wirraway
Posts: 1294
Joined: Sun Mar 25, 2001 4:32 am

Virgin Threatens 40% Price Cut To NZ

Thu Aug 07, 2003 1:38 pm

Thurs "Sydney Morning Herald"

Virgin threatens 40% price cut to NZ
Scott Rochfort
August 7, 2003

The looming trans-Tasman airfare war could turn into a bloodbath, after Virgin Blue's chief executive, Brett Godfrey, yesterday threatened to slash fares by more than 40 per cent.

With Air New Zealand aiming to cut costs by more than 20 per cent through its no frills, yet-to-be launched Tasman Express, and Emirates recently cutting fares on some of its introductory flights to Auckland by 20 per cent, Mr Godfrey said Virgin could slash fares further and still turn a tidy profit.

"I don't believe [the Tasman] route needs to be unprofitable. It's one of Australia's largest routes and it's New Zealand's largest. Don't forget Tasman Express is dual class," he said.

"You won't get the same cost base for dual-class aircraft compared to a one-class aircraft."

With Virgin barred from using the Virgin Blue name outside Australia, it is understood it will be called Pacific Blue.

With Virgin Blue reapplying for landing slots in New Zealand last week, Mr Godfrey said he supported the proposed $550 million alliance between Qantas and Air New Zealand if Qantas "moved in Air New Zealand's terminals", freeing terminals for Pacific Blue.

At the opening of Virgin's Blue Room lounge in Sydney yesterday, Mr Godfrey took a swipe at Qantas's three-year $1 billion cost-cutting program.

"We've got Qantas going on about their cost base . . . [but] they give away food, they have business class, they are members of a very expensive global alliance," he said.

Virgin was upgrading its product offering by launching nine business class-sized "Blue Zone" seats on each of its Boeing 737s, at an extra cost of $30. Mr Godfrey said the airline would maintain its low-cost "mantra" by offering the extra services to passengers on a user-pays basis, with the Blue Room charging a $5 entry fee, and a "pub price" of $5 for a stubby of Victoria Bitter.

He said "registered corporate accounts" had increased from 2 per cent to 20 per cent of the airline's passengers in three years.

Meanwhile, the director general of the International Air Transport Association, Giovanni Bisignani, said the "attitude" of competition regulators and bilateral "open skies" agreements between countries and national ownership rules, were "the three pillars of stagnation" in global aviation. Mr Bisignani, who represents the interests of 277 member airlines, told a National Aviation Press Club lunch yesterday: "The proposed Qantas-Air New Zealand alliance is a clear example of what needs to happen throughout the industry."

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StarFlyer
Posts: 929
Joined: Thu Sep 12, 2002 10:07 am

RE: Virgin Threatens 40% Price Cut To NZ

Fri Aug 08, 2003 1:08 pm

I really like the way things are going at Virgin Blue. In my opinion they are taking the right steps by charging for lounge access and "business class". I would definitely pay that extra of 30$ for more room. Anybody been on any of these seats? Does Virgin Blue have a FFP as well?

The transtasman route is still fairly expensive considering all the competition! Even Air New Zealands supposedly "low cost" carrier Freedom Air is only a few bucks cheaper than flying mainline Air NZ, where I would be receiving lounge access, miles etc.

Time for a real low cost carrier to enter the market. Particularly on Pacific routes ex AKL this is desirable, as flights to Islands such as Rarotonga, Fiji, Tonga, Samoa are about twice as much as transtasman. Flight time is about the same, maybe 30 minutes more to some destinations. This cant be right. Air NZs monopoly on the AKL-RAR run especially should be broken up by letting a competitor like Virgin Blue in.
Yours truly - StarFlyer
 
Air Taiwan
Posts: 1498
Joined: Fri Dec 03, 1999 3:06 pm

RE: Virgin Threatens 40% Price Cut To NZ

Fri Aug 08, 2003 3:17 pm

I'd rather pay a bit more to fly QF/NZ and feel that my safety is at good hands. Also I don't like feeling like flying in a longhaul bus (exactly what flying DJ feels)

Jimmy
 
Ikarus
Posts: 3391
Joined: Mon Jan 08, 2001 10:18 pm

RE: Virgin Threatens 40% Price Cut To NZ

Fri Aug 08, 2003 6:22 pm

I'd rather pay a bit more to fly QF/NZ and feel that my safety is at good hands.

Well, your feelings, I am sure, are absolutely removed from reality. You're in good hands no matter who you fly with.
 
Marara
Posts: 634
Joined: Fri Oct 19, 2001 11:29 pm

RE: Virgin Threatens 40% Price Cut To NZ

Fri Aug 08, 2003 10:58 pm

As far as i know the 'Blue Zone' are just seats in emergency exit rows
I like work: it fascinates me. I can sit and look at it for hours. Jerome K Jerome
 
DoorsToManual
Posts: 1453
Joined: Sat Apr 19, 2003 12:28 am

RE: Virgin Threatens 40% Price Cut To NZ

Fri Aug 08, 2003 11:20 pm

Also I don't like feeling like flying in a longhaul bus

I doubt a different paint job on the outside would do anything to change those feelings....flying economy class on any airline for extended periods of time is exactly like being on a long haul bus, no matter the airline.
 
DoorsToManual
Posts: 1453
Joined: Sat Apr 19, 2003 12:28 am

RE: Virgin Threatens 40% Price Cut To NZ

Wed Aug 13, 2003 7:34 am

Interestingly, now that ANZ's Tasman Express operation has released seats for sale, the lowest available fare SYD-AKL-SYD is still a couple of $ more than the absolute lowest fare available on the route, which is provided by Lan Chile.

According to Expedia UK, this stands at 175 pounds sterling, or AUD 427 (NZ$ 477).

Even so, the fares are quite a bit cheaper than Qantas's lowest e-deals on the same route.

Can't wait to see what VB's fares will be....
 
StarFlyer
Posts: 929
Joined: Thu Sep 12, 2002 10:07 am

RE: Virgin Threatens 40% Price Cut To NZ

Wed Aug 13, 2003 7:49 am

Btw, why is the fact that DJ are lowering prices by upt o 40% a threat???  Confused
I would welcome lower prices on the route, especially since I am rather disappointed at NZ's newly released trans tasman fares.
Yours truly - StarFlyer

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