Virgin Australia reduces the trans-Tasman services from Auckland and Chirstchurch

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Virgin Australia is the latest airline to adapt its business in New Zealand while the aviation industry faces increasing difficulties.

A spokeswoman for Virgin Australia said she is reducing trans-Tasman services in Auckland and Christchurch to align with the change in demand.

The Auckland-Sydney program will reduce from 18 to 15 round-trip services per week from late July to late September. The flights will increase outside of those times, but could fluctuate depending on demand, he said.

Virgin said her Sydney-Christchurch service is also turning into a seasonal service, operating only during the high season, from late September to late April.

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The reductions come a year after Air New Zealand broke the pin on an eight-year alliance with the Australian airline and continued to collaborate with Qantas.

The spokeswoman said Virgin is engaged in the trans-Tasman market and will continue to manage 200 services a week between Australia and New Zealand between July and September.

On all trans-Tasman flights Virgin operates the business class and economy Boeing 737-800 and all fares include 23 kilograms of checked baggage plus one meal.

Virgin Australia operates Boeing 737-800 on all its trans-Tasman routes.

PROVIDED

Virgin Australia operates Boeing 737-800 on all its trans-Tasman routes.

Virgin Australia offers flights from Australia to Auckland, Christchurch, Dunedin, Queenstown and Wellington.

The monthly traffic update from Auckland Airport since February shows that arrivals from Australia are stable at 872,000 for the year in February.

The aviation consultant Irene King said that the reduction in Virgin's services reflects a general downturn in the aviation industry, compounded by rising fuel prices.

"The golden age of big profits for airlines has changed," said King.

Virgin Australia's 737-800 have eight business class seats. Business and premium leisure customers are a key market for Virgin.

VIRGIN AUSTRALIA

Virgin Australia's 737-800 have eight business class seats. Business and premium leisure customers are a key market for Virgin.

In May Hong Kong Airlines stopped flying between Hong Kong and Auckland and in February Air Asia X stopped flying from Auckland to Kuala Lumpur via the Gold Coast.

Tourism was "significantly softening" and fuel prices were expected to continue to rise, he said.

"With this combination, airlines must really start to face their costs."

Virgin was not as well equipped as competitors Air New Zealand and Qantas and a slowing Australian economy and more Australians on vacation at home would have influenced the airline, he said.

"Virgin has less money in the kitten to really endure some of the cyclical recessions."

As a result, all airlines have had to face headwinds and change their networks, withdrawing services and reigning on costs.

"You'll see the airlines that retreat everywhere in Australasia."

Virgin also felt the blow of having cheaper aircraft than its competitors on the Tasman, he said.

Air New Zealand operates the modern A321neo on the Tasman, which carries up to 214 passengers, 48 ​​more than the 737 of Virgin. They are also cheaper to fly.

Air New Zealand's new A321neo aircraft are expected to offer fuel savings and efficiencies of around 15%.

CHRIS SKELTON / STUFF

Air New Zealand's new A321neo aircraft are expected to offer fuel savings and efficiencies of around 15%.

Virgin Australia ordered 48 Boeing 737 MAX planes but postponed delivery from November to 2021 in the wake of persistent uncertainty about the malfunctioning aircraft type and while the airline tries to improve its financial position.

Shortly after Air New Zealand moved away from its codeshare agreement with Virgin Australia, the manager of the Virgin Australia group, Rob Sharp, told the Center for Aviation (Capa) that the end of codeshare would lead to a drop in competition in Nuova Zealand.

This was due to the fact that Qantas and Air New Zealand – the two main airlines that supplied New Zealand – would be subject to mutual code sharing on the internal market in the area of ​​the agreement.

He said that Virgin would be the "challenger brand" in New Zealand, with the goal of attracting luxury and business travelers.

A major focus was the increasing frequency in Auckland from the east coast of Australia, he said.

Budget airline Tiger, a subsidiary of Virgin Australia, was an option to take to New Zealand, he said at the time.

"It is not too far along the track an option for us to be able to bring Tiger to the market."

Sharp said that at the moment Virgin Australia will undergo a "network shake up" in New Zealand, including the addition of two new routes: Dunedin and Queenstown.

Virgin's changes come not long after Air New Zealand made radical changes to its business following a January earnings downgrade for the 2019 financial year from $ 425 million to $ 525 million to a revised forecast of $ 340m to $ 400m.

After a three-month review, he announced a series of changes to his operations, including the postponement of $ 750 million in capital expenditures for aircraft and $ 50 million in deferred expenses elsewhere.

At the same time, Air New Zealand announced that it would start flying from Auckland to Seoul and increase the frequency on Taipei and Chicago routes during the high season.

On Monday the chief executive of Air New Zealand, Christopher Luxon, told the staff that the executive team had voluntarily frozen their salaries for at least the next 12 months, as the company seeks to reduce the overall costs by approximately 5%.

The increase in the price of fuel would involve about $ 200 million in additional costs for Air New Zealand this year compared to last year and it was expected to continue in the next year, he said.

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