Air New Zealand Losing Big Money on Pacific Routes

According to TVNZ, Air New Zealand is losing big money on some of it’s Pacific Island routes.

From the article:

Air New Zealand has revealed it was heavily losing money on an air service between Los Angeles, Samoa and Tonga but while it was willing to continue the two governments pulled the plug on it.

The revelation came in a letter by Air New Zealand deputy CEO Norm Thompson obtained by the Samoan Observer today.

In the letter to customers, Mr Thompson said in the five years the airline operated the Boeing 767 once a week service, it lost more than WST$20 million ($5.2 million).

He said yields had declined with the cost of jet fuel continuing to rise and this week once again hitting US$100 a barrel.

“Combined with the global financial crisis, Air New Zealand has as a result exited several unprofitable or break-even routes during this time,” Mr Thompson said.

Source.