Air NZ joins $9 price war, Jetstar announces new NZ routes


Air New Zealand hit back, releasing hundreds of $9 fares to and from Hamilton, Rotorua, Tauranga and Invercargill, which it said had been "left out" of Jetstar's plans..

Jetstar held its sale to promote the expansion of its network to Nelson, Napier, Palmerston North and New Plymouth, in what pundits believed could herald the start of a price war.

The sale was originally due to run until 1.30pm, but the airline extended it for two hours after a computer server crashed, leaving frustrated travellers unable to buy tickets when the sale first opened.

Spokesman Phil Boeyen said the server crash appeared to be a case of "unfortunate timing".

The low-cost carrier announced the new routes between the regions and Auckland on Monday, with the Nelson flights also going to Wellington.

It has since moved on to "the second stage" of its sale, which runs until midnight on Tuesday, offering tickets on the regional routes in December, February and March priced at $25.

'It's raining planes'

Nelson was the big winner as it was the only centre with two destinations – Wellington and Auckland.

Nelson Mayor Rachel Reese said she had kept the announcement secret for 36 hours.

"You can hear the people cheering from Trafalgar St," she told a crowd at Wellington Airport.

Wellington Mayor Celia Wade-Brown said there was now more reason to extend Wellington's runway as people from the top of the South Island now had more opportunity to fly to Wellington then elsewhere overseas.

Nelson MP Nick Smith said it was "fantastic news" for Nelson, an isolated region that depended on the strengths of its links with other parts of New Zealand.

"Studies show that on average air fares are 30 per cent less where there is effective competition and that amounts to millions of dollars of savings and thousands more visitors to Nelson."

Smith said the Jetstar link was important to the visitor industry, but the biggest gain for Nelson was making nationwide businesses viable in Nelson and for people to be able to easily connect across the country through more competitive air services.

Launch 2

"With house prices going through the roof in Auckland there is an opportunity for us to attract businesses to our region."

He was "pretty loyal" to Air New Zealand,  and said it deserved credit for its substantial investment in maintenance services in Nelson.

"But I still believe the region's overall benefit is in having a choice of services," Smith said.

Nelson Tasman Tourism chief executive Lynda Keene said the increased competition was "really great news" for Nelson and Tasman residents.

"Grandparents who might go to Dunedin, Auckland or Christchurch once a year might be able to travel three or four times a year. It's definitely going to open up a lot more opportunities."

It was also really exciting from a business perspective, she said.

"We're really fortunate to have a lot of frequency with Air New Zealand which has been a wonderful contributor to the region, but Jetstar coming in is going to make it a bit easier for people coming out of Auckland, Wellington or Christchurch, particularly for trans-Tasman services."

It would also make international travel more accessible through Jetstar's links with Emirates.

With Originair and Kiwi  Regional Airlines joining the regional competition, "it's raining planes", Keene said.

'It's only good news'

Palmerston North mayor Grant Smith said the announcement was welcome for the city and the region.

"The region will get lower fares and it will also help people who otherwise couldn't travel."

Smith expected the move to give tourism in the region a boost and help retailers and agribusiness as well.

"Attractions like the [Manawatu] Gorge and the Tui brewery will become more accessible."

New Plymouth Mayor Andrew Judd also said Jetstar's expansion was great news.

"Having both Air New Zealand and Jetstar operating out of New Plymouth will give passengers more choice and more opportunity to afford to fly, and give visitors even more reasons to come here," Judd said.

The New Plymouth District Council was already planning extensions at the airport's terminal, runway apron and public car park, with construction due to start in May next year.

Some disappointment

But some southern leaders were disappointed Invercargill was not a new destination.

Southland District Mayor Gary Tong said he was not involved in the consultation with Jetstar, and it was disappointing the airline had chosen not to come.

But he was hopeful Jetstar would consider Invercargill again.

"There are certainly the numbers [of people] coming south."

Venture Southland chief executive Paul Casson said although it was disappointing, other airlines might be interested.

"Visitor numbers look good for the next few months ... there may be other airlines who want to fly into our region."

Jetstar had made a commercial decision to support smaller regions than Southland, he said.

"Luckily we've got Air New Zealand, and they're very good to us, which we've seen last week in a reduction of fares."

'Very competitive process'

Economic Development Minister Steven Joyce and Transport Minister Simon Bridges welcomed increased competition in the regional aviation market.

Transport linkages are crucial for regional development and the new air linkages would help boost business and tourism traffic into regions like Taranaki, Hawke's Bay, Nelson and Manawatu/Whanganui," Joyce said.

"I know it's been a very competitive process between the different regions for the opportunity to host the new carrier. I'm confident that this expansion of regional routes will be successful and lead to more competition on regional routes in the future," he said.

The first of Jetstar's fleet of five regional 50-seat Bombardier Q300 aircraft to service the routes arrived in Wellington over the weekend.

Jetstar will face stiff competition from national airline Air New Zealand, which announced last week that it will slash two million flights to below $100 over the next year.

The announcement came as Air New Zealand celebrated record profits of $327 million in the year to June 30.

Air NZ chief executive Christopher Luxon said lower fuel prices and more seats would drive down costs for fliers.

House of Travel commercial planning director Brent Thomas said competition from Jetstar also played a part.

 - Stuff