SWOT analysis of Air New Zealand
This is a detailed SWOT analysis of Air New Zealand. It aims to examine the strengths and the weakness of Air New Zealand. It also aims to examine the opportunities the airline should explore and the threats it should keep an eye on.
Strengths of Air New Zealand
Air New Zealand is a world-class airline based in Auckland. It is the flag carrier of New Zealand. It flies to Australia, the South West Pacific, Asia, North America, South America and the United Kingdom (Air New Zealand Limited, 2021). By providing services to over 17 million passengers a year, Air New Zealand becomes the most dominant and respected airline in New Zealand.
Air New Zealand is listed on both the New Zealand Stock Exchange (NZX) and the Australian Stock Exchange (ASX). It is a member of the Star Alliance network. In addition, it also has partnerships and code share agreements with a number of selected airlines such as Cathay Pacific, Virgin Australia, Air China, Singapore Airlines, Aerolíneas Argentinas, Aircalin, Fiji Airways and others that have enabled the airline to provide its customers with more flight options and benefits around the world. Air New Zealand also provides an excellent level of on-board services.
Air New Zealand has 114 aircrafts which are from Airbus, Boeing, Bombardier, and Aerospatiale (Air New Zealand Limited, 2021). It has received a number of awards over the years. For example, Airline of the Year (AirlineRatings.com), Australasia’s leading airline (World Travel Awards), Best Premium Economy Class (Trip Advisor Travelers’ Choice Award), Top Airline in the World (Condé Nast Traveler Readers’ Choice Awards), and New Zealand’s most reputable company (AMR NZ Corporate Reputation Index) to name but a few awards the airline received in the past.
Weaknesses of Air New Zealand
Weakness is the second element to address in the SWOT analysis of Air New Zealand. One of the major weaknesses of Air New Zealand is its limited global reach. While the airline’s presence in the domestic market is extensive, its global reach is limited. Likewise, its brand awareness compared to its competitors is limited as well.
In 2019, Air New Zealand was forced to cancel a number of of international flights due to problems with some Rolls-Royce engines on its Boeing 787-9 Dreamliners. Thousands of passengers were affected by this resulting in fear and dissatisfaction.
A number of controversies have affected Air New Zealand over the years. For example, the airline’s recent ‘world’s coolest safety video’ which was filmed in Antarctica, have angered many people as they consider the video insensitive to the victims of NZ901. NZ901 was an Antarctica sightseeing flight that slammed into Mount Erebus in Antarctica on 28 November 1979 killing all the 237 passengers and 10 crew members. Air New Zealand was accused of trying to hide its faults and obstruct the investigation (Matthew, 2018). Although a long time has passed, the new video has sparked raw emotions among many Kiwis who may or may not have lost their loved ones in NZ901 disaster.
Opportunities for Air New Zealand
As mentioned above, Air New Zealand has a limited global reach. Therefore, introducing new routes to its network is worth exploring. This will increase the airline’s competitiveness compared to its competitors. Likewise, strategic alliance with other airlines to share flights, in-flight offerings, lounge access, and frequent flyer program should offer further growth opportunities to the airline. It is worth mentioning that increasing flight frequencies in some popular routes may turn out to be useful as well.
Threats to Air New Zealand
Threat is the last element in the SWOT analysis of Air New Zealand. Last few years witnessed a number of international airlines adding new services to New Zealand. This has already affected the profitability of Air New Zealand. Qantas, American Airlines, Qatar Airways, Jetstar, and Pacific Blue are putting a lot pressure on Air New Zealand’s domestic yields. Similarly, any major changes in the macro-environmental factors in Air New Zealand’s existing destinations may present serious threats to the airline.
Legal challenges and fines may turn out to be costly as well. For instance, Air New Zealand was fined $40,000 in 2020 for breaching Stock Exchange (NZX) rules as it was found to have disclosed sensitive information to investors (Radio New Zealand, 2021). It was also fined $16.3 million by an Australian court in 2018 for its part in a global price-fixing cartel that took place between 2002 and 2007.
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Last update: 18 January 2021
Air New Zealand Limited (2021) About Air New Zealand Limited, available at: https://www.airnewzealand.co.uk/corporate-profile (Accessed 18 January 2021)
Matthew (2018) Controversial Air New Zealand Safety video angers many, available at: https://liveandletsfly.boardingarea.com/2018/03/02/air-new-zealand-antarctica-safety-video/ (Accessed 07 July 2018)
Radio New Zealand (2021) Air New Zealand censured and fined $40k for breaching NZX disclosure rules, available at: https://www.rnz.co.nz/news/business/433131/air-new-zealand-censured-and-fined-40k-for-breaching-nzx-disclosure-rules (accessed 18 January 2021)
Photo credit: Pixabay
Author: Joe David
Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.