Coronavirus Update: New Zealand Airlines Dramatically Slashes Ticket Prices To Spur Demand

Customers in New Zealand on Monday quickly snapped up a special offer by Air New Zealand for 1,000 domestic airfare tickets at a rock-bottom price of 9 New Zealand dollars [about $5.60] each as a response to "softening domestic demand growth as a result of coronavirus.”

The heavily discounted tickets sold out within minutes.

Last week, Air New Zealand offered NZ$69 [$43] and NZ$79 [$49] fares to various cities in Australia. (Typically, air fares from New Zealand to Australia cost hundreds of dollars).

Air New Zealand also said its profits dropped by 32% last year and that it expects more weakness this year from the coronavirus as more people refuse to fly.

In mid-February Air New Zealand reduced or suspended its flights to both Hong Kong and Shanghai through at least the end of March.

Air New Zealand’s chief revenue officer Cam Wallace said the airline was committed to eventually restoring its Shanghai and Hong Kong services.

"We have… conveyed to officials in China our intention to resume services from April subject to the current travel restrictions being lifted and the appropriate medical advice from the New Zealand Ministry of Health and our own medical team," Wallace said.

The airline's route to Seoul, South Korea will be temporarily suspended from March 8 until June 30. On the whole, the airline’s Asian capacity will be reduced by 17% through June.

In another response to weakening demand, Air New Zealand has imposed a hiring freeze and encouraged some of its more than 12,500 employees to take leave.

“While the [coronavirus] situation is dynamic, we have taken immediate steps to mitigate the impact of softer demand and I am confident that we have the ability to manage the expected short-term impacts effectively,” said Air New Zealand Chairman Dame Therese Walsh.

Andrew Curran wrote on SimplyFlying: “You might think airline traffic across the Tasman Sea [the body of water separating New Zealand and Australia] relatively immune from the impact of coronavirus. Not so. Besides a general downturn in passenger numbers, Air New Zealand usually carries a lot of Chinese travelers on routes between New Zealand and Australia. Now they have empty seats.”

Air New Zealand Chief Executive Officer Greg Foran said despite the current troubles the airline will rebound.

“Our business is resilient, and we have demonstrated the ability time and again to respond quickly to changing market conditions,” he said. “We have a highly capable and experienced senior leadership team who have dealt with challenges such as this before and I am confident that we will effectively navigate our way through this.”

Meanwhile, on Monday, New Zealand Director-General of Health Ashley Bloomfield said there were two more people in the country with symptoms which might be consistent with coronavirus.

However, New Zealand has recorded only one confirmed infection thus far -- that patient is stable and improving.

Prime Minister Jacinda Ardern said New Zealand has extended travel restrictions for Iran and China. Also, anyone arriving from northern Italy and South Korea will have to self-quarantine for 14 days.

"We know self-isolation works," Ardern said.

New Zealand slapped a travel ban on foreign citizens travelling from mainland China on Feb. 2.