Kiwis planning a North American getaway this year will enjoy lower ticket prices because of "significant competition" between airlines, Air New Zealand's chief executive says.
Greg Foran told Q+A that changes in post-pandemic geopolitical travel, including the closure of Russian airspace to international airlines, have resulted in more airlines choosing to add flights between the US and New Zealand.
The chief executive spoke as his airline reports softened air travel demand, inflationary pressure, and a drop in half-year profits earlier this week.
"What we're going to see out of government during the year is a tightening on spending. Now for our domestic business, about 60% of it is leisure, and about 40% of it is business, government, or small-to-medium enterprises.
"If you get a third of that starting to constrain its spending, we need to be conscious of that … That's one aspect.
"The second aspect is we're seeing some pretty significant competition, particularly out of North America at the moment, and that's more of a geopolitical issue, really, between China and the US.
"There's just a lot of North American carriers now, that are flying into New Zealand, and so what we're starting to see is - particularly down the economy end of the plane - a lightening of loads and a dropping of prices."
He added: "The US-China air travel has been quite slow to start up. Initially, there were literally 24 flights per week - this is a route that used to do between 600 to 700 flights per week. Currently, they're sitting at 48.
"You've got a situation where China is reasonably slow at renewing passports, getting visas out there, so the travel is a bit slow to start up - part of that will be to fuel the domestic economy. The US has got to deal with the fact that to get to China, they're often having to fly over Russian airspace - there's a Ukraine-Russia effect there."
Russian airspace has been closed to foreign airlines since the country invaded Ukraine in February 2022. The closure has meant long detours for airlines, who now have to fly planes around Russia instead of over it.
"The end result of that is that US carriers have got spare planes sitting around. What do you do when you've got spare planes? You find somewhere to fly them.
"We've got 28 flights a week between Auckland and Los Angeles in a route that traditionally would generally run about 14 to 16. There's just more capacity, more capacity means prices come down."
In his interview with Q+A, Foran also spoke about his airline's continuing disagreement with Auckland Airport over landing fees, his assessment of the Kiwi economy, and how he assessed his own role as leader of New Zealand's flag carrier.
Q+A with Jack Tame is made with the support of New Zealand on Air
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