Air NZ to unveil new express service
From Nine MSN
Air NZ to unveil new express service
Air New Zealand is unveiling its new express-style trans-Tasman service on Tuesday.
Big cuts in ticket prices are coming, with the introductory lowest, most restricted fares expected to drop as low as $100, with normal base, one-way fares likely to be set between $150 and $200.
Taxes, security charges and departure levies will mean the consumer will pay more than that, but total travel costs are still expected to fall steeply.
Hot meals will go, along with free alcoholic drinks. The cheapest tickets will only be available if booked on the Internet and will not earn air points, or be able to be changed. As with the domestic express service, all fares will be based on one-way, not return tickets.
The new services are expected to begin in early October, when the airline's new fleet of Airbus A320 aircraft begin arriving. Air NZ says the planes are 15 per cent cheaper to operate than its existing planes on the route, mostly Boeing 767s.
While the public is likely to welcome the move, seen as a way of pre-empting cut-price fares about to be offered by soon-to-be rivals such as Virgin Blue, travel agents are unlikely to be so enthusiastic.
One way in which Air NZ will save money is by abolishing the payment of commissions on trans-Tasman tickets issued by agents.
They currently earn a 5 per cent commission for tickets booked to Australia, with 9 per cent earned on other international flights.
Air NZ will be hoping that the big cut in fares will convince travellers that it is worth foregoing the pleasures of food, drink and fare flexibility.
Its rivals on the Tasman, which now include airlines such as Emirates, which focus on the premium end of the market are likely to stress their levels of comfort and service.
How its biggest rival Qantas reacts will be watched closely, as it is trying to seek regulatory permission to buy a 22.5 per cent stake in Air NZ and integrate services operating to, from or within New Zealand.
Both airlines will next week present their case at a conference hosted by competition regulator the Commerce Commission.
The commission has already refused to give its blessing to the deal, saying in its draft decision that it would bring no benefit to the economy.
Air NZ will no doubt point to Tuesday's announcement of cheaper flights as evidence that the industry is highly competitive, with just the threat of a rival's entrance in a market enough to make it cut prices.
Air NZ shares closed unchanged at 49c.
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