Not quite FR at 1c a seat but good to see a move to freshen up the domestic market as well as keep on the front foot with the public and against a possible DJ entry into the market that Richard Branson hinted at this week in CHC.
The article goes on to note that Tasman and long-haul announcements later.
Quote: Air New Zealand has slashed the cost of its domestic airfares in a bid to stimulate demand.
The cheapest fares, lead in fares, on main trunk routes are falling by up to 23% but the airline denies that it is connected with falling fuel prices or the threat of increased competition.
Air New Zealand says its new domestic fares compare favourably with those charged in 1980.
Chief executive Rob Fyfe says the lead-in fare from Auckland to Christchurch was $92, against the $99 announced on Friday, 27 years later.
The new lead-in fare from Auckland to Wellington is now $89, down 23%. Auckland to Christchurch drops 18% to $99. And Christchurch to Wellington falls 15% to $79,
The biggest regional saving is the 26% drop between Nelson and Palmerston North.
Air New Zealand says the arrival of new aircraft has made cheaper fares possible.
"And this initiative is designed to stimulate more travel to fill the seats on those new aircraft," says Fyfe.
Lead-in fares apply to about a third of available seats, and the travel industry says it is great for consumers.
"We're delighted to see fares coming down, that's a great option," says John McGuinness of
Flight Centre Communications. "We're really pleased to see that and hopefully more New Zealanders will get to see a lot more of New Zealand.
But Air New Zealand denies that the discounts are driven by falling fuel prices and says the surcharge reduction by Qantas was purely symbolic.
"We're not trying to gamble and second guess...where oil is going to move. It could just as easily go up in the next six months," says Fyfe.
However travel agents believe the threat of increased domestic competition is a factor.
"Air New Zealand's obviously sending a very strong signal to it's competitors that the New Zealand market is a very competitive market," says McGuinness.
However, Air New Zealand has dismissed Virgin Group chairman Sir Richard Branson's comments this week about domestic competition. Branson said he expects to launch domestic air services in New Zealand "at some stage".
The government has signalled it is looking for a cornerstone shareholder in Air New Zealand and Branson also said he is open to the possibility that he might buy into the main rival of his Pacific Blue airline.
But Fyfe is not convinced Branson's ideas will materialise.
"I'm not holding my breath in terms of expectation for when any of his predictions will actually come to pass," Fyfe says.
Antskip From Australia, joined Jan 2006, 948 posts, RR: 6
Reply 10, posted (9 years 4 months 1 week 6 days 12 hours ago) and read 3067 times:
Quoting WorkFlyer (Reply 7): Funny how when Air NZ does something that is positive for the travelling public the usual suspects on here are not piping up. Is it because no negativity can be found in this news. It is great for the travelling public, comparatively flights have never been cheaper.
I agree entirely. Give NZ its due. They are cutting prices in a market with very little competition. Sounds like a good reason to complain. What would the response be if they increased prices instead ?
ZKSUJ From New Zealand, joined May 2004, 7233 posts, RR: 11
Reply 13, posted (9 years 4 months 1 week 5 days 19 hours ago) and read 2995 times:
Quoting Kiwiandrew (Reply 12): you obviously have forgotten what the fares were like before the revamp of the fare structure several years ago - you could easily have doubled those prices under the pre-'express' regime
Yea that is true, and I accept that it is better that what it used to be. However I was meaning in comparison to prices at the time of the revamp.
Noelg From , joined Dec 1969, posts, RR:
Reply 14, posted (9 years 4 months 1 week 5 days 18 hours ago) and read 2982 times:
Personally I have always found the domestic fares in NZ pretty reasonable - $80-$120 each way whenever I've flown on NZ between AKL, PMR, WLG and NSN. That's only about £30-40 each way including taxes, certainly cheaper than many domestic flights to the regions in the UK, and about the same as many flights to Europe on LCCs.
But any cut in price is a good one - as long as it doesn't involve a cut in NZ's excellent service on domestic flights.