Happy New Year
to all readers of
3rd Level New Zealand
May 2025 be a good year for you
and all those you love
Once again 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 regional airlines in the year ahead.
Overall I think the domestic airline industry is struggling... Costs are high, aircraft are getting older and having maintenance issues and there are no real alternatives for fleet replacement, certainly affordable replacement. Government is going to have to think how regional air services fit into the scheme of things and how they should be supported. So I think it will be a year of change.
I'm starting with Air New Zealand as my prediction is this will be the game changer for the rest of the country. They are continuing to struggle with engineering issues on the Dreamliners and Neo Airbuses and this is costing them a small fortune. They are also struggling with the aging Q300s. Their fares are going up to recover losses. The more flights that are cancelled "due engineering" and the more expensive the fares the less people will fly as the service becomes unreliable. In these first weeks of 2025 their Invercargill-Wellington direct flights will be cut, there will be reduction in frequency over the domestic fares and fare rules are changing making it more expensive to do two or three stop domestic flights. Is this a prelude to further retrenchment?
So my prediction for 2025... An all ATR 72 fleet for regional service will become more attractive so maybe more ordered. Timaru, Hokitika, Taupō and Whangarei are dropped from the network creating a lolly scramble for other regional airlines. If they do drop these Government needs to insist on interlining.
On busier regional routes and on short-haul internationals and as Qantas use Embraer and Airbus regional, look for an announcement of a regional jet for Air New Zealand.
Air Chathams are loved by the local communities they serve but the Saabs are getting old - KRA has been out of action since mid-October for heavy maintenance. The lease of a Saab or an ATR to Tonga is surely helping the bank balance as the airline faces challenging economic times. The ATR has passenger appeal but it is not as versatile aircraft as the Convair was. The airline has made no secret of the fact that it needs local body and Government support to ensure regional connectivity.
Nonetheless Air Chathams always has an eye for opportunity. So, if they can maintain and perhaps expand their Saab fleet, look for Masterton joining the network. If there is an Air New Zealand lolly scramble the Saab would be a good fit for Timaru, Hokitika, Taupō and Whangarei and Air Chathams knows how to serve local communities. I don't think we will see a Boeing 737 on the Chathams' run unless there is other work for it.
The same as last year. Air Napier still operates a courier service between Napier and Gisborne and regular medical flights to between Napier and Wairoa. Despite their interest in sea-gliders and electric aircraft under current management they have never extended their current operations. My prediction for 2025, no changes.
Last year Barrier Air added a new destination and a new Cessna Grand Caravan. They do all things well and are, I believe, the most dynamic airline in New Zealand at present. They have stuck to the formula that works based on the Caravan and working with local communities where they get good support. The aircraft are well presented and the airline is renowned for being reliable and good passenger service.
So my prediction for 2025, expansion of frequency for the Northland services and maybe a new route. If there is an Air New Zealand lolly scramble Barrier Air would be well placed to do Taupō and Whangarei but the Caravans would be too small. Herein, lies the problem, what could they use?
Golden Bay Air continues its niche service supporting the Golden Bay Air and Heaphy Track traffic. They have never indicated any desire to expand beyond Golden Bay. Personally I wonder if Originair's Jetstream will be too big for Westport on what is essentially a leisure timetable. Perhaps Golden Bay Air should be thinking what is a suitable aircraft to use for Westport... The Islander would be too slow and noisy.
My prediction for 2025, no changes but perhaps looking ahead for the future.
Island Aviation continues to link the Barrier from North Shore and Waiheke Island. They fly when traffic is offering. My prediction for 2025, no change.
I recently flew Jetstar when I had to travel at short notice. Air New Zealand's fares were horrendous... Jetstar's were reasonable. Both Jetstar flights were on time and I was amazed how quickly they turned the Airbus around. Air New Zealand increasingly seems to be running late. Talking to other flyers they are making similar observations.
My prediction for 2025, no major changes but again a ramping up on frequency as more and more people are becoming disillusioned with the national carrier.
Merlin Labs continues to do their research and development work. If they can find some domestic freight to fly in 2025 we will see their Cessna Cargomaster on such services as we did least year.
Originair have already announced flights to Westport and Taupō. The Taupō service is a trial one for six months. Robert Inglis has a wide experience in regional airlines. The challenge for Originair is determining what sort of operator it wants to be, meeting the needs of business travellers or the leisure market. The two are not the same and their schedules reflect this. The Jetstreams are not new and expensive to maintain and operate. I wonder whether they will be able to make Westport and Taupō work with an 18-seater, even with a reduced schedule, when Sounds Air couldn't make them work with a 9-seater?
The other big question will be, will Originair have a part to play if there is an Air New Zealand lolly scramble? Certainly Robert Inglis has a history of being able to work with Air New Zealand but I suspect the Jetstreams would be too small for some Air NZ routes and would be unsuitable for Whangarei.
My prediction for 2025, watch this space for further developments.
Airwork have been retrenching their operations particularly in Australia where Texel has taken more of their work. There has been no changes in New Zealand. Word has it that while Texel and its aircraft are more reliable it is not as cheap as Airwork. Customers want both.
My prediction for 2025 Airwork will need to find some newer aircraft if they do not want Texel to erode more of their market share.
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Sounds Air have just pulled out of Taupō and Westport which was a sound economic decision. The airline has stated very clearly that regional air services require Government assistance as in other countries. While Cessna Caravans are very economical they are not suited for flights beyond Cook Strait. The Pilatus PC12 is an expensive aircraft to operate. Now that Sounds Air has only two routes which need to be operated by a PC12, from Blenheim to Christchurch and Christchurch to Wānaka the question is, is the PC12 the right aircraft. Both routes could sustain a larger aircraft with a larger twin turboprop that might make more economic sense.
So my guess for 2025, no further changes for the network but watch for PC12s departing the fleet.
Exactly the same as last year... Stewart Island Flights is another niche operator, with its focus on the air service to Oban and supporting trampers by landing on Stewart Island's western beaches. I have always felt Queenstown-Stewart Island would be a good fit but not operated by Islanders. In saying that the BN Islander is ideal for the Stewart Island service to Oban's Ryans Creek airfield as well as the beach landings on the Stewart Island's western beaches but the time must surely be coming when they will need to look at Caravans.
In the meantime, my prediction for 2025, no changes.
Sunair resumed their flights between Gisborne-Napier and Tauranga-Hamilton last year and Whakatāne will be reintroduced to the network from early 2025. In May last year Dan Power said he has eyes on other routes as well “once we build our Hamilton-Tauranga connections with Eastland”, along with more aircraft early in 2025.
Certainly the Aztecs have bee a great workhorse but they are old and don't have much appeal. I still believe there is a market for inter-regional travel so it will be interesting to see what Sunair will do.
So my prediction for 2025, Sunair is a survivor and adjusts to demand and competition but again, watch this space. Watch for a new type. If the Originair trial Wellington-Taupō service doesn't work Sunair could look at that but not with Aztecs!
Texel seems to be more focussed on Australia at present for its air freight services. However, I have a feeling it is not finished with New Zealand yet. In 2025 watch for it trans-Tasman with maybe some domestic expansion.