01 January 2021

Crystal Ball Gazing for 2021


Happy New Year

May 2021 be a better year than 2020!
3rd Level New Zealand wishes you and your whānau a fantastic year with great flying and great plane spotting opportunities.



So as I sit in my non-airline industry armchair I once again turn my mind to the crystal ball and gaze into what might happen to our domestic airlines in the year ahead...




Air Auckland doesn't seem to be anything more than an air taxi and air charter operator out of Ardmore. With no overseas tourists I don't expect any change in 2021.




Air Chathams faces two immediate challenges, namely the future of the Kapiti Coast airport and the urgent need for a medium term replacement for the Convairs which the airline has already indicated will soon be retired. The expansion of the Chathams airport will not happen overnight hence the need for a medium term Convair replacement. The ATR by all accounts is working well on the Chathams service but the lack of the combi/freighter configuration as in Convair CIB is an issue. At present the airline is still operating reduced schedules from Paraparaumu, Whanganui and Whakatane to Auckland, passenger numbers no doubt influenced by the lack of international flights. The airline has indicated it is looking at two new routes to Auckland. One presumably is Masterton, but at this stage the airport rebuild is some time away. One also wonders when the Norfolk Island route will reopen. So for 2021, I think a maneuvering year responding to what arises.





Air Kaikoura's service to Wellington is a niche operation and I don't expect any expansion. The challenge the operator still faces is promoting Kaikoura as a boutique weekend destination. No change expected for 2021.




Air Napier cut its only dedicated passenger service between Napier and Gisborne during lockdown and now just operates a scheduled  courier service on the same route. There are rumours about Air Napier wanting to expand but none of its plans have come to pass. No change for 2021.





Part of the Government package Air New Zealand received was the pledge that no domestic ports would be dropped. This was largely due to the pressure brought by NZ First. In the light of the airline's changed circumstances one wonders now whether the airline will seek to dialogue with the Government on this. Ports under threat would be Timaru, Hokitika, Taupo and Whangarei and maybe some routes such as Wellington-Gisborne.

With the oldest Bombardiers now 15 years old one wonders whether these will disappear and the regional fleet be purely ATR 72s.

Despite the closed borders Air New Zealand is experiencing good demand domestically and this will continue.





Barrier Air has bounced back from Covid and it at almost at its full pre-Covid timetable... it already is to Great Barrier Island and Kaitaia has 11 of its 13 pre-Covid flights. During 2020 Barrier Air has painted its first Caravan in the company's full colours and getting ahead of its maintenance schedule. It looks set to experience a very busy summer but watch out for further development as this innovative operator looks for new opportunities. Last year I suggested that it might look for a larger type or, and if there was to be a new destination, my guess would be Whitianga. The Caravan does limit its options out of Auckland. So maybe this is a time to think beyond the company's current successful formula and look for new niches. 




Of all the luck... Fly My Sky changed hands within days of lockdown. The Matamata/Hobbiton service, which hadn't really taken off was cut. Since then Fly My Sky has started North Shore - Great Barrier flights. Fly My Sky has bounced back and seems to have a good summer of it. But at some point it needs to look to the future. The oldest Islander, SFK, is 50... while the Islander is an amazing aircraft one wonders if it is the platform for the future. 




Golden Bay Air was the second last operator to resume operations - Jetstar was the last. The Airvan has proved to be a good addition to the fleet. The airline indicated that before lockdown it was interested in a larger twin to replace the Piper Seneca. This could be the only future development... the airline is a niche operator and there are no obvious new routes for 2021.





Jetstar tried regional services and failed. No change forecasted in 2021.




Originair is already talking about 2 more Jetstreams and more inter-regional routes. They also have signalled a much improved timetable on the Hamilton-Palmerston North-Nelson route. I don't think they will take Air New Zealand on in routes out of Nelson. Nelson-Napier, Nelson-Tauranga and Nelson-Hamilton are all possibilities. In 2021 Originar will be an operator to watch.





Sounds Air had a hard year but has survived and expanded into Wanaka. Picton, Taupo and Westport schedules are still less than pre-Covid levels. Nelson has not  bounced back yet. So for 2021 I think they will want to look for new possibilities. With the new Wanaka service I wonder if Christchurch could become a new hub for Sounds Air? Certainly links from Christchurch to both Whanganui and Paraparaumu might offer some potential, though with the uncertainty of Kapiti Airport Paraparaumu might not be worth investing in. Another possible route might be Oamaru to Wellington direct morning northbound, evening southbound. So 2021 could well be a year of new expansion.





