Jetstar Cancels New Zealand Flights

Jetstar is trimming some of its New Zealand flights due to the latest spike in jet fuel prices, rendering certain routes uneconomical in the short term.

For the moment, the airline has reaffirmed its stance that the cuts are temporary; however, they will still affect a meaningful slice of the trans-Tasman corridor and New Zealand’s domestic network, impacting many, including those travelling through Auckland, Christchurch, and beyond.

Why is Jetstar Cutting Some Flights?

The immediate trigger for Jetstar’s essentially forced decision to cut down on flights to New Zealand is the surge in jet fuel prices linked to the outbreak and sustained conflict in the Middle East.

Whether it has been airliens calling the Middle East home or those as far away as Oceania, the surge in prices is having a direct impact on many companies, with changes being made to flight schedules to cope, and, at times, cost increases in flights with fresh surcharges.

Jetstar, despite the adjustments, is attempting to retain many of its services to specific cities, albeit at reduced rates, meaning that those impacted have been contracted by the business, with alternative arrangements provided to minimise the changes.

The broader issue, however, which is felt industry-wide if this continues, is that low-cost airlines are much more sensitive to fuel shocks because they operate on thin margins, face intense competition, and utilise their aircraft at higher rates.

When fuel rises sharply, as it has done, an airline has many ways it can combat this; however, in almost every sense, these low-cost airlines, which pride themselves on affordable fares, will try not to pass that down to customers, as that erodes the point of their business models and existence.

However, with so much uncertainty about the developing situation in the Middle East, especially its duration, it is hard for all types of airlines to plan, whether regarding capacity or service pricing.

What Is Changing At The Airline

Reports indicate that Jetstar will see around 12% of its scheduled services affected by the adjustments, including some domestic routes. such as from Auckland through to Wellington and Christchurch, but isn’t limited to just domestic, as international services are also affected.

The cuts are targeted; they are therefore not a specific rate from the market itself. Jetstar understands the strong importance New Zealand has on a day-to-day basis; however, its performance is equally important and must be maintained where possible in times of such uncertainty.

Despite the minimal changes attempted, there are still changes to the network, as seen with United Airlines, which is cancelling 5% of its flights in the coming months to cope with global volatility, trimming its less profitable routes amid weaker demand.

Jetstar intends, where possible, to limit knock-on effects, especially for passengers who rely heavily on lower-cost options to travel from Oceania airports and need the Australian carrier to maintain a steady frequency.

Other Struggles In The Region

Jetstar isn’t alone; its big brother, Qantas, has also been forced to respond differently, leaning more on pricing than on outright cuts, at least for the moment.

The Australian flag carrier confirmed it would raise international fares due to rising jet fuel prices, which are affecting its bottom line. The total increase depends on the route the airline is operating.

All this comes as demand to destinations like Europe has been sustained despite volatility in the Middle East affecting airspace and forcing adjustments to routing, such as the popular Perth-to-London service, which now operates via Singapore on the outbound journey.

Meanwhile, closer to the source of Jetstar’s adjustments at Air New Zealand, there’s been a confirmed reduction of over 1,000 flights over a multi-week period, affecting 40,000 passengers.

These flight cancellations also followed the decision to suspend guidance, a matter of days after publishing a revised guidance outlook, due to fuel volatility and its impact on earnings and position for the remainder of the year.