Cut-throat price war on Tasman air routes

[Gerald A]

Some Air New Zealand fares across the Tasman will drop by an average of 15 per cent as cut-throat competition on the route heats up.

Internet fares will drop by more than $100 on Air NZ flights from the middle of next month.

Pacific Blue, soon to begin new services from Auckland to Sydney and Melbourne, said yesterday that it "would probably" drop its fares even further in response.



http://www.nzherald.co.nz/section/1/story.cfm?c_id=1&objectid=10530836

[Michael Morrison]

Interesting.... I think Air NZ are the ones who stand to loose the most.

If you look at their annual reports from the year just gone, they both roughly made the same profit - however NZ had nearly $1B more revenue (so less margin).

Given Trans Tasman is much more of NZ's network, a 15% reduction on some fares will certainly make a dent in their results I would presume.... Some of the regional routes like DUN-SYD etc haven't yet seen the fare decrease... I wonder how long it is before DJ attempt some of those routes.