American Airlines: The decision that led to return to New Zealand – New Zealand Herald

Board of Airline Representatives executive director Justin Tighe-Umbers talks about the rebuilding of airlines, with New Zealand opening up the borders.

American Airlines' international chief says the decision to come back to New Zealand this summer was based on what the carrier is seeing in other markets.

As border restrictions ease, the pent-up demand to travel needs to be met and the juggernaut is returning after two years this summer with daily non-stop flights between Dallas Fort Worth (DFW) and Auckland.

And Jos A. Freig, American's vice-president for international, told the Herald that DFW was the logical place to relaunch into New Zealand from what is its biggest hub.

The airline is the world's biggest by several measures and, with its alliance partner Qantas, will introduce some strong transpacific competition to Air New Zealand which is focusing on North America with its network rebuild.

DFW to Auckland was due to launch at the end of 2020 as a seasonal service but was suspended because of the pandemic. It also quit its LA-Auckland flights launched in 2016 and shelved plans for LA-Christchurch flights planned for late 2020.

Speaking from the airline's DFW headquarters, Freig said that American has restored flights around the world when the easing of Covid border control conditions allowed. The new DFW-Auckland service was an example of this.

"Once governments make some changes to conditions inbound and ease travel restrictions from a Covid perspective, we see that pent-up demand. This is no different in this particular case."

American has a fleet of close to 1000 aircraft and will use a Boeing 787-9 Dreamliner on the Auckland route.

It operates 800-plus domestic and international flights a day to more than 230 destinations through the main DFW hub, which provides greater connectivity than through Los Angeles.

While the airline doesn't release details of booking levels, the service announced in late May would appeal to both Kiwis flying to the US and the inbound market, because of American's broad domestic and international customer base.

"From our perspective, I think it's great for both directions."

Daily made sense as it made most efficient use of the two aircraft required and gave maximum flexibility for passengers on the seasonal service that will run from October 29 until March 25.

Auckland Airport estimates that every Boeing 787 Dreamliner touching down daily on average contributes $157 million in tourist spending and carries $500m worth of freight over a 12-month period.

Freig said Los Angeles to Auckland or Christchurch was an option in the future but there were no current plans for flights.

"As we look at our network we always look for opportunities and the ... world changes really fast and post-Covid has changed even faster.

"So I would say that there's always an opportunity for us to look at (but) not anything we have on the horizon for the next 12 months or so. I wouldn't discount it, but it's certainly not part of our current plan."

When American launched in New Zealand in 2016 there was intense competition and it offered some aggressive pricing.

Constraints on capacity, high demand for travel and the need to recover costs, especially for fuel and staff, were hitting all airlines.

Will the low standard fares return? Freig is non-committal.

''It's difficult to have a crystal ball to really hone in on that it wouldn't surprise me of course. That if as long as the pent-up demand continues to be there, there'll certainly be what I would describe as healthy airfares.''

Links between New Zealand to North America were rebuilding faster than other parts of airline networks meaning more competition. Air New Zealand will also fly into Texas, up against American, with three flights a week into Houston.

Freig said the easing of travel restrictions was helping but the current pre-departure Covid testing for New Zealand and the United States was a barrier to faster recovery for the airline industry which had lost billions of dollars during the pandemic.

Airlines for America and other travel lobby groups in the US and in New Zealand have been pushing to have the pre-departure tests dropped, as they have been in much of Europe, some parts of Asia and Australia.

They argue that with high rates of vaccination or immunity there were few health reasons to continue with pre-departure testing regimes.

Freig said tests were inconvenient and increasingly hard to find and the upload process could be difficult for some people.

"And let's face it, there's also the risk for some customers that can be asymptomatic and now (are) stuck in a place," Freig said.

''We're going to continue to beat that drum and continue to push to have ease of travel and really continue to tell the story, which is the story of an industry which for the last three years that have lost billions of dollars across the world."

In spite of speed bumps, American has built back capacity on other routes.

Domestic flying was booming and Europe was popular.

"Everything's pointed in that direction because there's so much - when you think about Americans going to Europe for the summer it's a big market and it's been a market that for three years Americans haven't been able to get to."

The airline's international growth had been crimped by production problems at Boeing leading to delivery delays of new Dreamliners.

"We're constrained no different than other carriers - we're constrained a bit on the Boeing 787 delivery timeline."

Staff shortages that were plaguing airlines and other parts of the aviation sector weren't so acute, said Freig.

''We feel really confident as we go into our summer here in North America from an American perspective we're well staffed where we need to be. We have some pockets like everybody else does, where we have some concerns about vendors around the globe,"he said.

"We have some concerns where governments are struggling to get folks back like either immigration or customs officers or security officers and places like Canada and some places like Europe are starting to see this."

In April the airline reported first-quarter revenue of US$8.9 billion, ($13.5b) representing a recovery to 84 per cent of comparable period revenue in 2019.

Its net loss was US$1.6b but it said it was profitable excluding net special items in March and said then it expects to be profitable in the current quarter, with capacity back to up to 94 per cent of pre-pandemic levels.

With regional partner American Eagle, the airline has nearly 6700 flights daily to 350 destinations in 50 countries.

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American Airlines: The decision that led to return to New Zealand - New Zealand Herald