Air New Zealand chief executive Nikhil Ravishankar. Photo \/ Annaleise Shortland<\/p>\n
\u201cThe way that the supply constraint\u2019s being handled is through price,\u201d Ravishankar said.<\/p>\n
\u201cPrice will then naturally lead to demand impacts, but we\u2019re not seeing necessarily [fuel] supply lines fraying.\u201d<\/p>\n
With jet fuel prices effectively doubling since end of February, Ravishankar said the airline faced a \u201ccomplicated\u201d return to normal but assured there was minimal risk to supply for the foreseeable future.<\/p>\n
However, the crisis should prompt the Government, fuel suppliers and users to consider what New Zealand needed to mitigate similar price shocks, he said.<\/p>\n
\u201cI remind a lot of our stakeholders that air travel demand is elastic, and there\u2019s only so much our customers can absorb as far as these price increases are concerned.\u201d<\/p>\n
Ravishankar said the airline had started experiencing pushback from domestic customers on its pricing, but demand for transtasman and long-haul services remained strong.<\/p>\n
Operating the new 787s between Auckland and New York would help lower costs and boost fuel efficiency on the ultra long-haul route, which has lagged in recent years amid aircraft shortages, maintenance delays and Qantas\u2019 successful bid to run competing services.<\/p>\n
Originally due in May, the new 787s were on Boeing\u2019s assembly line but faced delays of two to three months, Ravishankar said.<\/p>\n
\u201cThose are mission-fit. They\u2019re being built for New York. And so we just need to get our hands on those aircraft.\u201d<\/p>\n
Having promoted Air NZ\u2019s new Skynest product<\/a> in New York last week, Ravishankar lauded the campaign\u2019s success, receiving about seven billion impressions in two days.<\/p>\n \u201cThat\u2019s the equivalent of a whole year\u2019s worth of marketing that we would do to promote not only Air New Zealand services, but New Zealand to the world.\u201d<\/p>\n Global fuel prices have surged amid a protracted conflict in the Middle East, with Iran\u2019s effective closure of the Strait of Hormuz \u2013 through which 20% of global fuel passes during peacetime \u2013 significantly disrupting global energy markets.<\/p>\n Less than two weeks into the war, Air NZ cancelled approximately 1100 flights between March 16 and May 3<\/a> in response to the increased prices, impacting 44,000 customers and reflecting a 5% drop in services.<\/p>\n It was followed by a second round of cuts in early April<\/a>, affecting a further 4% of flights and impacting services to regional hubs such as Nelson and Tauranga between May and June.<\/p>\nNikhil Ravishankar said he remained confident in Air New Zealand’s flagship Auckland-New York service despite direct competition from Qantas. Photo \/ Air New Zealand<\/p>\n