Lower airfares from Air New Zealand's domestic Express Class have delivered multi-million dollar benefits to the New Zealand economy.
Significant increases in the number of passengers travelling on Air New Zealand's domestic network have seen regional economies benefiting by as much as $95 million.
Independent research carried out by the New Zealand Institute of Economic Research (NZIER), commissioned by Air New Zealand, looked at the additional economic impact the airline's lower domestic airfares have had on the New Zealand economy.
NZIER calculated that in its first 12 months, domestic Express Class boosted expenditure in the following regions as follows.
|Region||Additional economic benefit of domestic Express Class|
|Bay of Plenty||$5.6 million|
|Hawkes Bay||$11.4 million|
|Upper South Island||$21.1 million|
|Source: NZIER. Data for year to December 2003|
The results were announced today in Taupo at the annual New Zealand Tourism Conference by
Air New Zealand Group General Manager Marketing, Network and Sales, Norm Thompson.
Mr Thompson said the economic benefits have been significant and widespread.
"When we introduced Express Class across our domestic network our goal was to fly more people to more places more often through lower airfares. The resulting financial benefits for communities throughout New Zealand have been substantial.
"Reducing fares by an average of 20-25% and up to 50% has certainly produced the desired result."
NZIER's analysis considered the additional spending and economic benefits that the Express service induced, over and above the benefits that were already occurring prior to the introduction of the lower fares.
The study into the impact of domestic Express Class looked at the additional economic benefits taking into account the initial injection of expenditure by tourists in a region as well as the downstream flow-on effects of that injection on businesses and households in that region.
Passenger numbers have increased dramatically since Air New Zealand introduced Express Class across its domestic network in November 2002.
|Domestic network passenger increases by region|
|Region||Passenger numbers||Percentage increase|
|Bay of Plenty||10,065||22.2%|
|Upper South Island*||60,542||21.7%|
|Source: Air New Zealand Results compare Pre-Express figures Nov 01 - Oct 02 with Post-Express Nov 02 – Oct 03) *Nelson/Tasman/Marlborough/West Coast|
"As domestic Express Class continues to enjoy considerable growth, the ongoing benefits to New Zealand beyond this snapshot from NZIER are significant," said Mr Thompson.
"And with the new Airpoints Dollars programme commencing in November, I'm sure New Zealand businesses can look forward to even more people travelling domestically more often.
"It certainly puts into context the net positive impact Air New Zealand is having on the bottom line of this country's economy and tourism industry."
Note: The regional benefits statistics for domestic Express Class cannot be totalled to create one national figure. This is due to the fact that, for example, when someone from Wellington flies to Auckland and spends $500 during a weekend away in Auckland, they are not spending money in their home town during that time.
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