Jetstar adds 6th NZ domestic route, bolsters trans-Tasman flights

Thursday 30th July 2015

Jetstar, the low-cost offshoot of Australian owned Qantas Airways, will add a sixth domestic route with a new Wellington/Dunedin schedule and bolster its trans-Tasman flights as it looks to win passengers from dominant rival Air New Zealand.

The Wellington/Dunedin route will begin in October and see the airline fly between the capital and Otago's largest city three times a week, Jetstar said in a statement. It will also add capacity to its trans-Tasman routes over the Christmas period, with extra Christchurch and Queenstown flights from Australia and Monday services between Auckland, Melbourne and Sydney.

In June, the discount airline said it planned to expand into at least four regional destinations which are still to be determined from flying the main trunk routes. It’s likely to cherry-pick the most profitable deals with local airport companies.

Last November, Air NZ announced it would abandon seven regional routes, saying they were costing the company up to $1 million a month, in favour of boosting capacity to other regional airports by buying 13 aircraft for $300 million. That lead to a consumer backlash as it ended operating services to three of its smaller unprofitable destinations, Kaitaia, Whakatane, and Westport, from April. Jetstar has said it has no plans to fly those routes either.

Domestic routes between the major centres, such as Auckland, Wellington and Christchurch, are often discounted, but the New Zealand Airports Association says regions are right to question whether provincial routes are generating excessive profits. In August, the association called on the Commerce Commission to regulate the airline's regional fares, where the national carrier has an effective monopoly, after it announced a 45 percent uplift in annual profit to $262 million, its third consecutive year of earnings growth.

Air NZ shares fell 0.4 percent to $2.64, having touched a seven month low of $2.389 earlier in the month when Jetstar first announced its domestic route plans.

BusinessDesk.co.nz

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