14 Aug 2008
July domestic passengers were 16% above the previous year, a very strong result in the current climate. The average seat load in July of 75.0% was above that for June, in line with the previous July despite the 16% increase in seat capacity. This result bucks world trends of declining capacity and loads due to higher costs (fuel driven) and weakening demand. The result is further evidence of the power of airline competition. Unfortunately, the investment in airport capacity that enables competition has suffered a major setback in the Commerce Amendment Bill process (see comments below).
Year to date passenger volume for the four months ended July is 19% above the previous year following a similar increase in seat capacity. The average year to date load is a healthy 73.7%.
International passengers were above the previous year by 7% following a 5% increase in capacity. This shows that the 6 % reduction in passengers in June was, as reported, mainly due to the weather factors in that month rather than economic factors. An average load factor of 77.5% was well above the traditional seasonal lows in May and June for trans-Tasman travel. Year to date passengers are 0.8% below the previous year with seat capacity increased by 2%. Pacific Blue increased its Brisbane schedule from 3 to 5 times per week from 20 June.
WIAL is extremely disappointed that the Commerce Select Committee has retained the airport provisions in the proposed changes to the Commerce Act. The Airport specific provisions were introduced late in the process without consultation, breaching the Government’s recent commitments to quality regulation. These provisions were also not supported by officials who pointed out that the industry is working effectively, investment is healthy, and that there is no analysis to show inappropriate behaviour on the part of the main airports. The proposed changes introduce significant uncertainty for future investment over the next 2-3 years while the Commerce Commission is developing its pricing guidelines and disclosure requirements. This is in stark contrast to the stated objective of providing greater certainty for investment. Investment in Airport capacity is critical to the New Zealand economy as it is the major enabler of competition that ensures affordable airfares.
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