Air New Zealand ready for competition………
A report in The Dominion Post in NZ says that Pacific Blue and Qantas are likely to be the main combatants in the three-way battle on the domestic network, according to Air New Zealand chief executive Rob Fyfe, with Pacific Blue announcing it will start flying between the three main centres from November 15.
When the Christchurch-based budget airline’s parent, Virgin Blue, started in Australia seven years ago, the view was that the market could not sustain three airlines, Mr Fyfe said.
Qantas was always going to be a survivor. The question was who would survive between Virgin Blue and Ansett Australia.
“If Australia couldn’t long-term sustain three airlines, it is going to be interesting to see just how the market unfolds here in New Zealand,” Mr Fyfe said.
“Clearly the question is going to be how are Qantas and Pacific Blue going to position themselves relative to each other.”
Air New Zealand was prepared for the arrival of competition on the regional routes, where the airline had a monopoly, Mr Fyfe said. “I suspect you could see some competition move on to some regional routes. We have already adjusted our regional fares and we are always conscious of competition.” Air New Zealand reduced its lowest fares by up to 26 per cent early this year.
Virgin Blue chief executive Brett Godfrey said that though yields appeared to be too high on some regional routes, the airline was unlikely to put any of its new Embraer regional jets into New Zealand in the next two years.
Mr Fyfe said Qantas could respond to Pacific Blue’s entry by adding some regional services to its existing main trunk network using Bombardier turboprops, similar to Air New Zealand’s Q300.
However, Air New Zealand had a fleet of about 60 regional aircraft.
“So for anyone to mount a substantive challenge to Air New Zealand on a long-term basis … then you have got to put a lot of capacity into this market. And I would be very surprised if there is a big enough prize here to motivate anyone to want to do that,” Mr Fyfe said.
Macquarie investment director Arthur Lim said history suggested that Pacific Blue would cut fares on the main trunk below cost to build market share, backed by a financially strong parent.
Air New Zealand would respond to preserve as much of its dominant position as possible, but Qantas could bow out of the domestic race, Mr Lim said.
Ultimately, the domestic market share could settle down with Air New Zealand keeping about 75 per cent and Pacific Blue 25 per cent over about two years.
“That is probably a market share that Virgin Blue can live with because Virgin Blue coming in green will have a lower cost structure than Air New Zealand.”
Report by The Mole
John Alwyn-Jones
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
TAP Air Portugal to operate 29 flights due to strike on December 11
Qatar Airways offers flexible payment options for European travellers
Airlines suspend Madagascar services following unrest and army revolt
Air Mauritius reduces frequencies to Europe and Asia for the holiday season
Major rail disruptions around and in Berlin until early 2026