Air New Zeland

AIR NEWZALAND: CHALLENGES AND OPPORTUNITIES

Air New Zealand's story began in April 1940 when its forerunner airline, Tasman Empire Airways Limited (TEAL) was incorporated. “TEAL began its first trans-Tasman services with flying boats, and over the years steadily expanded the size and scope of its operations and the extent of its international network”. (Air New Zealand Annual Shareholder, 2011). It was privatized in December 1988 and over the next 12 years, this company was held by different private and institutional shareholders, including other airlines.

In 2001 the Air New Zealand was affected by the events of 11 September 2001 and the government saved the airline from total collapse. The following three years the company had a positive transformation and from being almost bankrupted company, it became a success airline company.

In the last decade, the airline industry has change a lot; the freedom to fly to any country was an obstacle, if the government of both countries did not have an agreement. The “open skies” agreement opened the gap and allowed creating strategic alliances to develop markets jointly. These alliances in a globalized world offer many benefits to the members, especiallyin the airline industry that has been hit for the economic crisis and the aggressive entry of new competitors. Thus, to this company being one of the earliest members of the Star alliance allowed customers to include better loyalty program advantages, a better spread of schedules, better connections to onward flights and the retention of low fares.

Since 2001 Air New Zealand under new management, applied new strategies to promote the company, achieve cost saving and revenue improvements. The company decided to focus on the local market (domestic services). As an example of this, the company launched the Express Class for its domestic operations, offering cheaper domestic fares up to 50 %. In addition, the company was sponsor of many events in that country such as rugby’s National Championship, Fashion week, Wine Awards and so on. With these strategies, the company found an enormous opportunity to recover the brand being present in all the important events in this country, positioning the firm in the local market as preferred by kiwis.

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