ANZ mulling low-cost domestic carrier

[Pieter C. 5]

Air New Zealand Mulling Low-Cost Domestic Carrier

 

May 4, 2007

Air New Zealand is considering launching a low-cost carrier to counter a proposal from an investment group for a no-frills domestic airline.

 

In a memo seen by Reuters news agency, Nathan Agnew, general manager strategy at the airline, said the idea was one of a number of proposals it was considering.

 

"The initiatives we are considering are wide ranging -- everything from whether we should have a low-cost carrier operating alongside Air New Zealand in New Zealand," the memo said.

 

A spokeswoman for the airline declined to comment further.

 

US aviation investor Patrick Weil is leading a group that plans to launch a low-cost domestic carrier, called KiwiJet, next year. Weil has said he had USD$20 million in backing for the planned airline.

 

The airline has limited domestic competition, with Australian carrier Qantas only operating limited routes. Local commuter airline Origin Pacific was wound up last August, with debts of millions of dollars.

 

Air NZ itself was saved from collapse in 2002 by a NZD$885 million (USD$650 million) government rescue package. after the collapse of its Australian operation Ansett. As a result, it made domestic services mostly no frills scrapping meals and magazines.

 

In January Air NZ cut fares by up to 26 percent, banking on an increase in passengers to offset any impact on profit margins.

 

The airline reported a 61 percent rise in profit for the six months to December to NZD$74 million (USD$54 million), and said it would pay a NZD$105 million (USD$77 million) special dividend.

 

(Reuters)

 

[S V Choong 4]

Air NZ already has a low cost subsidiary operating years ago when it was still a full fledge carrier. The name of the LCC is Freedomair. In recent years, Air NZ had herself became more or less like a no-frills LCC, leaving Freedomair as an LCC flying to secondary destinations in Australia and the Pacific Islands. Don't really know whether it is necessary at all to create another LCC than focusing on their current business plan.

[Raj 0]

Air NZ already has a low cost subsidiary operating years ago when it was still a full fledge carrier. The name of the LCC is Freedomair. In recent years, Air NZ had herself became more or less like a no-frills LCC, leaving Freedomair as an LCC flying to secondary destinations in Australia and the Pacific Islands. Don't really know whether it is necessary at all to create another LCC than focusing on their current business plan.

 

Yeap, I agree with you SV.

Air NZ doesn't really need an LCC. Air New Zealand Link, Air Nelson and MT.Cook Airlines seem more to be like an LCC. Fares are quite cheap on them.

However, i would think that there isn't really a market for LCC in New Zealand. Hardly anyone flies. People prefer to Drive and enjoy the scenery.

Edited May 5, 2007 by Raj

[Richard A 0]

What's the point? Air NZ domestic services are already no-frills!

 

Also it won't be long before JQ replaces QF on domestic NZL ops.

[S V Choong 4]

Also it won't be long before JQ replaces QF on domestic NZL ops.

 

Richard, a sign of removing all the Qantas 733 and 734 and swapping them with JQ's A320?

Or do we get to see the 733 and 734 wearing JQ's livery?

[Richard A 0]

Hi SV, I can't quite remember where I read this or which forum it was posted on but an article said that A320s would be used. I'm curious as to whether they'll use VH- or ZK- regos. I was expecting them to merely repaint the 737s to JQ livery to be honest, although the A320 in my opinion would be a better plane as a spotter and a pax. Time will tell I suppose.

[Keith T 2]

Also it won't be long before JQ replaces QF on domestic NZL ops.

 

Eh...so no more mileage earning opportunities on NZ domestic ops unless one buys Jetflex fares (which are more expensive than the QF red e-deals)...