In the wake of the rejected code sharing between Qantas and Air New Zealand on the Tasman, Qantas has indicated that Jetstar will be given more flights on the Tasman, with Air New Zealand CEO Rob Fyfe responding that Air New Zealand’s cut price carrier Freedom Air is set to compete.
Air New Zealand has already cut trans-Tasman capacity with Mr Fyfe telling AAP, “You can’t expect airlines to just go on losing money or making inadequate profits because everyone wanted to see competition.” He added, “Competition that loses money or destroys value is in no one’s interest.”
Mr Fyfe said the decision to stop the Air New Zealand/Qantas alliance meant, “It won’t come to the stage where we pull out but it will come to the stage where we need to look at our business models across the Tasman and while I can’t speak for Qantas but we operate low-cost subsidiaries and we have to figure out how we use those different customer propositions.”
Air New Zealand announced last month that it would cut the number of seats between Auckland and Australia by 11%, Wellington by 15%, Dunedin by 28%, Palmerston North by 15% and Christchurch by 7%.
The rejected alliance between Air New Zealand and Qantas that would have resulted in the two carriers dominating 80% of the market, saving about $20 million each per annum.
Report by The Mole
