Air New Zealand trims flights to offset fuel price shock
By Andrew Curran.
Air New Zealand will axe 1,100 flights between mid-March and early May 2026 in a bid to conserve fuel and cut costs. CEO Nikhil Ravishankar said no routes would get cut and that the airline would maintain regional connectivity. But he said there would be a reduction in frequencies, primarily focusing on the domestic network, equalling about 5% of all flights scheduled over the period.
“About 44,000 passengers will need to be re-accommodated,” Ravishankar told Radio New Zealand earlier today. “Almost all of them will be re-accommodated on the same day.”
The CEO said route and frequency consolidations were standard industry practice but acknowledged that, in this case, it was related to optimising fuel costs.
Earlier this week, Air New Zealand told the stock exchange that conflict in the Middle East was creating volatility in jet fuel markets. The airline said jet fuel prices, which were around USD85 to NZD90 per barrel before the conflict, had increased to between USD150 to USD200 per barrel.
Air New Zealand also said that it was suspending its earnings guidance and increasing air fares to offset the impact.
Flight cuts designed to have minimal impact
Ravishankar said the flight reductions would focus on off-peak times and reducing frequency “where there is frequency to be reduced.”
“Routes where we don’t have frequency to fall back on, we’ve maintained the frequency,” he said.
Air New Zealand flies to 20 airports within New Zealand. Around half enjoy high frequency services. In the case of the Auckland – Christchurch route, frequencies hit 17 flights per day each way. Other routes, such as Christchurch – Hokitika, only see up to two daily round-trips.
“Aviation matters to New Zealand more than most countries,” Ravishankar said. “We are a fairly large, sparsely populated country far away from everywhere else… We understand how important its is to have a strong Air New Zealand for our customers and that affordability is a real issue”
“Everything we are doing is with those lenses in mind. When I think about regional connectivity, I think about how important it is to maintain it."
Long haul ops quarantined to preserve capacity
The CEO says international services may also see some reductions, but Ravishankar does not want to make long-haul flying more difficult than it currently is.
“We don’t want to harm that level of capacity and connectivity,” he said. “People want to get to Europe still and over US airspace, we can get them there, and that’s what we're focused on doing. The trimming of long-haul will be negligible – three flights between now and the end of April.”
Ravishankar said the airline was not currently seeking government assistance.
“As far as this fuel price shock is concerned, we’ve got a few things within our control that we can manage,” he said.
A focus on cutting discretionary spending
Separate from the recent jet fuel price spike, Air New Zealand is working its way through a strategic review. The CEO said some ongoing cost cutting had been identified but “it was too early to tell” whether that included job losses.
“At the moment we are focused on some of the discretionary spend items and working with some of our suppliers to make sure we can manage discretionary spend,” he said.
Ravishankar said staff travelling to meet with suppliers was an example of discretionary spending, when often a phone call or Teams call could suffice.
He also said the airline would rely on its back catalogue of safety videos rather than spending money on producing a new one this year.
Photos: Air New Zealand.
Contact the writer: andrew@aerosouthpacific.com