|Quoting gasman (Reply 72):|
Loser" is perhaps too strong a word, but I believe NZ to be a bit more vulnerable than the larger carriers with their greater economies of scale, route networks and customer bases who can afford to enter a market like New Zealand when fuel prices are low, create some havoc in the market and if it doesn't really work suck up a price bottoming loss for a while before disappearing again.
But those customer bases are key to it, as I said.
I think it would be pretty stupid for American - or Qantas (international)- to come in thinking they can survive just by stealing from Air NZ
and I remember that Qantas failed on AKL
before. The only difference now is lower fuel, but that works for Air NZ
as well, as Mr. Luxon has just said, in another context.
American has an enormous customer base - tens of millions - in the US, and the route is of value to them if they can bring enough of that customer base to NZ
. If they can't, then it's slim pickings.
|Quoting gasman (Reply 72):|
Precisely why I think a rapid influx of new carriers and services driven by low fuel prices will ultimately not be good for NZ. That finite market is NZs lifeblood.
It's the NZ
market that is finite, not the US market. The only thing finite there may the number of people who want to come to NZ
, but the limits of that have never been explored.
And sure, Air NZ
may be in for a rough patch while it all sorts itself out, but that's the nature of competition, and no other airline has the home team advantage.
|Quoting ZKSUJ (Reply 73):|
Yup but would it be fair to say (IMO) that in the past NZ has been ahead of the competition in terms of service levels & in some respects the hard product that was to come, where as now they are not. (Just an opinion)
The move around the world is to lower service standards - unless you pay for it - which is why Virgin Australia's metamorphosis from Virgin Blue is such an outlier.
If there is any real threat, then in my mind it's Air Asia X, a genuine ULCC. But that's one route 1 x daily. It's a very popular leisure route and it's difficult to see much market stimulation through lower fares, it may already be stimulated. But in that case, Air NZ
isn't the only target - it affects Jetstar and Virgin Australia as well. And again, it is Air Asia X who has failed in NZ
I'm not looking at this through rose-coloured glasses, Air NZ
may yet prove to be competitively incompetent, although I strongly doubt it. I'm just looking at the way airlines are coping with the changed times, and how the majors have reacted to LCC's and and are reacting to ULCC"s.
Southwest Airlines for example, "invaded" many hubs of the US majors, yet it didn't steal much traffic, it created its own market through lower fares. It has a name - it's called "the Southwest Effect."
[Edited 2016-01-26 13:35:22]