Pacific Blue expansion to new NZ jobs

A report in NZ’s The Press says Christchurch will win more jobs when Pacific Blue starts a domestic airline that could cut fares by 10 per cent or more, with market insiders expecting low-cost carrier Pacific Blue’s new operation to keep its Christchurch base, including a head office that already has over 45 staff.

The bulk of the hundreds of extra aircraft and ground staff needed to operate a new national schedule are also likely to be based in Christchurch and Auckland.  Pacific Blue is training staff for the new operation in Christchurch, the training base for trans-Tasman operations.

The start-up, announced on Tuesday by Virgin Blue, has shaken Air New Zealand and Qantas, with Air New Zealand shares yesterday closing down 14c at 200c after losing 21c to 214c on Tuesday, slashing more than $368 million off the $2.1 billion capitalisation of the airline in two days, with the Government’s 80.4% stake substantially diminished in value.

Next Tuesday, the national airline will announce a new product, with one analyst said Air New Zealand could launch a budget airline, allowing it to employ “the right number of people at the right price”.

Pacific Blue aircraft are serviced by Christchurch-based Air New Zealand engineering staff under a long-term contract, with Branson having a penchant for a splashy launch of any venture, with his most recent visit to Christchurch seeing him and two female flight attendants upended in the Avon River from a punt.

Christchurch and Auckland are the two main crew bases and will remain so under a domestic operation rumoured to start within three months and certainly by the end of the year.

Jetstar  has a much smaller base in Christchurch, and has said it plans a New Zealand network, with one transport analyst saying given that Qantas had a struggling domestic operation in New Zealand, it would probably choose to go all or nothing with the Jetstar brand.  “What I think you’ll find is they replace the Qantas operation. You won’t have four players,” he said.

The entry of Virgin as a domestic operator could drive prices down by about 10% across the domestic network, he said, “Branson said he’d do it (launch) four months ago and no-one really took any notice and now he’s doing it.”

With a schedule between Christchurch and Auckland, Pacific Blue would be able to link its South Island passengers to its services to Tonga, Samoa and the Cook Islands, with Pacific Blue providing more than 100 flights a week between 12 destinations in New Zealand, Australia and the Pacific.

How far and frequently it will set up a domestic network away from the main-trunk destinations of Christchurch, Wellington and Auckland is a key question, and Air New Zealand would be preparing a strong response, another industry watcher said.

Air New Zealand was likely to try to ensure its customers stayed with them, increase the frequency of flights on some routes and increase low-cost fares.

Air New Zealand short-haul services chief Norm Thompson said the airline would announce its low-cost strategy on Tuesday, “We have a plan of our own.”  “Our job is to make sure we give our customers no reason to move,” he said.

Report by The Mole