New Zealand Budget airline plan floated

[romansandal]

A United States aviation specialist wants to start a new domestic airline by the end of the year.

New Zealand aviation insiders have cast serious doubt on the plan, however.

Patrick Weil said yesterday that Kiwijet would initially fly two Boeing 737-300 aircraft between Auckland, Christchurch, Dunedin and Invercargill.

A fare between Auckland and Christchurch would be a flat $150, regardless of when it was bought.

Kiwijet would use the same model as the original budget airline, Southwest Airlines in the United States, something Air New Zealand would not be able to counter, Mr Weil said.

He said he had US$20 million in financial backing from three unidentified private equity investors who wanted to buy Qantas' domestic operation, Jetconnect.

A decision to approach Qantas with the proposal would depend on whether private equity consortium Airline Partners Australia was successful in taking over the Australian national carrier.

"There are a lot of ifs, there is no doubt about it," Mr Weil said.

"But our investors are very keen on what is going on in New Zealand at the moment."

A New Zealand aviation insider said, however, that Mr Weil was a specialist in improving ground-handling services for aircraft, but he did not have experience running an airline.

Mr Weil claims to have been one of the original consultants for high-profile easyJet before that budget airline entered service in Europe in 1995.

He said he became interested in the New Zealand market after becoming involved in a potential rescue of Nelson regional airline Origin Pacific, which closed in August last year.

http://www.stuff.co.nz/4046110a13.html

[Wizofoz]

A fare between Auckland and Christchurch would be a flat $150, regardless of when it was bought.



Kiwijet would use the same model as the original budget airline, Southwest Airlines

These two statements flatly contradict each other.
Variable pricing, with the ability to offer prommotional fares, but get high yield from fares bought "Last Minute" is one of the corner stones of low cost carriers.

[NZFlyingKiwi]

Are they really expecting to be able to operate a 737-300 profitably to Invercargill? :hmm:

[PA31 pilot]

Invers has had it 15 minutes of fame with THE WORLDS FASTEST INDIAN. Does anyone even go there anymore?:ok:

[1279shp]

Mentioned in crew room today; Ewan Wilson is part of it; he of Kiwi Air Intl in NZHN in early - mid nineties. He's currently on the management team of OzJet and Norfolk Air in Norfolk Island. (As an aside, interestingly OzJet's toll-free number in Oz is 1800 737 000 - taking out the '1' prefix, its the same as Air NZ's!!)
Mentions of QF-NZ wanting a fix, PacBlue wanting in, OzJet wanting NZRO - Ozzie, all theorised upon today too.
:)

[Got the horn]

Ozjet involvement?Probable. They're keen to set up in NZ (no secret there) and can do so now with the TTMRA AOC legislatation (and to stick it to Airwork for taking the Toll freight deal from under their noses!)

Wouldn't be surprised if Airwork have some involvement, being a Part 121 operator already and having the 733 on their AOC already. Maybe a 733QC replacement for ZKNQC, run pax flights during daylight and Post at night (been there done that for Freedom early 2000's). Don't know if they've got any 733 rated crew based in NZ though.

Let's see what this rumour network comes up with!

[pakeha-boy]

If it has to do with a bloke named

Bill Franke......ex America West CEO

MY ADVICE:,......IF YOU THINK SHARKS ARE DANGEROUS THINK AGAIN

WE DO NOT NEED ANOTHER FRANK LORENZO IN NEW ZEALAND!!!!!:mad:

[Dodgy Boy]

Has this guy really done his market research? While it's great that someone is willing to invest in the NZ Airline Industry, the fact remains that the country has only has a small population base and is therefore unlikely to generate the turnover necessary to keep it going. Add to that the fact that most of Air NZ's profit come from domestic operations, the likely outcome will be they will go all out to put them out of business. Having said that I wish him all the best of luck!

[haughtney1]

Origin Pacific.....

Kiwi International......

CityJet......

[fly real fast]

Ansett NZ.....

Qantas Nz....

[1279shp]

website www.kiwijet.net is actual site for airline.

From another thread I just opened, Dave Collier - ex GM Pax services for Origin Pacific - owns the site domain. :O

[Sqwark2000]

I would have thought that Air NZ was already a bit of a LCC model in the domestic network, the only major difference is that Air NZ still trains it's employees.

