Star Alliance member Air New Zealand this week revealed its intention to analyse services to Latin America, becoming a hub for transit traffic between Asia and Latin America. The Hub analyses this strategy.
Air New Zealand this week announced plans that with the introduction of the B787 Dreamliner, it could add a raft of new international destinations to markets in Latin America, with also potential for services in America, China, India and South Africa.
Air New Zealand currently offers scheduled international services to 26 destinations according to September Flightbase data, operating over 250 weekly services. Its international network is primarily based around the Oceania and Asian markets, with services already into China with a twice-weekly to Beijing and a thrice-weekly to Shanghai from Auckland. However the carrier also operates services to London Heathrow routed via Hong Kong and Los Angeles, it also operates to San Francisco, Vancouver and Honolulu.
The introduction of the Dreamliner will bring improved operating costs and make long-haul international routes more feasible. Having been beaten to the Houston market by Continental Airlines which has announced Dreamliner services to Auckland, Air New Zealand will be keen to develop new markets for the B787. Air New Zealand is keenly aware the Houston route would have been a shrewd move to get eastern US to Australia traffic to hub Houston rather than the west coast hubs and has shifted its focus on connecting the Asia to Latin America traffic.
Its potential move to establish Auckland as a hub to link Asia and Latin America is largely based around growing Asian and particularly Chinese investments in Brazil. By routing via Auckland, passengers can avoid the visa requirements that are imposed at Los Angeles and San Francisco.
There are currently limited scheduled services between Asia and Latin America. Existing scheduled services consist of Auckland to Buenos Aires operated by Aerolineas Argentinas, Qantas operates Sydney to Buenos Aires, whilst Latin America giant, LAN operates Santiago to Auckland.
IATA BSP data illustrates that there is potential from Asia to Latin America with over 900,000 O+D passengers flying between the two regions from June 2009 to June 2010. The table below illustrates market share by carrier;
|
Carrier |
O+D Passengers Numbers June 2009-June 2010 |
Market Share |
|
Air France |
171,790 |
19% |
|
Lufthansa |
99,588 |
11% |
|
Emirates |
88,645 |
10% |
|
Delta Air Lines |
58,835 |
7% |
|
American Airlines |
58,731 |
7% |
|
Korean Air |
56,832 |
6% |
|
JAL |
49,800 |
6% |
|
Continental Airlines |
47,075 |
5% |
|
South African Airways |
28,991 |
3% |
|
Malaysia Airlines |
28,012 |
3% |
|
Others |
143,383 |
23% |
|
Total |
901,267 |
100% |
Source IATA BSP data June 2009-2010
The Australasia to Latin America market has seen 372,568 O+D passengers travel between June 2009 and 2010 with 357,722 on non-stop services.
With all the traffic above from Asia to Latin America connecting via the hubs of the ten carriers listed above, there is demand for non-stop services on between the regions, the stumbling block has been the economics associated with any potential new route. With a long sector length and a relatively small O+D demand, carriers have not yet taken the risk, however the introduction of more fuel efficient and aircraft with less capacity may make a route more viable. In the meanwhile, Air New Zealand will see to join the carriers capturing traffic on the Asia to Latin America market, making Auckland a transit point of choice.
With the likes Aerolineas and LAN having warmed up the Latin America to New Zealand market for several years, there is familiarity with New Zealand, even as a connecting point in the Southern cone.
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