Jetstar announces domestic NZ operations

[Pedota]

Here's what is being reported in today's Airline Transport World - my emphasis in bold.


Qantas shifts NZ flying to Jetstar as it continues restructuring


Qantas Group will restructure its New Zealand and China networks as it strives to remain profitable, and CEO Alan Joyce denied speculation that the moves are a portent of things to come on its Australian operations.

From June 10, Qantas flights on New Zealand domestic routes will be taken over by its low-cost subsidiary Jetstar Airways. In addition, the Australian national carrier will quit its Sydney-Beijing (on April 17) and Melbourne-Shanghai (March 31) flights, flagging the weakness in China's economy. The restructure comes two weeks after Qantas Group reported a 65% plunge in its half-year profit to A$216 million ($140.5 million) (ATWOnline, Feb. 5).

The New Zealand changes are seen by some as the start of a trend that will see Jetstar replace the mainline on an increasing number of routes. Centre for Asia Pacific Aviation CEO Derek Sadubin told ATWOnline that, "Without a doubt, Jetstar will take over more Qantas routes. We have already seen evidence of this recently with the Adelaide to Cairns route and you will also see Jetstar operating more regional short-haul international routes."

Joyce told this website yesterday that Jetstar will "grow aggressively but in harmony" with Qantas. He said the Australian and New Zealand operations are not comparable and denied any wholesale takeover of Qantas Australian domestic trunk routes by Jetstar. "Australia is very different and we are making money [on Qantas routes] even in current times. Certainly there will be some more tweaks," he said.

The restructuring also includes the retirement of QF's eight 130-seat 737-300s/-400s, which will reduce capacity by an additional 1%, according to Joyce. Qantas still will operate flights between Australia and New Zealand, occasionally in competition with Jetstar, and will upgrade to new 737-800s with seatback IFE throughout. Jetstar's New Zealand network will comprise Auckland, Christchurch, Wellington and Queenstown. Rotorua no longer will be served.

Late last year, Qantas announced a series of cuts that effectively grounded 10 aircraft (ATWOnline, Nov. 26, 2008). "Instead of growing international routes by 5% we are contracting by 8%," Joyce said.

A Jetstar spokesperson said yesterday that with costs 40% below QF's, the subsidiary is in better shape to respond to market demands for lower fares in difficult economic times.

by Geoffrey Thomas