Residents of Norfolk Island look set to regain their air links to New Zealand from June, when privately-held Norfolk Island Airlines plans to start flights to Auckland using a leased Boeing 737-300 from Nauru Airlines.
The island will lose the only nonstop flight to New Zealand from May 21, when Air New Zealand stops flying to Australian territory located about 900nm east of Sydney in the Pacific Ocean.
However, flights will be restored from June 17, when Norfolk Island Airlines starts a once weekly service operating via a Auckland-Norfolk Island-Brisbane and return routing on Saturdays.
The airline’s founder Gregg Prechelt says New Zealand represents about 20 per cent of the Norfolk Island economy so having nonstop air services was crucial for not just passenger traffic but also freight.
He is also hoping to arrest a decline in tourist numbers to the island, which has fallen from 40,000 to 26,000 in recent years.
“Norfolk Island is a strong package holiday destination,” Prechelt told Australian Aviation in an interview.
“Probably 80 per cent of the passenger numbers travelling to the island are holiday traffic.
“We believe we can regrow the market and give a resurgence to the economy.”
Under the charter agreement with Nauru Airlines will supply the pilots and cabin crew and manage all the ground handling, as well as aviation and regulatory services.
Further, the flights will carry the Nauru Airlines ON code and operate under the airline’s air operator’s certificate (AOC),
“We are in essence a marketing carrier,” Prechelt said. “You can’t get a designator without an AOC.”
Ticket sales commenced on April 13. Norfolk Island Airlines previously operated some freighter services between the island and Australia, again with leased Nauru Airlines 737s.
In December 2016, Air New Zealand cited declining passenger demand was behind its decision to drop the nonstop flights from Auckland.
The Star Alliance member is maintaining flights to Norfolk Island from Brisbane (once weekly) and Sydney (twice weekly) operated by Airbus A320 equipment. The airline is paid a subsidy by Australia’s Department of Infrastructure and Regional Development to operate those services.
“The Auckland-Norfolk Island route is not commercially sustainable so it makes sense to focus our operations out of Australia, where there’s good potential,” Air New Zealand general manager for networks Richard Thomson said in December.
In January 2016, the federal government said Air New Zealand had been selected as the preferred provider of air services to Norfolk Island from the Australian mainland following the latest tender process.
Prechelt, a Norfolk Island local who splits his time between there and Brisbane, said he would keep a close eye on Air New Zealand’s pricing on Brisbane-Norfolk Island to ensure the subsidy is not used to push the newcomer off the route.
“Because we have a relationship with Nauru Airlines and we have a strong relationship with the package wholesalers in the industry here in Queensland we can compete effectively with Air New Zealand on the Brisbane to Norfolk run without the subsidy,” he said.
“But we will be watching the subsidy very closely to make sure that the subsidy doesn’t in effect subsidise anti-competitive behaviour in fares.
“We acknowledge that Air New Zealand is an extremely professional organisation but it is an underlying concern that it will be easier for them to reduce fares or maintain discount fares for longer than they have in the past because the government will always pay them.”
Further, he hoped Norfolk Island Airlines’s arrival on the Brisbane route would encourage the Australian Government to end the subsidy scheme when the current contract expires to save taxpayers’ money.
“The Commonwealth has said that the reason they are spending the taxpayers’ money is that no one will fly there,” Prechelt said.
“Because we are in the market – and we are quite happy to do the Sydney route as well without the subsidy – it will be difficult for the Commonwealth to turn around and say it wants to continue a contract when someone is flying there.
“We’ve said to the Australian Government for many years that we can do the service without the necessity for a subsidy but they have had a preference to use Air New Zealand.”
Prechelt said the Nauru Airlines 737-300 would be configured to carry 113 passengers across business, premium (extra legroom economy seats with the middle seat free) and economy. All fares include at least one checked bag.
He said the 737-300 was the ideal aircraft for the route, given its had fewer seats than Air New Zealand’s 168-seat A320s.
“The only reason Air New Zealand pulled out of the Norfolk Island market from New Zealand was the aeroplane is too big,” Prechelt said.
“The size of the Norfolk Island market supports the 737 operation very profitably.”
Should growth expectations be met, Prechelt said a second weekly flight on Tuesdays for the peak season starting either at the end of September or at the end of March 2018 was on the cards.
Norfolk Island was formerly a self-governing Australian territory, with locally elected representatives managing its local affairs.
However, in 2015 Canberra brought in sweeping changes that resulted in reduced autonomy, with the Legislative Assembly shut down and replaced by a regional council. Also, New South Wales provides some state level services.