Wellington, New Zealand: Australia’s largest airline Qantas Airways on Thursday announced plans to expand flights within New Zealand in a significant shake-up of the market.
Qantas subsidiary Jetstar said it planned to add at least four new destinations starting December to the five cities in New Zealand it already serves. That will increase its competition with Air New Zealand, which currently enjoys a monopoly on many routes.
Air New Zealand shares fell 9.4 per cent on Thursday in response to the announcement.
Jetstar started flying between Australia and New Zealand a decade ago and began domestic New Zealand flights in 2009. By its own estimation, it has gained a 21 per cent share of the market based on kilometres flown, or a 17 per cent share based on passenger numbers.
“When Jetstar brought low fares to New Zealand’s key routes six years ago it completely transformed the market in terms of value and now we’ll do the same for regional New Zealand,” said Qantas Chief Executive Alan Joyce in a statement. “The community has been calling out for more choice and lower fares on regional routes in New Zealand because there’s a lack of competition.”
Jetstar currently flies five domestic routes. Four include Auckland and go to Wellington, Christchurch, Dunedin and Queenstown. The fifth is between Wellington and Christchurch. It has yet to finalise the planned new destinations but listed seven under consideration: Hamilton, Rotorua, New Plymouth, Napier, Palmerston North, Nelson and Invercargill.
Jetstar said the new routes would be served by a fleet of five 50-seat Bombardier Q300 turboprop planes, which it would add to its current domestic fleet of nine 180-seat Airbus A320 planes.
New Zealand Prime Minister John Key said in a statement he welcomed the news.
“This will create jobs, mean cheaper fares and more choice for New Zealanders and our international visitors,” he said.
Air New Zealand Chief Executive Christopher Luxon said the announcement didn’t come as a surprise and it would fight hard to remain the number one choice for regional customers.
“We’ve had other Australian competitors come and go from New Zealand in the past and we are always ready for competition in our home market,” Luxon said.
