AirNZ has been receiving a lot of attention over their domestic price changes the last few days.
The media seems to have been busy talking about the headline reductions and has missed a few points.
1) domestic lead in childrens fares are now adult fares - this is a price increase and will hit families on the popular routes. Could this play to their competitors advantage?
2) further reduction or el
imination of airpoints on domestic flights (eg drop from 19 to 16 points on fully flex Auckland - Wgn, elimination of flexisaver effectively drops airpoints on some booking classes). I guess the bosses are more interested in the price reduction on flexi fares than the staff members' airpoints.
3) Why is NZ dropping fares on routes it is the only player on? Is someone planning to compete? How many(/few) tickets will be offered at the new low rates?
4) What do you guys think about this quote from Fyfe? I realise he has incentives to promote NZ as the most stable airline which is there for the long term. Does it suggest the A319 or 73G would be a better plan for NZ domestic for one or more player?
Air NZ slashes domestic fares by up to 43 per cent - National - NZ Herald News
Mr Fyfe said.
"At the low end of the market fares are already rock bottom."
He considered the three-player domestic market relatively unstable.
"Two's company, three's a crowd. Certainly one of the competitors is finding it very challenging in the market at the moment when you look at their load factors.
"I guess it's kind of 'watch this space' at the moment."