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Wellington Airport June 2005 Traffic Statistics

21 Jul 2005

Wellington Airport's June 2005 traffic figures have been posted on the Infratil website.

The month of June and the June quarter recorded a disappointing period for domestic travellers. For the month, passengers grew only 1% overall on a 1% decline in seats. While this result is modest in itself, it somewhat masks a very poor quarter. During the June quarter, seats into Wellington fell by 3.2% and passengers fell by 1.7%. Trunk traffic for the quarter was constrained with seat growth of only 1% and passenger growth of only 2% in what is still a bouyant economy, suggesting a very muted competitive environment. The more disappointing news is in regional travel, which fell by 9% overall on a 10% fall in seats. Origin Pacific capacity collapsed compared to last year (down 54%), but Air New Zealand did not increase its capacity to compensate (with only a 1% increase in regional
capacity). With respectable regional load factors of 73%, a collapse in regional capacity and diminished competition,
it is not surprising that regional customers are voting with their feet. Air New Zealand is scheduled incrementally
to bring on larger Dash 8 Q300 aircraft over the next year,
commencing this winter. Travellers, regions and businesses will be hoping that Air New Zealand chooses to use this initiative to grow the market, or that at least a new entrant can see the opportunity in the domestic and regional market.

At a whole of market level, international routes in the month of June 2005 and the June Quarter 2005 are almost identical to the same periods in 2004. In June, passengers grew at 2.3% on a very modest 2.5% overall increase in capacity. For the quarter, both passengers and capacity grew at only 1%. Total load factor for June remained at 64% which was the same as June 2004 (June is one of the slowest month's of the year). However, beneath the totals, there is an ongoing shift to passenger growth where customers can find the greatest diversity of routes and carriers. South East Queensland grew by 55% in June with new routes to the Gold Coast and the Pacific Blue services to Brisbane, neither of which were available in June 2004. By contrast, the Sydney route declined by 21% with a reduction in competitive fare environment and reduction in capacity, with Pacific Blue withdrawing from the route for the time being. The Melbourne route grew modestly by 2.2% with a 15% growth in capacity overall, suggesting that the route is being constrained by pricing levels and structures. New Pacific Island routes have grown strongly on recent months (50% on May 2005), but load factors remain low due to another step change in capacity in June. The outlook for short haul international routes is mixed. Pacific Blue remains upbeat about future growth, Air New Zealand has announced a strategy to cut unit costs on its international short haul fleet and Jetstar has announced that it will fly to NZ from late 2005. At the same time, Air New Zealand continues to campaign for a form of market collaboration with Qantas which would undoubtedly restrict the capacity of competitors to enter and grow the market and it would constrain future growth on Qantas and Air NZ. This is very likely to resurface over the next few months as a matter deserving of public concern and debate.

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