Wirraway
17th Sep 2003, 01:34
Wed "Sydney Morning Herald"
Qantas fires up NZ fare war
By Steve Creedy
September 17, 2003
The battle for New Zealand's skies began in earnest yesterday as Qantas slashed and simplified trans-Tasman fares ahead of Virgin Blue's imminent launch of its new international service.
Virgin is expected to unveil its plans later this week as its first Pacific Blue plane lands in Christchurch. Chief executive Brett Godfrey said the international subsidiary would be based in New Zealand to allow it to compete more effectively.
He said New Zealand offered lower costs, and local staff would be more acceptable to the passenger base.
"Strategically, we see no other choice at this stage," Mr Godfrey told the national Aviation Press club in Sydney yesterday.
At the same time, Air New Zealand chief executive Ralph Norris predicted his airline's market share across the Tasman would drop to an historical low of 30 per cent as it battled new entrants such as Pacific Blue and Dubai-based Emirates.
Virgin will add to what Mr Norris described as "one of the most competitive airline markets in the world".
The airlines are ramping up operations after the rejection last week by the Australian competition watchdog of a proposed alliance between Qantas and Air NZ.
Qantas, which is expanding its low-cost New Zealand-based subsidiary Jet Connect, matched Air NZ's recent Tasman Express offerings with a range of low fares starting at $243 one-way.
The Australian airline removed minimum stays, Saturday night restrictions, seasonal surcharges and advance purchase conditions.
It also said it was starting operating all economy flights on domestic New Zealand routes from October 15, but stopped short of following Air NZ's no-frills domestic model.
Qantas executive general manager of sales and marketing John Borghetti said the reconfiguration of the airline's Boeing 737-300 fleet would lift capacity by about 8 per cent.
"In a highly competitive environment, and particularly on short-haul trips between Auckland, Wellington and Christchurch, there is not sufficient demand for business class," he said.
Mr Godfrey cited stiff competition from Jet Connect and Emirates as reasons for setting up Pacific Blue in New Zealand.
Virgin has been advertising in New Zealand for local staff and conducting roadshows in an attempt to reassure Australian unions that the NZ move would not cost local jobs.
The low-cost carrier also has an eye on legislative changes that would allow Australian and New Zealand carriers to fly in each other's markets without taking out another operator's certificate.
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Qantas fires up NZ fare war
By Steve Creedy
September 17, 2003
The battle for New Zealand's skies began in earnest yesterday as Qantas slashed and simplified trans-Tasman fares ahead of Virgin Blue's imminent launch of its new international service.
Virgin is expected to unveil its plans later this week as its first Pacific Blue plane lands in Christchurch. Chief executive Brett Godfrey said the international subsidiary would be based in New Zealand to allow it to compete more effectively.
He said New Zealand offered lower costs, and local staff would be more acceptable to the passenger base.
"Strategically, we see no other choice at this stage," Mr Godfrey told the national Aviation Press club in Sydney yesterday.
At the same time, Air New Zealand chief executive Ralph Norris predicted his airline's market share across the Tasman would drop to an historical low of 30 per cent as it battled new entrants such as Pacific Blue and Dubai-based Emirates.
Virgin will add to what Mr Norris described as "one of the most competitive airline markets in the world".
The airlines are ramping up operations after the rejection last week by the Australian competition watchdog of a proposed alliance between Qantas and Air NZ.
Qantas, which is expanding its low-cost New Zealand-based subsidiary Jet Connect, matched Air NZ's recent Tasman Express offerings with a range of low fares starting at $243 one-way.
The Australian airline removed minimum stays, Saturday night restrictions, seasonal surcharges and advance purchase conditions.
It also said it was starting operating all economy flights on domestic New Zealand routes from October 15, but stopped short of following Air NZ's no-frills domestic model.
Qantas executive general manager of sales and marketing John Borghetti said the reconfiguration of the airline's Boeing 737-300 fleet would lift capacity by about 8 per cent.
"In a highly competitive environment, and particularly on short-haul trips between Auckland, Wellington and Christchurch, there is not sufficient demand for business class," he said.
Mr Godfrey cited stiff competition from Jet Connect and Emirates as reasons for setting up Pacific Blue in New Zealand.
Virgin has been advertising in New Zealand for local staff and conducting roadshows in an attempt to reassure Australian unions that the NZ move would not cost local jobs.
The low-cost carrier also has an eye on legislative changes that would allow Australian and New Zealand carriers to fly in each other's markets without taking out another operator's certificate.
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