Cathay Pacific

Air NZ to launch HK to London service

PUBLISHED : Friday, 07 April, 2006, 12:00am
UPDATED : Friday, 07 April, 2006, 12:00am

Air New Zealand is to join the crowded skies between Hong Kong and London this autumn when it becomes the fifth full-service airline to offer daily flights on the route.

It plans to begin the service on October 28 during the run-up to the holiday peak season when low-cost start-ups are also scheduled to enter the market and incumbents will be looking to increase their frequencies.

'We are prepared for strong competition and, on the back of our recent product upgrades, for business class and frequent fliers we genuinely believe we have the best premium product in the market,' Ed Sims, group general manager international airlines said yesterday.

Tourism between Hong Kong and Britain has been booming for the past few years. Last year Hong Kong received 464,000 visitors from Britain, up 13 per cent year on year.

Chek Lap Kok will be the mid-way stop for Air New Zealand's new Auckland-London service and Mr Sims expects 20 per cent of the route's travellers to come from Hong Kong.

But it will be flying in increasingly crowded skies.

Cathay Pacific Airways flies four times a day to London from Hong Kong, British Airways flies three times daily, while Qantas Airways and Virgin Atlantic fly daily. Low-cost start-up Hong Kong Oasis Airlines is also expected to begin its maiden flights to London's Gatwick airport in the fourth quarter.

Moreover, Virgin has been looking to move to twice-daily flights if it can secure elusive morning landing slots at London Heathrow.

If all ambitions are realised, there will be 12 daily scheduled flights on the lucrative route come Christmas. But Mr Sims feels he has an ace up his sleeve despite being the newcomer.

'None of the other carriers on the route are members of the Star Alliance, which means they don't have the world's biggest airline alliance behind them,' Mr Sims said, adding that the jury was still out on the viability of a pure low-cost, long-haul model.

Air New Zealand, which already serves London with a daily flight via Los Angeles, plans to leverage its alliance partnership with some of Asia's biggest carriers such as Singapore Airlines, Thai Airways as well as European giant Lufthansa to capture market share.

Air New Zealand's launch may be a harbinger of an emerging alliance battle on the busy sector, an analyst said.

'For the foreseeable future, increasing competition is a big risk for Cathay - not only from new Hong Kong-based entrants, but now from sizeable fifth freedom operators, like Air New Zealand,' said Peter Negline, the head of transport research for JP Morgan. 'The latter's move reflects an effort by the Star Alliance airlines to weaken oneworld's dominance on the lucrative [Hong Kong-London Heathrow] market. The only winner from this battle should be consumers.'

Mr Sims said he expects 50 per cent of the traffic on the route to come from London and 30 per cent from New Zealand.