Air New Zealand is getting eaten alive by Qantas to New York

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Last year we did an analysis of Qantas’s decision to reroute its New York flights through Auckland, replacing their historic Los Angeles-New York tag-on flight. The analysis highlighted how Auckland serves as a better hub than Los Angeles for Qantas, generating more one-stop city pairs while simultaneously improving the transit experience.

How much of a hub is Auckland to Qantas?

Early data showed Qantas enjoying relatively early success with strong load factors. Interestingly, data also shows that a growing majority of passengers weren’t originating at Sydney, rather originating or connecting at Auckland.

Furthermore, Qantas’s success was having a meaningful impact on Air New Zealand’s performance on the Auckland-New York route with load factors weakening significantly after Qantas’s entry. We’ve since written on Air New Zealand’s long haul fleet challenges, raising serious questions regarding the allocation of scarce capacity on such a long and relatively underperforming route.

Just how bad is Air New Zealand's long haul aircraft shortage?

Why revisit now?

Why is now a good time to check in on Auckland-New York? Are 10 months of additional data that much more interesting?

We were provoked by recent comments from Scott Zeglin, Qantas’s Head of Commercial Strategy and Performance that Qantas intended to maintain the one-stop Auckland-New York route alongside the non-stop Project Sunrise flight from Sydney (presumably) to New York that’s due to begin in 2027.

In the depth of his comments, Zeglin noted that “Auckland has worked well as a hub”, which reinforces the argument we made last year that it generates strong network opportunities given Qantas and Jetstar 6 Australian and 4 New Zealand points that feed into Auckland.

Even then, the performance must be really good from a network perspective for Qantas to want to maintain the flight once non-stop services to New York begin in 2027, so let’s reassess the data.

How has the last 10 months evolved?

In the 10 months ending January 2025, Qantas and Air New Zealand averaged load factors of 84% and 65%, respectively, between Auckland and New York (both directions). While Qantas’s load factor was consistently higher than Air New Zealand’s, this doesn’t tell the whole story as the gap between the two has grown over time.

Even more concerning is the growth in Qantas’s capacity with the load factors of 90% and 87% in December and January having been generated on capacity increases resulting from an increase in frequency on the route, now operated 5x/week. In these months, Qantas carried 73% more passengers than the same months a year earlier, while Air New Zealand carried 14% fewer (10% fewer over the last 12 months).

The secret to Qantas’s success has been contribution of connecting traffic from other points in Australia and New Zealand, in addition to Auckland originating traffic. This is evident from the marginal contribution of Sydney originating traffic to the growth in passengers numbers on the route. This is most notable in the last two months as the additional capacity was almost exclusively taken up by non-Sydney originating traffic.

In December and January, only 33% of traffic originated in Sydney, compared to 39% and 44% a year ago. This clearly highlights why Qantas would be interested in maintaining the route once Sydney-New York goes non-stop in 2027.

The only question will be whether the route originates in Sydney or in another Australian city instead. This would introduce a competitive advantage by offering same plane service from either Brisbane or Melbourne to New York.

The confounder in this is how the non-stop Sydney-New York flight will likely cannibalise some traffic, for example, it’s not a given that Melbourne or Brisbane-New York traffic might choose to connect via Sydney rather than Auckland, however given the significantly easier connection facilities in Auckland there’s a clear advantage for non-Sydney traffic choosing Auckland.

A further caveat is that while Sydney-Auckland-New York operates 5x/week, this is likely to be reduced following the introduction of the non-stop Sydney-New York routing, likely operating alternate days to a 3x or 4x weekly non-stop service.

But where does this leave Air New Zealand? Clearly, their route performance has been poor and they’re probably hoping that their upcoming cabin refurbishment will lead to a more competitive performance, but this seems more hope than anything else.