Air New Zealand Losses $100 Million In China

Air New Zealand
An Air New Zealand airplane taking off. (Photo: Wikimedia Commons/JazzNZ)

Christopher Luxon, chief executive of Air New Zealand, said that the company lost $100 million in its 13 years of operation in China. The executive claims that their loss is due to the imbalance in the competition with government-affiliated airlines in the regulatory environment-stacked Chinese market.

Mr. Luxon said at the 2019 China Business Summit in Auckland that China sees aviation as tools of the state and they compete with large-scale state-backed businesses that can make losses flying to New Zealand. He added that the asymmetric competition means that Chinese airlines have unfettered access to New Zealand, but we don't have the same access to China.

The comments of the executive were given during his speech at the seventh China Business Summit that was organized by NZ INC and the Auckland Business Chamber. Don Braid, Mainfreight managing director, and Cruce Cameron, Zespri chair, joined him at the summit. The three business leaders shared their experiences as they face major problems while operating in China.

Mr. Luxon said that it has been very difficult to do business with China. The business leader urged government aid in negotiations with China overflight issues in Shanghai. The leader also called on the government to loosen transit visa requirements so it was easy for Chinese visitors coming through New Zealand.

He, however, acknowledged that the problem encountered by Air New Zealand and other NZ companies that operate in China is not purely political. He said that New Zealand companies do a lot of "wittering and whinging" about why they aren't successful in the Chinese market because of their naivety. He added that companies need to deal with it and walk through it.

According to Mr. Braid, the political and business relationship between China and New Zealand were "tenuous and difficult at the best of times" but it was critical for the Prime Minister and key ministers to put maximum effort into the relationship.

Prime Minister Jacinda Ardern said that the New Zealand-Chinese relationship is in good shape. She added that politically they are in close touch; economically they are doing great things together; their people-to-people links are growing day by day. She also said that the relationship was important for both New Zealand and China and it would be defined by their differences.

The two-way trade relationship between the two nations recently reached 430 billion. Investors in China generally spoke positive relationship with China and they expressed their desire to continue to invest and innovate despite the challenges that they have faced before reaching stability.

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