Pacific Blue faces tough competition
Pacific Blue will have to find a new way to take on the might of Air New Zealand if it is to enter the NZ domestic market.
A report in NZ’s Dominion Post says that John Bartlett, the CEO the Virgin Blue-owned carrier, told a business lunch in Wellington yesterday that taking on Air New Zealand was difficult because it was a “canny competitor”.
Mr Bartlett said, “Air New Zealand carried nearly all of the more than eight million domestic passengers a year and the country lacked the large population centres that a budget airline typically targeted.”
Pacific Blue’s success on the Tasman was the result of cutting fares and “growing the pie”.
“I don’t see any point in fighting, as Ansett New Zealand did, for a slice of the existing pie.” “Something has to be done differently.”
Air New Zealand had also forced regional airline Origin Pacific out of business by adopting its lower cost operating model, with Origin failing in September last year.
Christchurch-based Pacific Blue had a profitable foot in the door on the Tasman, Mr Bartlett said and that would provide a good base from which to consider a domestic expansion, though he would only reaffirm comments made by Virgin Blue’s owner, Sir Richard Branson, earlier this year that it was a question of “watching this space”.
“I don’t think they are idle words.”
“What I will say, however, is Pacific Blue has absolutely no plans not to do anything.”
Nelson was a market that could potentially sustain a jet service such as the fleet of Embraers regional jets Virgin Blue had ordered for use in Australia, Mr Bartlett said.
But a domestic operation would also have to compete on the main trunk routes.
“The model can work in lower population areas, it is just a question of what frequency and what kind of equipment.”
Virgin Blue flew profitably to a number of smaller centres in Australia.
Report by The Mole
John Alwyn-Jones
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