Coronavirus: Air New Zealand passenger numbers fall by 50,000 in February

Wednesday, 25 March 2020

Air New Zealand passenger numbers fell 3.5 per cent in February compared to the same month in 2019, as a global aviation body warns that industry passenger revenues could plummet by US$252 billion.

The aviation industry has been crippled by the coronavirus that causes Covid-19 sweeping the globe. Since early February airlines, including Air New Zealand, have been cutting capacity, suspending routes and slashing costs from their businesses in an effort to survive the crisis.

It has been predicted many airlines will not make it through the pandemic, and Air New Zealand has already been offered an up to $900 million loan from the Government to save it from going bust.

International Air Transport Association chief executive Alexandre de Juniac said annual passenger revenues would fall by $252b (NZ$431b) if severe travel restrictions remained in place for three months.

'In a matter of days, the crisis facing airlines worsened dramatically,' de Juniac said.

'Travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business.'

In a trading update posted to the New Zealand stock exchange on Wednesday Air New Zealand said it carried 1.36 million passengers in February - 50,000 fewer than in February 2019.

Its Tasman and Pacific routes were hardest hit, down 7.2 per cent compared to February 2019.

Air New Zealand shares have fallen from $3 at the start of the year to 85 cents at close of trading on Tuesday, a nearly 70 per cent drop.

Had it not been for coronavirus Air New Zealand was on track to have a solid year for passenger growth in Asia, where it carried 16 per cent more passengers in the 2020 financial year to date compared to the same time in 2019.

On February 2 Air New Zealand suspended its Auckland-Shanghai route, the airline's first casualty as a result of coronavirus.

In the weeks following, as the virus spread and was reclassified by the World Health Organisation as a global pandemic, the airline cancelled dozens more routes and on March 16 announced it would be reducing its international capacity by between 80 and 85 per cent and its domestic capacity by about 30 per cent.

In the financial year to date Air New Zealand's total passenger numbers of nearly 12 million are just 1 per cent down on the same time in the previous financial year.

However, the true extent of damage won't begin to become apparent until Air New Zealand posts figures for March and the months following.

On Friday the airline's chief executive Greg Foran said its flight frequency of about 3600 flights per week would fall to below about 1500 over the next few weeks.

However, that drop is likely to be much greater considering that forecast was made before the New Zealand Government announced on Monday the country would go into lockdown for at least four weeks from Wednesday to try minimise the spread of the virus.

Air New Zealand has been putting on extra domestic capacity since that announcement was made in order to help desperate Kiwis return home.

After ban on non-essential travel comes into force at midnight Friday the only passengers Air New Zealand will be carrying will be essential workers, such as health professionals, along with essential freight.

Air New Zealand is still figuring out what its domestic capacity will look like after that point but says it will be significantly reduced.