09 December 2015

On Kiwi's Dunedin-Nelson service

This from the Otago Daily Times... Most is from the previous press release. The last few sentences about the Dunedin-Nelson service are interesting...

Kiwi Regional Airlines (KRA) has added another flight to its Dunedin to Nelson service, and a new North Island destination to its schedule. The airline yesterday announced Tauranga as that destination, meaning a twice-weekly connection between Dunedin and the Bay of Plenty. Chief executive Ewan Wilson said the airline was still working to build its routes, but the performance of the Dunedin to Nelson service was ''very encouraging'' for its sustainability. KRA launched in late October with a Dunedin to Queenstown route, but that was cut back immediately to once a week, and shortly after ditched. Yesterday, Mr Wilson said four flights a week to Nelson from Dunedin would become five. From February 15, KRA would fly on a Tuesday and Saturday morning in a ''same plane'' service to Tauranga, via Nelson. The aircraft would be on the ground for 25 minutes in Nelson, making a total flight time of just over three hours. Tickets from Dunedin to Tauranga would start from $169 one-way. There would be a ''same-plane'' return flight via Nelson on a Tuesday. Mr Wilson said the airline's first month of operation had ''taught us a lot about regional New Zealand's travel preferences''. ''There is a high proportion of our passengers visiting family and friends, and with the Bay of Plenty's population around the quarter-million mark, there are a lot of family connections between there and the South.'' KRA's analysis showed ''huge demand'' out of Tauranga and the Bay of Plenty for Nelson and Blenheim. There was also strong analysis that showed there would be traffic from Tauranga to Dunedin, ''no different from what has already been seen from Hamilton to Dunedin''. The extra flight from Dunedin to Nelson was part of the airline's positioning as a hybrid, attracting both leisure and corporate travel. Corporates required frequency, and five flights a week to Nelson provided that. Mr Wilson said the Dunedin to Nelson flight was attracting the ''visiting friends and relatives'' market. As well, ''I do believe that there are corporates with business in Nelson and Blenheim who appreciate a direct service''. Dunedin to Hamilton was also popular, Mr Wilson said, because the route was the quickest service between the centres. On the sustainability of the Dunedin to Nelson route, Mr Wilson said he would ''describe it as very encouraging. It's a good route but it continues to need development. We're getting encouraging load factors, and we need to quietly, incrementally, increase the yield. There are some encouraging indications that this could be a viable route, but it can't be with just one market sector.'' A mix of leisure, tourist and corporate passengers made a route sustainable and profitable. ''If routes don't work, we cut them. Routes that work we keep, and we try to grow.''


  1. The saab is almost always full coming into and out of Nelson on he Dunedin run.

    What he's saying is the fares need to go up.
    The average price on that sector is around $150

    An airline can only command a yield their reputation can support. Corporate clients want loyalty memberships, reliability, a wide choice of frequency, a vast network where one airline can fly them everywhere they need to travel and perhaps even a lounge.

    That's one key issue I think Ewan has failed to recognise. Most business travellers don't pay for their fares or lounge memberships. Half the fun of the travel is the brief stop in the main centre for a bit of glutany and drink as if it's the last supper. To pay similar or higher fares on an airline less known and with few travel options will never work.

    The only people using this service with great positive feeling is university students, families and the elderly. They love it now, but once the price goes up, they're gone.

    1. Yes I agree.

      Bulk of KRA passengers would be leisure, university students and the retired.

      This would be more so, to and from TRG, which has a large pool for reasonably affluent retirees.

  2. Story from reliable source origin on the cusp of beginning NSN - NPL like they did 10 years ago