Brook Sabin is a travel journalist at Stuff.co.nz.
OPINION: Air New Zealand management would have been seeing red numbers on Thursday. A very Qantas shade of red.
You see, the flying kangaroo slapped the national airline right in the face, and I’m here to explain why it’s great for you and me.
On Thursday, Air New Zealand announced its annual result. These are highly orchestrated affairs that require months of planning with stunning videos and presentations.
The headline wasn’t great: a net loss of $591 million for the year to June 30. But the airline took pains to convey the good news: Travel is now loading faster than expected, and the airline has a lot to look forward to. It is investing in new technology, new planes and a new route – launching its first service from Auckland to New York.
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CEO Greg Foran couldn’t contain his excitement when the early 2022 start date was announced.
“Traditionally, flight numbers 1 and 2 are used for an airline’s main route. And that is what New York will be: our primary route,” he said at the time.
So on Thursday, as Air New Zealand painted an optimistic future, the red kangaroo jumped out. He had a message addressed directly to Air New Zealand: We’re here for lunch, and we’re after the Big Apple.
There is a plane-sized game of chess underway between Air New Zealand CEO Greg Foran and aviation veteran Alan Joyce, who has been at the helm of Qantas for more than 14 years. Let’s not forget how ruthless (and effective) Joyce is: in 2011 he grounded the entire Qantas fleet to end a labor dispute.
Now, there is an ongoing battle for North America. For years, Air New Zealand has been trying to make Auckland a hub for Australians who want to travel to the United States.
For example, if you live in Adelaide and want to go to Houston, the Qantas route is long. It involves flying first to Melbourne or Sydney, then to Los Angeles before finally transiting to Houston on partner American Airlines.
There are two big problems with that: you need to navigate through Los Angeles, where they bark at you like sheep corralled in a pen.
Second, Qantas passenger traffic to American Airlines and domestic flights in the United States is irregular.
Alternatively, you can fly Air New Zealand on a direct flight to Auckland and then continue on another direct flight to Houston. It’s one flight down, she avoids Los Angeles and stays with Air New Zealand the whole way.
The national airline has long seen this as a great opportunity.
Just as Dubai is perfectly positioned to be a transit hub to Europe, could Auckland be a springboard for Australians to the United States?
Just look at the Air New Zealand graphic below, and it all becomes clear.
Last year, Air New Zealand even offered free Gold status to Qantas Gold members. In the airline chess game, the national airline is much smaller, but it plays an exceptional game.
Now that the worst of the pandemic has (hopefully) passed, Joyce is back to her best. The day Air New Zealand announced its results and his vision for the coming year, Joyce swooped in announcing a showdown on Air New Zealand’s new mainline route and a major makeover of his lounge at Auckland Airport.
Imagine for a second if the headline were the other way around: Air New Zealand announces that it will take on Qantas on its flagship route from Sydney to London, on the day the airline delivers its annual result. That gives an idea of the scale of what is being developed.
Air New Zealand reportedly received a slap in the face for the announcement. But that’s where it gets interesting. Before leading our national airline, Foran led Walmart USA.
He brought the company to $485 billion in annual sales, more than the entire GDP of New Zealand. This guy is used to playing hardball, and he’s an even match for Joyce.
The national airline is working on a new app, new cabin layouts, and has new planes to look forward to in the coming years. On top of that, there are rumors of more North American routes.
Qantas better be careful.
Australians may like to transit through Auckland instead of Los Angeles. And in that case, Air New Zealand will always win.
The result is good for us, the consumer. More seats mean better prices. And Qantas will help bring some Americans here and leave them in Auckland to spend big in New Zealand.
Both airlines are coming out of Covid wanting to gain market share. So break out the popcorn, because the great Tasmanian rivalry isn’t just on the rugby pitch. It’s also taking place 35,000 feet in the sky, and Air New Zealand has just been given a red card with the Qantas logo.
The problem is that I think Qantas is going through a difficult time.
Air New Zealand is one of the best airlines in the world, and I wouldn’t want to face them with home court advantage.