Air NZ Announcements and Ffye comment
 

AirNZ has been receiving a lot of attention over their domestic price changes the last few days.

The media seems to have been busy talking about the headline reductions and has missed a few points.

1) domestic lead in childrens fares are now adult fares - this is a price increase and will hit families on the popular routes. Could this play to their competitors advantage?

2) further reduction or el:{imination of airpoints on domestic flights (eg drop from 19 to 16 points on fully flex Auckland - Wgn, elimination of flexisaver effectively drops airpoints on some booking classes). I guess the bosses are more interested in the price reduction on flexi fares than the staff members' airpoints.

3) Why is NZ dropping fares on routes it is the only player on? Is someone planning to compete? How many(/few) tickets will be offered at the new low rates?

4) What do you guys think about this quote from Fyfe? I realise he has incentives to promote NZ as the most stable airline which is there for the long term. Does it suggest the A319 or 73G would be a better plan for NZ domestic for one or more player?

Air NZ slashes domestic fares by up to 43 per cent - National - NZ Herald News

PB is on deaths edge on Domestic. They have a mere 10 flights a day throughout NZ in total so mabye they can offset the losses? Obviously they heavily rely on domestic connections to their International network.

A review of Air NZ's annual report shows the domestic jets are suffering to the tune of $23M. Quite easy for the CEO of the government airline to throw stones knowing full well the National led government cannot afford for the airline to fail - the on flow consequences to an already fragile economy with record deficit would be disastrous.

The lowering of fares on regional is an attempt to secure the market and prevent a new player (PB or JQ) to compete on the government run monopoly.

A quick check of the AirNZ website for flights tomorrow (19 Oct):

CHC-AKL return NZD118 (equates to 8c/ASK) versus CHC-HLZ return NZD614 (equates to 46c/ASK). Figures are rough - any Accountants reading happy to accept corrections. Nonetheless hardly discounted, and still the area that is sustaining the rest of the Air NZ business model.

Thanks for the replies.

Of Pac Blues NZ domestic flights how many would be repositioning flights and/or done for utilisation purposes?

Their timetable has some unexpected timings which suggest that it may be determined by other constraints. For example the ChCh -Wgn flights are both in the mornings and the returns moring or miday which limits their appeal to business travellers.

Cheers

To answer question 4, Air NZ is going for the 737-800. It is going to replace the entire fleet, both the 737-300 and the A320.

It is a easier aircraft to turn in places like Norfolk and Nuie where they dont have the equipment to accept baggage tins. The 737 sits a lot lower than the A320.
And no doubt Boeing is offer a rather sweet deal on them due to the delayed 787.
Will make sense to have the same aircraft across the fleet, in situations where there has been large delays due to a aircraft being U/S and having to wait for a aircraft to return from across the pacific. This way they can pull one from a domestic route and cut the delay times.

And it burns less fuel than the -300 while carrying around 50 more pax at a higher speed! Well worth the initial CapEx I would think.

B733 fleet replacement Decision to be announced by Air NZ management by year's end as far as we're told... Personally I hope it goes to Boeing with the 738 :ok:

I wonder if they'll kit them out with IFE on seatback like the B767/A320 fleet?

While I can't comment on the original thread I can speak to the fleet replacement. From all the information I have heard it is heading towards the 320. Either way they will be ordering 30ish aircraft as the current 320s will not make it till 2025 which at this stage looks like the most realistic time for a narrow body replacement.
Whichever they do get I know it will be a domestic spec. No IFE, no business class, no winglets (if NG) and probably not ETOPS maintained.

My sources seem to think they are leaning towards the A320 side.
The current A320 have just had all that money spent on AVOD in them, so they wont be going anywhere soon!

At the end of the day its going to come down to who can offer NZ the best price.

lilflyboy262: You are aware that the A320 already do the AKL-NLK-AKL, they usually run one of the two weekly flights.

For other places NZ could make NZ provide handling equipment for free.

Surely as a minimum they would have to maintain a 50/50 split of configurations. if it is going to be a 1 type fleet to cover domestic and Trans-tas/PacIslands, then I doubt very much they would withdraw services such as Business class, IFE etc. That'd be very backwards and very un-AirNZ-like . Maintaining the fleet to a stand config would provide greater flexibility for unsched maintenance etc.

I recall seeing a recent interview with BG of Virgin Blue which hinted at Pac Blue getting IFE for trans Tasman - this could put pressure on NZ to have IFE on domestic.

Also having an all Y Domestic with IFE would suit putting these planes onto price sensitive leisure orientated Trans-Tasman routes such as Wgn/ChCh - OOL/BNE where the lower cost would be desirable when up against J* or Pac Blue.

Sqwark, yeah I guess I didn't make that clear. The immediate 733 replacement (around 15 aircraft) will be domestic spec, when they roll over the 320 (around 13 aircraft) in about 8 years time, with whichever one they go for, then those will be like for like ie. IFE, ETOPS, business etc.

@ Cavemanzk, Yes I am aware of that. I work for AirNZ

I have also personally spoken to the cheif pilot of AirNZ, Dave Morgan, as he left to go test fly the 737-800's.

BelowMDA, they will not strip back to flying a bare basic aircraft. It is what sets AirNZ apart from the rest of the Trans-Tasman carriers (With the exception of EK)

Qantas has opted for the full personal IFE, winglets etc to try and compete with AirNZ. Why would we take a step back?

Why didn't Air NZ get the 700/800 when they had they chance, instead buying the last of the classics. Now they wait 10+yrs after the NG is been around and finally decide its a good thing! Opportunity missed if you ask me.

NG was logical, transition course for classic guys, Boeing fleet, NG/777/787 all similar and shortened courses.

Maybe now is the time to go A319/A320/A350.

Obviously the best "deal" at the time.

On Guard they got the 300 I guess because they would have been much cheaper than the new NGs and given the choice they would go for brand new 300s right now. The classic is the most economical machine for running up and down the country, but they are getting older and need to be replaced.

flyboy262 they aren't taking a step back. whatever flies domestic will be domestic spec, whatever flies the Tasman will have business IFE etc. There is just no point (at this stage) in hauling IFE and winglets up and down the country, it just burns more gas.

word on the street is PB going with 73-700s for domestic ops replacing the 800s just pure speculation though.

cheers

I heard they only had 2 months before they were going to go bust......2 years ago.

Couple of spare EJets on the way for VB. Could they be painted in PB colours to operate internally within NZ. It could be a similar setup to whats going on in WA. All about feeding the main hub with the right number of seats.
The PB wet lease deal would be helping out the bro's in NZ. DPS has become a nice little earner for the group.
In the mean time Air NZ finds out this is about to happen and drops the prices in advance. No doubt someone at the regulator would be happy to keep the home team with the advantage and give them the heads up.
Interesting times ahead.

Wirgin: The biggest drop on the prices, was on the routes that PB and J* do not operate on.