I presume Stewart Island Flights has bounced back. Stewart Island will continue to growing as a destination. As I said last year, with the runway at Stewart Island and the beach landings the BN Islander is a perfect fit. It is interesting that Queenstown-Stewart Island options are now being offered by Queenstown operators. I can't see a lot of change for 2021.




Over the years Sunair has bounced back repeatedly from its set-backs. It already seems to be busy on its services between Tauranga, Whitianga and the Coromandel. Inter-regional flights from Hamilton and Tauranga to Whangarei and Gisbore were slow to pick up and the fares on these have been greatly increased, a sign that they were only often getting one or two passengers. I suspect this will have the reverse effect and sadly these flights will gradually disappear. Once again, my read for 2021, no new developments likely.


23 comments:

  1. Taupo
    I really don't think Taupo would ever be a route that Air NZ would consider to drop anytime in the short to mid term, I feel that there would be a backlash that they would not want to be apart of and the council has invested in a lot regarding the currently planned terminal (landside, airside and carpark) upgrade and they had a strong case put forward from the very beginning when Air NZ announced the impending closure of Eagle air and potential route closures, Taupo being one.
    I feel that with the amount of businesses, the growing number of people moving from Auckland and buying property. Tourism locally, plays a huge part like Rotorua and once borders reopen that crucial link to the rest of the world. It would be a key route for Air NZ to keep open and I feel that, I haven't been to the airport for a while now, but loadings are not far off
    However...
    What Air Chats have sorta said regarding two new routes... there may be something that they know, that Air NZ has given them the heads up on and they are amidst a potential new destination announcement/route being cut... It was pure coincidental regarding two new Saabs and all of a sudden... They had the capacity to launch straight into Whanganui and Kapiti, maybe a slight exaggeration, I can't really remember the lead in to those routes but it makes you think just how much is going on behind the scenes. Taupo you could say.. Is, much like Kapiti, being that odd route in the schedule that requires a bit more extra planning in having a aircraft there for that two/trice daily flight.
    Gisborne I would feel would be a likely candidate for a cut from Air NZ's schedule be it one or the other regarding links to the current center's that Air NZ operate from and...
    Whangarei... During the heyday it was a hive of activity through the B1900s and the EMB110s, the runway is it's limiting factor and if the Q300 were to go, would that spell the end of Air NZ operations for Whangarei..?? There for the picking for Barrier or Chats.
    Kerikeri is doing okay, pre-covid it was getting up to four flights a day from the Q300, when you think that Whangarei was somewhere between 6 to 7 flights with the 19 seaters to now being neck and neck with the much smaller Kerikeri.
    The Northland scene would be the one to watch as Air NZ would be seen to have to have a name there and a connection. You could say that Whangerei, although being the bigger center, it being that bit closer to Auckland and with a potential new four lane road (Hamilton...) Kerikeri could very well be the only Northland survivor on Air NZ's network
    Seriously feel Barrier should look at Coromandel/Whitianga and I feel that Barrier would be the next airline to watch and see it grow... I feel that being based in Auckland along with Air Chats could be seen as a bit of a hinderance for picking up any major centers/investing in a multi engine aircraft... Could Ardmore or Northshore be a pot of gold or a black hole regrading connecting the greater Auckland region to the rest of NZ and flying completely under the radar regarding indirect competition to Air NZ. Could Barrier invest in a PC-12 and expand beyond it's bread and butter being GB island and Kaitaia... Become truly an regional NZ airliner
    Sounds air or GBA... Operating under the radar with flights out of Hastings Airport and almost 80,000 population at it's doorstep be it Wellington or through to Auckland and with a combination of the PC-12 and the C208's... Little work would be needed at Hastings for those aircraft
    Whakatane to Wellington Air Chats
    Masterton to Auckland Air Chats
    Whangerei to Wellington?? what was Air NZ's loads like during that brief stint
    Whanganui/Kapiti to CHC... one is population and what benefit it would have and the other is the pending land situation...
    Agree with Oamaru... Mainland air and Air NZ failed could Sounds air work a smart schedule, Like you mentioned... Sounds air new hub Christchurch... Hokitika and Air NZ's final hurrah and a end of an era for the flying kouru on the Westcoast??

