Operators fear loss of Kiwi focus if Qantas gains control

Friday 15th June 2001

BEATING ASIA'S RUSH: There is industry concern that capacity for Asian tourists to New Zealand has been cut

By Graeme Kennedy

Inbound tour operators are concerned that a major Qantas stake in Air New Zealand could worsen what they claim is an already deteriorating capacity situation, particularly from growing Asian markets.

They fear Qantas control would lead to route rationalisation, a focus on Australia as a tourist destination at New Zealand's expense and a drop in Air New Zealand's own overseas tourism marketing.

All those factors, they say, would mean a forced reduction in visitor numbers as capacity shrank to a level where insufficient seats were available for tourists who wanted to holiday here.

Contract Pacific director and former Inbound Tour Operators Council (Itoc) president Greg Ritchie said there was industry concern that capacity had been cut despite a surge in growth from Asia following the region's late-1990s economic crisis.

His Christchurch-based company is New Zealand's biggest Southeast Asia specialist inbound operator, bringing more than 18,000 tourists here last year and achieving about 25% growth from countries such as mainland China.

"The trade started to come back last year and although some markets like Taiwan took a little longer than others to recover, when they did they came back very strongly," Mr Ritchie said.

"Yet we are frustrated by these capacity problems. Christchurch-Singapore has been cut back and that is of concern as other Asian markets Air New Zealand no longer flies to, such as Malaysia and Thailand, hub through Singapore to come here.

"Capacity into Auckland has also dropped on some routes as the airlines have not caught up with the growth coming in.

"In some cases, we have had to cancel groups because sufficient seats were not available and we lose those people to other destinations.

"Itoc is continually lobbying the carriers and companies like ourselves talk to them as individuals but there is no relief in sight."

Mr Ritchie said the situation could become more difficult with a Qantas share-holding in Air New Zealand lessening competition and rationalising Asian routes. Overseas offices could be combined, with their destination marketing emphasis moved from New Zealand to Australia where the inbound tourist business was also growing strongly, he said.

Itoc president Don Gunn of Auckland's General Travel agreed that the industry was concerned a Qantas stake in Air New Zealand could dilute competition.

However, he believed the capacity problems were related to the larger issue of seasonality, when there were insufficient seats during the off-peak periods.

"We have been trying for years to encourage the Asian markets to travel here off-peak but that has been difficult," Mr Gunn said. "They don't want to come in our low winter seasons.

"So there are capacity problems at peak times and they are the concerns. If there were more flights we would have more people but, frustrating as it is for us, the problem is directly related to seasonality.

"Unlike Europe, New Zealand does not have a lot of airlines running to Asia - we are governed by what the carriers want to put on in terms of capacity and yield."

Air New Zealand expects to be able to increase capacity to Asia with the arrival of another Boeing 767, expected to join the fleet before the coming summer high season.

Overall New Zealand-Singapore capacity had remained about the same, a spokesman said, although some Christchurch-Singapore seats had been moved to the Auckland route. Taiwan-Auckland had also been increased as some capacity had been shifted to that market from its Taipei-Brisbane service.

"If the traffic is there on any route, we won't ignore it if it makes good business sense," the spokesman said.

Korean Airlines now flies only to Auckland after dropping Christchurch and Air China, out of Taiwan, operates via Sydney but often has limited capacity for New Zealand after carrying passengers to Australia.

Southeast Asian visitors made up almost 16% of New Zealand's total 1.8 million visitors in the year to April, with more than 62% of them on holiday.

Contract Pacific's Mr Ritchie said Asian markets provided the type of tourists New Zealand needed, as they were "reasonable" spenders seeking open spaces matching the country's clean, green image with younger people getting into adventure tourism.

Others, he said, were venturing off the traditional tourist paths and exploring and spending in the regions such as Nelson and Hawke's Bay.

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