16th February 2009, 10:58 AM
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Join Date: Nov 2008
Posts: 467
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Jetstar To Announce NZ Domestic Services
Looks like QF and JQ will operate side by side in the NZ domestic market, very similar to here in Australia...
Quote:
Australia's Jetstar is tipped to announce plans within days to enter the New Zealand domestic airline market, sparking an all-out price war on the main trunk route.
Travel industry insiders expect the budget airline to reinstate some of the off-peak services between Auckland, Wellington and Christchurch that were abandoned by its parent airline, Qantas, last month.
"It would be a fairly safe bet that they will go main trunk," an industry executive said.
The move would mean four airlines - Air New Zealand, Qantas, Pacific Blue and Jetstar - would fly the main trunk route between Auckland and Christchurch.
While the cheapest fares may not reduce significantly, there would be more of them, an analyst said.
Jetstar's staff costs are significantly lower than Qantas' and well below Air New Zealand's, giving it an instant price advantage.
Qantas flies between the main centres, as well as Queenstown and Rotorua, but has struggled with high costs and old planes.
Jetstar was tight-lipped about details of its impending announcement.
But chief executive Bruce Buchanan has repeatedly said the domestic services were high on the agenda, with a link between the airline's Christchurch and Auckland bases a "highly likely option".
The airline has begun a recruitment drive for up to 250 pilots, cabin crew and ground staff in two waves.
Qantas is expected to continue its early morning and evening business flights across the Tasman in the short term, but within two years the "flying kangaroo" brand could disappear from New Zealand and possibly even the Tasman.
"The whole issue about the Qantas brand domestically in New Zealand must have question marks beside it," a leading analyst said.
Air New Zealand is expected to vigorously defend its turf, with the help of its 80 percent domination of the business market and monopoly on the regional network.
While a price war would dent Air New Zealand's profits, the real head-to-head battle is likely to be between Jetstar and Christchurch-based budget rival Pacific Blue.
The worsening world economic climate has increased competition between budget airlines, with business travellers more inclined to swap leg room and in-flight frills for cheaper seats.
The airlines hope that cheaper fares will also encourage more people to fly for leisure, not just for business.
It is understood the Qantas fleet of eight New Zealand-based trans-Tasman and domestic Boeing 737-300s and -400s is due to be replaced with new and bigger 168-seat 737-800s from May.
Jetstar will add a third 177-seat A320 to its New Zealand-based fleet in April for the new Auckland trans-Tasman services to Sydney and the Gold Coast.
The fleet could grow to six by about the middle of this year, Buchanan said last month.
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