20 Feb 2006
Wellington Airport January 2006 traffic figures have been posted on the Infratil website.
January traffic was a repeat of December's adverse movements. Like December, the effect was exaggerated by adverse weather and associated interruptions to services on three days. Domestic traffic fell 4.25% overall on a 2% reduction in seats. Year to date domestic growth now stands at -1%. Domestic load factors for January were 71%. The result for domestic passengers at Wellington is in accordance with similar flat or adverse trends at other major NZ airports with falls also recorded at Christchurch over the past three months (-1.2%, -3.9% and -4.6% respectively). Auckland data for January is not yet available, but their domestic passengers fell 2.5% in December.
International passengers in January fell 12.6% on a 12% reduction in seats (year to date down 2% for passengers and 1% for seats). About a third of January's passenger and seat reduction reflects the three days that Wellington experienced interruptions to services during the month. On international routes, passengers followed seat capacity - routes grew where seats were added and fell where seats were withdrawn. Sydney remained the disappointment, with January down 25% on the same month last year. All carriers showed lower capacity to Sydney this January. South East Queensland routes (where competition and capacity growth have emerged) were again the good news story, up 19% on last year. The overall load factor for international was 80% (same as last year).
Wellington's recent international trends are consistent with a more generalised trend for New Zealand. Australian visitation to New Zealand was down 1.8% in December and Auckland and Christchurch both experienced falls in Australian arrivals, albeit at lower figures than Wellington. Like Wellington, growth in Australian arrivals had been generally adverse at Christchurch Airport since April 2005. For Auckland, this is a more recent trend. Nationally New Zealanders going to Australia were up 2.7% in December, and this is reflected at both Auckland and Christchurch. However, at Wellington, NZ resident departures to Australia were down in December. Even taking into account some impact of weather disruptions, this is likely a result of a lower level of schedule flexibility and capacity offered at Wellington (particularly to Sydney) as well as less competitive fares compared to last year and compared to other cities. Wellington residents responded either by choosing not to travel or travelling through other ports. As the market consolidates, Wellington is experiencing weakness in the more price and capacity sensitive travellers - holiday arrivals and those visiting friends and relatives.
Despite the recent disappointing results, international passenger levels remain well above those two years ago, just before the NZ aviation market began going through a more competitive phase (January 2006 is 20% up on January 2004; year to date January 06 is up 28% on same period to January 2004).
The recent adverse air travel development is contrary to Wellington's underlying demand circumstances (inbound and outbound). Wellington has strong income and employment levels (all factors positively related to a propensity to travel), as well as having a good underlying corporate/government market. Perversely, some of the softening in travel growth coincides with a period when Wellington recorded the highest growth in economic activity in NZ (Q3, 2005). Inbound visitation growth has been stronger and more consistent in Wellington than almost any other region in NZ, as measured by guest nights. Other things being equal, we would expect the adverse trend on the Sydney route to continue until we reach the anniversary of the departure of Pacific Blue from that route in the second quarter of CY2006. More generally, Wellington can expect to return to a more positive trend if the airline industry exhibits a sustainable level of competition over the course of the next year or two, a trend that can be observed at other ports in Australasia.
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