Qantas prepares for a killing at Air NZ's expense

By Graeme Kennedy

Friday 31st May 2002

Ralph Norris

Qantas is finalising plans for a major expansion of its New Zealand domestic operation with a full-service offering to compete against the new fewer-frills national carrier announced this week.

The Australian airline, in talks with the government here over buying a stake in Air New Zealand, is expected to bolster its Kiwi fleet.

Qantas plans to add two aircraft to its four Boeing 737 fleet to fly more often on the Auckland-Wellington-Christchurch trunk route and a possible extension to Dunedin.

A Qantas spokesman said the airline would continue to offer business class on domestic routes - a casualty of Air New Zealand's new lower-cost strategy first reported in The National Business Review several weeks ago.

Higher trunk frequencies and retention of the premium-class cabin are aimed at attracting a larger share of higher-yield business travellers as well as the carrier's strong loads of leisure passengers lured by fares which have generally been lower than Air New Zealand's.

Qantas will continue to serve provincial ports through its extensive code-share agreement with Nelson-based Origin Pacific Airlines.

But Air New Zealand chief executive Ralph Norris said the lower cost base to flow from the leaner airline would mean substantial fare reductions to be announced in July.

The carrier's new domestic service, to be known as Air New Zealand Express from October 27, will operate all-economy 737s with 136 seats compared with the current 122-seat economy-business class mix.

Meals and alcoholic drinks will go and will be replaced by a snack service offering tea, coffee and water.

Low-cost subsidiary Freedom Air will begin services from Auckland, Wellington and Christchurch from October 27 and a fifth Boeing 737 will be acquired to provide the additional capacity.

Meanwhile, Air New Zealand will increase capacity on some international short-haul routes to Fiji and across the Tasman and on some long-haul services to the US and Asia in November.

Cullen's windfall

Comments from our readers

No comments yet