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    1. Not to sure about your TUO and GIS analysis... HKK, I'm told, gets good loadings, despite a timetable that doesn't suit West Coast business people. Personally I think Air Chats with an inter-line with NZ would be the best deal for HKK. Hastings is an interesting idea but with a 1075x14 metre runway it might be too short and narrow... Whangarei is 1097x30 metre. As much as I love the PC12 it is an expensive machine - high purchase price and maintenance costs compared to the C208.

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    2. WLG-GIS is actually a VERY strong performer as well. LF's are as high as anywhere else and fares high as well particularly during business times. NZ uses WLG to connect GIS through to the South Island which ensures good loads (which is why TIU-WLG is also such a good performer connecting to North Island ports). GIS is extremely remote and doesnt suffer from the closeness of better served airports that other routes do eg. TUO vs ROT, WRE-AKL.

      The problem with TUO-AKL is the terrible connecting option it provides. Great if your going to AKL, useless is you are going to anywhere else (apart from Northland) and so people will drive to ROT for connections to WLG, CHC and onward to the rest of the South Island.

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    3. Gisborne gets a fair amount of connection passengers via Wellington which helps it to get better loads on that route.

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  2. Taupo is the worst performing port on Air NZs domestic network. If Air NZ drops anymore ports, Taupo is first up for knife. Not that Taupo should fear, the route is a perfect fit for Air Chathams. As a long term airline staffer, I can honestly say, Taupo has not bounced back after the Covid Lockdowns. Even upping the number of seats in the cheaper fare buckets hasnt helped. There would be backlash for any route closure, naturally. But Air NZ would have reason to drop services. Taupo is woefully underperforming. With ROT and HLZ airports close, and with a airline in AKL in the form of Air Chathams likely to step who actually do the job better in my opinion. (Smaller planes, increased frequency)

    To think Air NZ would quit Gisborne is nothing but a laughable, fantasy idea. Gisborne is a STRONG performer. Gisborne can be a little seasonal, but even so, year round numbers continue to increase year on year. Helped by the amount of people now choosing to call Gisborne home. The AKL-GIS flights have a very good load factor. Air NZ will NOT be dropping Gisborne.

    On that same note, you will never see Air NZ drop Hokitika, purely because of the WICKED backlash that would follow. To drop services to a entire region like the West Coast would cause outrage, and Air NZ is WELL aware of this. Westport was a necessity back in the day, and victim of Eagle. (All worked out for WSZ anyways) (May work for NZ, but love Sounds Air) Hokitika is safe, purely because it is Hokitika and its location and position as the Airport service most of the people of the West Coast region.

    Timaru is a pretty performer which has always kind of baffled some of us in the company. I myself always couldn't fathom how TIU was going to support 2 Q300s a day. A good schedule helps, a overnighting aircraft allows for those good departure times. I know there is a lot of people who use the services to meet up with the Sandford boats that arrive/depart Prime Port in Timaru.


    ATRs can fly into WRE, has been done before. Just not with a full load. WRE is a interesting one. A lot of people live around WRE now, and the fights, especially the business timed ones are very important. I would be surprised to see WRE gozo given the A - satisfactory load factors and B - The already Political anguish regarding anything to do with Northland. To withdraw air services from Whangarei would disadvantage the Community there big time.

    Air Chathams knew of PPQ several months before Air NZ made the controversial announcement. Air NZ and Air Chathams have a good working relationship, which annoyingly doesnt extend to a interline agreement.

    So in a nut shell from someone within the industry and airlines -


    If Air NZ were to make cuts, Taupo WILL be first on the list. Reasons being the woeful load factors, proximity to other well served airports, and that there is another AKL based airline that would likely pick up the route.

    GIS will never be dropped. Why give up a good thing? I find it weird that people would even think that.

    HKK is safe as houses, its location helps and the fact it is the only airport left on the Coast now served by the national carrier.

    WRE will stick around. It is a vital airlink to the local economy and given how much the Government is wanting to invest in Northland and try and kickstart the economy up there.

    Not to say however that these ARE weird times we are living in, and anything could happen. It's like back in the day, I never foresaw Eagle closing up. I mean it was hemorrhaging money, but I kinda thought it was just a necessary evil to keep that network nice and widez and keep other smaller airlines out. I'll never forget the look on the faces around the office when we got the internal email about Eagle closing down. That was big news. So anything can happen I guess...