So if Air NZ wants to start a subsidary under the pretense of being a LCC outfit, will this mean they want typed / self funded tech crew, is this a NZ version of Qantas' Jetstar? Go LCC internally under a different branding, but keep the well recognised full service International airline going to fly the Koru?? Wasn't this the sort of thing Freedom was created for? look where that is now.

What benefit is there to starting a new airline to compete with yourself?? (prior to Kiwijet's introduction) As above, will it lead to reducing T&C's by channeling new employees via the new LCC model ( ala Jetstar)

Do they think the punters will happily give the new LCC their reddies thinking they are giving Air NZ the finger when ultimately their money will still flow to Air NZ's bottom line???

Interesting to see how this pans out.... if at all

S2K

[squire]

We the public like competition............Hurrah:D

[muttly's pigeon]

We the public like competition

yeap, but we the public dont like it when the company they paid to travel with goes under..... especially when every industry insider said it would happen from day one.

[slamer.]

New low-cost airline chances slim, say analysts





Airline industry analysts are sceptical about the chances of a new low-cost airline starting up here after a United States-based aviation investor this week announced plans to set up a rival domestic airline called KiwiJet.
Air New Zealand investors were unfazed yesterday and the company's shares rose to a fresh high of $2.85 on news it was also considering launching a low-cost carrier.
Staff were told in a memo leaked to the media that a low-cost carrier was one of three or four growth initiatives being considered by the company as part of a strategic review.
Forsyth Barr aviation analyst Rob Mercer said he believed Air NZ could successfully run a low-cost brand alongside existing services and grow the market.
The key was to ensure it did not cannibalise the lucrative business market where passengers paid for full-price tickets at peak travel times.
Any secondary service would have to be run at non-peak times and target the leisure market.
Mercer saw little chance of success for a new entrant such as KiwiJet taking Air NZ on head-to-head on its main route

Air NZ had a lot of capacity and the ability to match cheap fares without taking any serious hit to its revenue. "It's a difficult market to compete in," Mercer said.
But Jason Bloom, a Sydney-based analyst for Deutsche Bank, said he thought the market here was too small for Air NZ to run a low-cost carrier as well as its own brand.
"Their domestic operation is pretty much a low-cost carrier anyway. Meals have gone and they've even taken the biscuit off," he said. "Whacking on a couple of 737s and rebranding them isn't going to save them a lot of money."
The airline had a major strategic review under way and had to look at all these things but was unlikely to proceed with the plan.
If KiwiJet did get off the ground, Air NZ could just take them on head on and compete on price.
"It would be tough for a new entrant to make money in," Bloom said.
"They would react to ensure they didn't lose market share. They've always done that."
Bloom said the leak of the staff memo would not have done the airline any harm in terms of unsettling any potential competition.
In Australia, when budget airline Tiger announced plans to enter the market, Virgin announced quickly it was looking at a secondary low-cost brand.
Florida-based aviation investor Patrick Weil said on Wednesday he had $27 million backing to set up a low-cost carrier here.
He has since told the Southland Times he wanted to buy the local arm of Qantas but a lot depended on the outcome of the takeover bid for that airline.

[squire]

We the public are willing to invest in companies that challenge the status quo.

[Kiwiguy]

I spoke with Ewan earlier this year. OZJET only have an AOC for the 737-200 at present and just two aircraft operating in Australia.
The routes proposed are however are not too different from what Ewan would suggest. It's not about leaks from Air NZ. Why would a new commer take on routes where both Qantas and Air NZ operate?
It's simple logic.

I recall during 2002 when jetconnect tried to pick up the pieces of failed Tasman Pacific (aka Qantas NZ) Air NZ slammed Freedom Air onto domestic routes but in the end only scored an own goal. The Air NZ budget product offered inconvenient times, but overall just skimmed the yield off it's parent's services.

[TARTAN]

Kiwiguy you wrote: I spoke with Ewan earlier this year. OZJET only have an AOC for the 737-200 at present and just two aircraft operating in Australia.

Your slightly out of date there. Ozjet have four in Australia with another due to arrive fairly soon.

[Kiwiguy]

Granted I may be out of date. They were gearing up to provide a service for Norfolk Air with a third aircraft. They had two in Ozjet markings back then, with one configured with J class seating and another all Y class seating.

Care to share what you know about further additions out of curiousity ?

They do of course draw aircraft from EAAC. When Ozjet took a dive back in April 2006 they repatriated several aircraft back to the UK.

Anyhow on the issue of Kiwijet, they're looking for 737-300s and want to gain their own AOC if you follow what they've been saying.