Wirraway
26th Feb 2004, 23:29
Fri "Sydney Morning Herald"
Air NZ prepares to strike in budget battle
By Scott Rochfort
February 27, 2004
The prospect of a drawn out and bloody trans-Tasman airfare war grew yesterday, with Air New Zealand signalling plans to dramatically upgrade the role of its budget offshoot Freedom Air in a bid to undermine and undercut Virgin offshoot Pacific Blue's designs on the NZ and South Pacific aviation markets.
Boasting that Freedom Air had 30 per cent lower operating costs than both Jetstar and Virgin Blue, Air NZ chief executive Ralph Norris said: "We're going to use Freedom in an expanded role and we will roll out more announcements on that."
Mr Norris, however, would not specify to what extent Air NZ would build up Freedom's existing fleet of existing four Boeing 737s, only saying that Freedom had been "given the mandate to extend this further to selected destinations within a five-hour range" of New Zealand.
Aside from Freedom already outlining plans to fly to Fiji from April in a bid to head off Pacific Blue, Mr Norris said the airline would gradually extend services across the South Pacific but denied any notion Freedom services could eventually replace any Air NZ services.
With Freedom already serving Sydney with flights from Dunedin, Hamilton and Palmerston North, there are suggestions Freedom could soon swing services onto main city routes.
Echoing Qantas chief Geoff Dixon's denials the low-cost Jetstar would complement rather than replace full services on Qantas's low-yielding routes across Australia, Mr Norris said: "We see that we can actually grow the market with Freedom."
With Qantas and Air NZ preparing to appeal the rejection of their proposed alliance by competition regulators in Australia and New Zealand, Mr Norris expressed newfound optimism the deal would go through.
"It's inevitable. If it doesn't get up this time, I'm sure it will get up next time," he said.
Air NZ, meanwhile, reiterated its full-year profit forecasts of a pre-tax $NZ220 million ($196 million), after reporting a 12 per cent increase in its half-year net profit to $NZ105 million, thanks in part to an improved New Zealand dollar.
Hinting the airline could soon apply to commence services to Shanghai in order to take advantage of the growing tourist market out of China, Mr Norris said Air NZ was considering whether it would replace its ageing fleet of nine 767-600s with long distance Airbus 330s, A340s or B777s.
With Air NZ due to hand out redundancy slips to 20 per cent of its 350 "middle management" employees in the next fortnight, Mr Norris said the airline was still on track to slash its cost base by $NZ245 million a year by 2007.
Air NZ shares fell 0.5c to 37.5c and Virgin fell 4c to $2.55, while Qantas fell 2c to $3.71 as the market digested Wednesday's announcement on Jetstar's route and fare structure.
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Pic: Freedom Air 737
http://www.jetphotos.net/viewphoto.php?id=1710
==========================================
Air NZ prepares to strike in budget battle
By Scott Rochfort
February 27, 2004
The prospect of a drawn out and bloody trans-Tasman airfare war grew yesterday, with Air New Zealand signalling plans to dramatically upgrade the role of its budget offshoot Freedom Air in a bid to undermine and undercut Virgin offshoot Pacific Blue's designs on the NZ and South Pacific aviation markets.
Boasting that Freedom Air had 30 per cent lower operating costs than both Jetstar and Virgin Blue, Air NZ chief executive Ralph Norris said: "We're going to use Freedom in an expanded role and we will roll out more announcements on that."
Mr Norris, however, would not specify to what extent Air NZ would build up Freedom's existing fleet of existing four Boeing 737s, only saying that Freedom had been "given the mandate to extend this further to selected destinations within a five-hour range" of New Zealand.
Aside from Freedom already outlining plans to fly to Fiji from April in a bid to head off Pacific Blue, Mr Norris said the airline would gradually extend services across the South Pacific but denied any notion Freedom services could eventually replace any Air NZ services.
With Freedom already serving Sydney with flights from Dunedin, Hamilton and Palmerston North, there are suggestions Freedom could soon swing services onto main city routes.
Echoing Qantas chief Geoff Dixon's denials the low-cost Jetstar would complement rather than replace full services on Qantas's low-yielding routes across Australia, Mr Norris said: "We see that we can actually grow the market with Freedom."
With Qantas and Air NZ preparing to appeal the rejection of their proposed alliance by competition regulators in Australia and New Zealand, Mr Norris expressed newfound optimism the deal would go through.
"It's inevitable. If it doesn't get up this time, I'm sure it will get up next time," he said.
Air NZ, meanwhile, reiterated its full-year profit forecasts of a pre-tax $NZ220 million ($196 million), after reporting a 12 per cent increase in its half-year net profit to $NZ105 million, thanks in part to an improved New Zealand dollar.
Hinting the airline could soon apply to commence services to Shanghai in order to take advantage of the growing tourist market out of China, Mr Norris said Air NZ was considering whether it would replace its ageing fleet of nine 767-600s with long distance Airbus 330s, A340s or B777s.
With Air NZ due to hand out redundancy slips to 20 per cent of its 350 "middle management" employees in the next fortnight, Mr Norris said the airline was still on track to slash its cost base by $NZ245 million a year by 2007.
Air NZ shares fell 0.5c to 37.5c and Virgin fell 4c to $2.55, while Qantas fell 2c to $3.71 as the market digested Wednesday's announcement on Jetstar's route and fare structure.
==========================================
Pic: Freedom Air 737
http://www.jetphotos.net/viewphoto.php?id=1710
==========================================