Aviation, tourism and energy writer for the Business Herald

Air fare bonanza to stay - Jetstar

Jetstar is operating five Bombardier Q300 turbo props on the regional route which can carry 50 passengers each.
Jetstar is operating five Bombardier Q300 turbo props on the regional route which can carry 50 passengers each.

Jetstar's Australasian head says the air fare bonanza for New Zealanders is sustainable and will continue.

Speaking after the launch of an expansion to its regional network, David Hall, Jetstar chief executive of Australia and New Zealand, said his airline's operating model and competition would keep fares low.

He said tens of thousands of passengers had paid less than $50 for regional flights since they went on sale last August and on jet routes about 70 per cent of 1.7 million passengers carried a year paid less than $100.

While regional network wouldn't be profitable for Jetstar "overnight," he said the airline backed the operation for the long-term.

Last week Air New Zealand chief executive Christopher Luxon questioned whether Jetstar's pricing was sustainable.

Hall said his airline wanted to grow the pie rather than cannibalise the competition.

Jetstar had been flying across the Tasman for a decade and main trunk routes with jets for more than six years and those operations were profitable last year.

"We've got a very efficient operating model," he said.

"We're not going to be profitable overnight (in the regions) but we're a very rational competitor and this will be sustainable."

At full list prices the value of the five 50-seat Bombardier Q300s regional planes nine A320s was close to $500 million, representing a substantial investment for Qantas-owned Jetstar, said Hall.

The airline has been flying between Auckland, Napier and Nelson last December and today added flights from Auckland to New Plymouth and Palmerston North, and Nelson to Wellington.

This year Jetstar would have more than 600,000 on its regional network.
Hall said on time performance of regional services was improving.

"It's performing in line with expectations. When you've only got a small fleet small movements can have a big percentage impact."

- NZ Herald

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