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Air NZ to grow Asia capacity

Air New Zealand (Air NZ) will increase its network capacity by 6% during the 2015 fiscal year, with a large amount of that destined for the growing Asia market.

In an investor presentation, the airline says that it is targeting to increase its capacity to Asia by 8%, excluding the impact of its exits from the Auckland-Osaka and Hong Kong-London routes.

Chief executive Christopher Luxon highlighted that a large part of that will come from its return to the Singapore route, as part of an alliance with Singapore Airlines that will deliver it immediate benefits.

“That’s a good deal for us from day one,” he says. “We’re not going through the normal curve that we would on new routes of deep loss making before we become profitable.”

Further improvements on routes to China and Japan will come with the introduction of the Boeing 787-9s on its services to Shanghai and Tokyo in November.

Luxon says that the 787s will help improve the yield mix particularly on the Shanghai route.

“The challenge that we’ve had in China is that we’re flying the 767 into China and the cabin mix is obviously not what it is in a 777-200 or a 787 configuration, so there is a real opportunity for us to do better at the front end of the aircraft going into China, as well as receiving the operating efficiencies of a new aircraft.”

Asia aside, the airline says that it will increase capacity on routes to North America and Europe by 7%, domestically by 5% and 3% on Tasman and Pacific routes.

Air NZ’s pre-tax profit for the year ended 30 June rose 40% NZ$357 million ($298 million), driven largely by yield improvements in its longhaul operations.

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