    Happy New Year everyone

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    1. Thanks - an interesting analysis... I agree TUO would be a great fit for Air Chathams. I certainly don't think GIS-AKL would go... my observation is that GIS-WLG struggles. Interesting what you say about WRE. The rumours continue about the Q300s... NEA is 16 years old in a couple of weeks so one wonders what will happen. I certainly think an interline agreement with Air Chats be a prerequisite of any further withdrawals... Being part of Star Alliance would preclude interline agreements with Sounds Air or Barrier Air

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    2. Whangarei to Wellington could be re started using the Q300 allowing connections to South Island and direct service to the capital. It's the largest city in NZ without a service to Wellington it is even larger than Invercargil.

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    3. That is really interesting about the WRE population!

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    4. Air NZ will not pull out of WRE. WRE district population is growing fast and was estimated in 2020 to be over 98,000. Flights have good loadings and Air NZ have added additional weekday flight to schedule from 5th Feb. WRE has often been treated unfairly in the past by Air NZ with poor flight schedules. Certainly believe there would be the demand for WRE to WLG direct flights. The Q300's can operate in to WRE with no issues and as mentioned in earlier comments, ATR's have operated with reduced loadings.

      Council is looking at new airport sites as media release from December: https://www.wdc.govt.nz/News-and-events/Latest-news/Future-proofing-air-travel-20201204

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    5. Yes indeed for the size of the city of Whangarei its well underserved only 3 Dash 8s to AKL and that's it today. While Invercargil city at around only half of the size has 9 Air NZ flights today.

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  3. Something I have been thinking of is for 3rd level operators to grow do they need to join Air Chathams and have there services showing in a Global distribution system such as Sabre.
    The reason I say this is the average business person who books business travel books through an online booking service rather than the individual airline booking system
    Using webjet as example which I assume hook's into a GDS and filters the result
    If I search Auckland Kaitaia flights it comes up as no flights found. Similarly searching Nelson Palmerston North will only give Air New Zealand flights via Auckland or Christchurch and Wellington to Nelson only gives Air New Zealand flights.

    My point is that the average New Zealand is only aware of 2 airlines operating in New Zealand and if they can't easily find information about 3rd level schedules than they won't book. Hence for 3rd level operators they need to concentrate on increasing exposure to the general public.

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  4. There is a lot of information available on District Council public disclosures which might inform these comments.
    Here are a couple of examples:
    Taupo - the 11 May 2020 report to the airport committee showed that for the years 2014-2020 monthly passenger numbers in 2019 every month exceeded those for the same month in every previous year; and that 2020 was up again over 2019 for January and February. Between 2009 and 2017, total passenger numbers for the year never exceeded 50,000 but in 2017 they were 59111, in 2018 64876, and in 2019 70614. (Soundsair started their service from Wellington in June 2015). The surge in passenger numbers must be mainly Air NZ.
    Whakatane - the Council discloses annual reports, its ten year plan, and its 2008 Master Plan. This last reported a strong lobby effort (and set out statistical data) arguing for a Wellington service. Air NZ ran one until 2012. In the last full year (2011) total passenger numbers at Whakatane to all destinations were about 40,000, of which less than 10% were on the Wellington service according to the Council reports of the time.
    Nothing in these figures suggests Air NZ would consider leaving Taupo, or any operator would consider taking on WHK/WLG.

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    1. No one said they were considering leaving Taupo. All hypothetical. That Council report on TUO is 'until' May 2020. I know how many people I am loading onto the TUO flights, and since lockdown, loadings have been WAY down.

      Nothing in figures for PPQ or WAG back in the day for example would suggest Air NZ pulling out, but didn't stop them pulling the pin

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    2. Taupo must be really struggling, as today a weekday it's only getting the one flight NZ8095-8096 in at 1740 and out at 1810. So loads must be terrible now.

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  5. Air Chathams flew Christchurch to Te Anau today using their ATR so they might be testing the waters before embarking on a regular service.

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    1. There standard summer charters... it has happened before

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  6. 2021 is essentially going to be similar to late 2020 with restrictive boarders due to ongoing mutations of the SARS-cov-2 virus and the economic issues possibility a recession. There could be travel bubbles with some South Pacific nations and possibility with Australia, if the Australians can stop fresh outbreaks of SARS-cov-2 virus. This mean any international passenger air travel to/from New Zealand will be limited until 2022 or 2023.

