2015/03/some-thoughts-on-new-air-services-part-2.html
So where would I fly? Links through Nelson direct to Dunedin and Hamilton might work but I doubt there will be big numbers. Nelson to Tauranga, Napier and New Plymouth might also work... but to fill a Saab? Again, its all about the fares.
I still think a Masterton-Auckland would work if you get the fares right. Locals have to be lured away from Air NZ or Jetstar at Palmerston and Wellington.
When the Beech 1900s go there is one Q300 Hamilton-Palmerston North at 6.15am! and return at 7.50pm! Dreadful times in my opinion. So an early Palmerston North-Hamilton would work with the Saab then going to Nelson and Dunedin and back enabling an early evening Hamilton-Palmerston North.
Another route with possibilities is Hokitika-Wellington when the Beech 1900s go. No early morning service out of the Coast... A lot of people drive to Chch to catch Jetstar or Air NZ to Wellington. Hence Air West Coast always did well with not too much impact on the early flight out of Hokitika.
All in all however there is not a lot of room to move... I think Ewan is right in not trying to take on Air NZ but ultimately he is going to need to on some routes because there are just not the routes in NZ for a Saab that Air NZ are not already flying.
I think MRO - AKL - TUO - AKL then return at night could work with a Saab. It takes about 2 hours to drive to Palmerston North or Wellington from Masterton aND with the fixed costs divided by 34 people, it could be cheaper than Air NZ ever was and attract more people. The Auckland to Taupo route with Air NZ is also a good opportunity because they can offer lower fixed prices instead of one's that get up to $400. Also they're not filling the 19 seat beechcraft service as it is so when Air Nelson takes over sure they'll have lower prices but that won't attract a lot more people. Taupo would be more suited to the 34 seat option than 50 and would surely last longer.
ReplyDeleteI completely disagree. Especially in regards to TUO. Ewan Wilson has consistently said of KRA that they will not take on Air New Zealand. The Q300 is not too big for TUO. And, sorry, but they are filling 1900Ds, so much so that Eagle have been operating extra flights out of Taupo, up to 4/5 on Fridays. Air Nelson will operate two flights per day and that will do Taupo plenty. KRA do not offer fixed fares from memory.
DeleteMRO could be a contender, but, they will have to get the fares right or it wont be a flyer.
I struggle to see how KRA are going to make a buck out of a Saab sitting around, only operating a few flights between DUD-NSN-HLZ a week. Its a waiting game, but it really gives the airline a poor name pulling its ZQN services on the very first day! Pretty poor Kiwi Regional.
I'm sorry but I don't know what statistics you're looking at. I'm frequently in Taupo and I was at the airport the other day. There's never been more than 3 flights per weekday and 2 on weekends. Whenever I look at bookings a day in advance therrs still at least 1/3 of a plane to fill with prices skyrocketing. Plus sometime they're doing to need to compete with Air NZ otherwise they're going to run out of routes and won't be able to expand. And 2 flights per day is not practical especially for leisure travelers as it is a tourist destination.
DeleteThese statistics really can't lie all that much, they come from the horses mouth so to speak. In the past TUO only saw two Beechs a day to Auckland. Your saying that two Q300s won't work because it's not practical?? With the demise of direct WLG flights, more people will be transiting through AKL for onwards flights to say BHE, NSN, CHC, ZQN, DUD, IVC ect... What the airline has done has effectively thirded TUOs movements, and are expecting people to utilize the two services on offer, and people will. Hmmmm..... A quick search shows on Fridays a 0650, 1055, 1615 and 1710 departures out of AKL to TUO. And this has been frequent in the past, and found forth until the complete Q300 upgauge. Also, Taupo has received regular Q300s on Sundays for some time now, and they have been ticking away nicely, bar a few flights, just like every other airport. If Air NZ did not think Taupo would sustain a Q300 they would have chopped it just like WHK. I do not applaud all the companies decisions, but with Taupo I think they have done alright. Have no idea where Sounds Air fit in. People will not want to fly Sounds Air to Wellington, and then book another flight to fly to say CHC or DUD when they can just fly Air NZ all the way via Auckland
DeleteAlso... the Air New Zealand website does not allow you to see if there is '1/3 of the plane to fill'. You could be seeing $199 fares and there are only a handful of seats left, or you could be paying $250 and there is indeed half the plane left. I have always thought bums on seats would be better than price gauging on the last seats....
DeleteTo the last comment, prices are set by supply and demand. Its all about yield management across your frequency and times of day.
DeleteIf the supply has severely outweighed demand, despite schedule planning having already incorporated, historic demand trends and forecasts, if there is sufficient time to market and sell discounted seats they will try this, but this sale must not effect the yields of flights around this particular ill selling flight.
Some times in order to recover enough revenue to operate the service at break even, despite lower loadings, the prices may increase and the flight will eventually operate say half capacity.
Also, just because a flight is full, doesn't mean its particularly profitable, its all to do with yield management.
Cargo also plays a growing role in the profitability of air services. The passenger cabin may be half full, but the hold could be full to the roof with time sensitive freight.
TUO regularly saw 3 flights ( not every day of the week but most ) a day to AKL alongside the WLG services prior to the schedule adjustment earlier in the year. Following that adjustment, the flights were reduced to 2 a day to AKL and a complete cut of WLG. Essentially replicating the future Q300 schedule with a B190. After realising the capacity shortfall afterwards, a third flight was added on some days, prior to full Q300 introduction next year.
DeleteIn regards to the last posts comments regarding cargo's 'growing role', its been a huge component of revenue stream of decades and decades! What it is not however is a major contributor on regional flights as it is international, and never will be, TUO is hardly a huge import / export market...
4 on Fridays as of late, and going forth until Q300 take over. Q300 services on Sunday only at the moment
Deletenobody ever said it was a major contributing factor to regional flights. That's your own words.
DeleteThe Chatham islands, Nelson, invercargill and others carry large quantities of time sensitive freights and this amount is growing.
Just because the passenger cabins are not always full, the holds often are. This is fact, often reflected in the trim with the placement of the passengers giving those not in the industry a visual idea. A low pax loaded Q300 with low cargo loading will have majority of pax sitting in the last rows, low pax load but full cargo hold will see the passengers seated further forward.
Very wise move by KRA. NSN-ZQN-NSN somewhere in the mix for the future perhaps. Also this frees up the sole aircraft for more flexibility.
ReplyDeleteThey should run DUD-ZQN-NSN-HLZ return routing then they can fill the Saab with through PAX and not run DUD-ZQN return sectors alone.
DeleteHow about Rotorua? I've thought a tourist route ROT-NSN-ZQN could work.
ReplyDeleteThe SAAB is a dog in high elevation and high temperatures. Air Nelson was always off loading pax ex Napier when the temperature started to get above 28 degrees. Add in 1000 foot airport elevation and a MSA in the tens of thousand and the payload will be almost halved, if not quartered.
DeleteThe SAAB does to operate well in icing conditions and has large performance penalties when anti ice is required.
All in all, turbo props are a liability n ZQN.
Convair climbs out if ZQN no problem.
DeleteHow many Convairs have you seen climb out on one engine?
DeleteTP have OK performance if two are running but they have to be able to climb out one engine in-op.
The Saab 340'A' has rubbish performance. The 'B' is much better, but granted KRA are flying an 'A'. Every turbro prop has to be able to climb out OEI! Its a requirement for certification! The likes of the Q400, Saab2000 and even the 1900D have outstanding performance.
Delete