American Airlines' planned daily service between Auckland and Los Angeles is already benefiting consumers after Air New Zealand responded by promoting a $499 one-way fare on the route, American Airlines has suggested. American Airlines chief executive Doug Parker announced it would launch a daily non-stop service between Auckland and Los Angeles from June, in conjunction with joint venture partner Qantas.
Parker said American Airlines and Qantas had yet to work out prices, but said consumers would benefit from the "friendly competition" with Air New Zealand, which had held a monopoly on the route since 2012.
Qantas chief executive Alan Joyce, who joined Parker and Transport Minister Steven Bridges in Wellington for the announcement, said flights between Auckland and LA were likely to be cheaper outside the northern and southern hemisphere summer seasons.
"The thing with the Pacific has always been the seasonality of it. You get parts of the year which you have to stimulate with lower airfares.
"There will be a lot more people travelling, probably on lower airfares, but we think the economics will work."
Air New Zealand responded to the move by its rivals by promoting a $499 one-way and $973 return fare between Auckland and Los Angeles on its Grabaseat website, for flights between early May and late August.
Spokeswoman Brigitte Ransom, said that while it had some sale fares to the US on its Grabaseat site on Wednesday, there had been no recent changes to its standard fares.
Air New Zealand's Auckland to Los Angeles return fares booked six months in advance cost about $2000 for economy, $4000 for premium economy and $8000 for business class.
"We're in something of a golden era of travel at the moment with many destinations being much more accessible and more competitively priced," Berenson said.
Parker said attractions of American Airline's Auckland to LA "product" would include the fact it would use its newest aircraft, a 787-8 Dreamliner, to fly the route. The airline offered wi-fi throughout the aircraft, he said, with a "flight pass" costing US$19 (NZ$29).
It expected most of its customers on the route were likely to be people from North America, travelling to New Zealand on holiday or on business, rather than New Zealanders, he said.
American Airlines would market New Zealand as a destination to its 100 million frequent fliers through direct marketing, which he expected would boost tourism and "grow the market".
"The winners here will be consumers," he said.
Joyce said Qantas planned to upgrade its airport lounge in Auckland, but not in time for the launch of the joint service.
Bridges said the service marked "the first direct, non-stop competition" between the One World and Star Alliance airline alliances on the route. "Competition, ultimately, is very good for consumers," he said.
American Airlines' aircraft will have 226 passenger seats, including 28 "lie flat" business class seats and 55 economy seats with extra leg room.
Air New Zealand flies daily to LA with about 17 return flights per week and has had a monopoly on the route since Qantas axed its Auckland to LA service in May 2012.
It uses Boeing 777-200 and 777-300 aircraft with economy, premium economy and business class seating on the route.
Parker acknowledged other American airlines had struggled to make similar services work commercially in the past. But he said the fact the travel market had got "so much bigger", the economics of the mid-sized 787-8 aircraft, and the joint venture partnership with Qantas meant he was "highly confident" the new service would be sustainable.
He and Joyce said they could partner on an additional route between New Zealand and Dallas down the track.
"We can build on the LA service over time but we need to walk before we can run, and demonstrate we have digested the Auckland-LA and Sydney-LA markets successfully. When that happens we will be looking at expansion opportunities."
Tourism Industry Association chief executive Chris Roberts said the US market was growing at 11 per cent a year, with 237,000 visitors arriving to New Zealand in the past year.
Their total spending was an estimated $967 million a year.
"The US is our third biggest visitor market and they enjoy what we have to offer," Roberts said.
JOHN ANTHONY AND TOM PULLAR-STRECKER
Last updated 15:07, November 11 2015