    Domestic air passenger travel will see a small rise on the current numbers but in essence it will be business as usual by all regional carriers.

    Air NZ will retain the Q300's, as I believe their book value is zero, so it will be more economical to keep them until international prices of used aircraft picks up, for low volume routes and operating to airports that have short runaways.

    With regards to regional airports, all except PPQ will be still be operational. I am not sure what the future of PPQ is going to be, it will up to what the government, Kapiti Coast District Council, Greater Wellington Regional Council, Iwi and the airport owners decide upon. I think the District and Regional Councils and Iwi will be the new owners with financing from the Government.

    It will business as usual for Air NZ and there will no termination of any regional services until the final capital restructuring and funding needs of the airline have been sorted. I wouldn't be surprise that the government will turn the $900 million loan into equity to increase the government's shareholding which should be completed this year.

    With regards to Air Chathams, it will be business as usual with possibility an AKL/MRO service being announced.

    I wouldn't be surprise that Air NZ doing a damp lease deal with Air Chatham for some of the Q300's and there could be some ATR72-500/600F being added to Air Chatham's fleet to replace the Convair freighter. Might see another ATR72-500 either as all passenger, combi or QC.

    With regards to Jetstar and the remaining regional airlines, it will business as usual for the rest of 2021.

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    1. Kris I think you are right on the mark. Masterton will likely start with a Metroliner when it finally gets going. Air Chathams will get two more ATRs so they can retire the Convair by the end of the year.

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    2. Interesting comments Kris. I don't think MRO will start with border closures. A lot of Air Chathams' passengers to Auckland are transhipping to international services which aren't happening.

      I think they will have to look seriously at another ATR. The big issue for the ATR to the Chathams is the inability to operate as a combi. There is a 600 series version... the development and certification for a 500 series might be prohibitive. I combi would also be good for Norfolk when that eventually reopens.

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  7. Anyone want to offer a view on whether regional jets will have any place in the domestic market? Based on the recent Alliance Airlines acquisitions of secondhand E190's there are some relatively cheap 12 year old aircraft out there? Would the operating costs stack up on these?

    As a customer, it would be great to see some regional jets operating on sectors such as IVC/WLG, IVC/AKL, DUD/WLG, CHC/ROT, CHC/HLZ and CHC/TRG. Would they work for Air Chathams to the Chathams and Norfolk or is there insufficient cargo capacity?

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    1. I would say very unlikely as the costs of bringing in a new type of jet would be too high. Training,maintenance,spares all add up. The fleet would need to be 20 to have any economy of scale to make it work. There would not have enough routes to support a regional jet operation. Nelson would have the numbers but the runway is too short. So best left with existing types 320, arr, q300 and increase frequencies.

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  8. Jarden - I agree with you. Air Chathams would use Metroliner's for any AKL/MRO/AKL services.

    Steve - The Wairarapa is a fast growing region due to increasing number of people from Wellington moving to the region that is why the rail line between Upper Hutt and Masterton is being upgraded to cater for increase commuter rail travel. Both the Masterton District and South Wairarapa District Councils are keen to get a direct air service between Auckland and Masterton. Closed or restrictive boarders shouldn't the main reason for an air service to start, it should be based of the based on commercial, friends and family and leisure reasons.

    Whether we like or not, the Auckland region is the largest region in NZ for population and business. The Wairarapa region does not have any 'direct' public transport services between Masterton, Hamilton and Auckland.

    If Air Chathams does operate AKL/MRO/AKL services, the schedule would initially be 2 return flights (morning and afternoon) Mon, Wed and Fri with one return flight (midday/early afternoon) on Tue, Thu and Sun.

    ATR does offer freighter conversion for the ATR72-500, as the ATR72-600 is essentially the same airframe as the -500.

    Have a read by clicking on 'Freighter conversions' - https://www.atr-aircraft.com/our-aircraft/previous-generations/

    I do agree with you that a combi good for both Norfolk and Chathams Islands.

    If Air Chathams does decide to use the ATR72 for the mainline fleet, I would go for 2 freighters, 1 passenger only and a combi with a QC at a later date, as it takes approximately 45 minutes to change a ATR72 freighter to all passenger. The ATR72 fleet would be backed up with the Saab's for higher density regional routes and the Metroliners for lighter regional routes.

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  9. So nothing on Airwork / ParcelAir?

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