We don’t lose to Aussies at home: Air NZ

Air New Zealand’s move to offer up to two million domestic fares under $NZ100 ($A90.95) and boost domestic capacity eight per cent this year will provide a regional economic boom, travel agents say.

The national carrier made a pre-emptive strike against rival Jetstar on Wednesday with the announcement of the cheaper air fares on domestic routes, while announcing a record earnings result, although it had earlier started cutting lead-in fares by 11-to-40 per cent on some routes ahead of Jetstar’s announcement next month of which five regional destinations it will fly to from December.

Palmerston North and New Plymouth are hot picks.

Air New Zealand has said it won’t be undercut in its home market and chief executive Christopher Luxon said it was confident it could continue to sell the extra capacity profitably.

“We are confident of our ability to stimulate the economy to fill those seats. We don’t lose to Australians at home,” he said.

Flight Centre general manager corporate Simon McKerney said consumers can expect a full-on battle to emerge which will be positive for them because until now Air New Zealand has been able to make a lot of money from its near monopoly in the regions.

“They are protecting their patch,” he said.

“They’re reacting to the competition and front-footing it to get the loyalty of customers with cheaper pricing.”

House of Travel commercial director Brent Thomas said the increased competition would grow the overall number of people travelling, including tourists brought in by Jetstar parent Qantas Airways and others.

“It’s not just domestic flights. Air New Zealand has had $NZ99 one-way flights and lower to Australia so from the international point of view, those numbers will also grow. It will benefit those customers planning to travel and increases those travelling.”

Mr Thomas said there was double digit growth on the main trunk routes when Jetstar first came into the New Zealand market and he expected similar increase on the regional routes.

Flight Centre’s Mr McKerney said he expected a regional boom in the destinations Jetstar chooses to fly to.

“If you’re a corporate with a sales team flying into somewhere like Palmerston North and you can get two people there for the price of one then were you’re going to increase their travel more frequently and that’s going to have a commercial spin-off for companies in those regions.”

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