could be NZ's low cost response to JQ ? Not to compete with NZ.
You would probably be already aware that NZ runs like domestic option like an LCC and has done since 2002? With fares that already at low cost airline levels, you couldn't get much lower than they already are.
For example in the middle of April on AKL-NPE (1hour prop flight)
NZ $49 Seat Only
JQ $49 Seat Only
Creating an LCC would create an whole new cost that would need to be covered, and if not end up costing more than the mainline flights. Why complicate things when its working pretty well and NZ is making major profits? The only difference between NZ/JQ product short-haul is NZ give you an free cookie and coffee, and JQ will charge you for it.