Air New Zealand chief executive Greg Foran says the reduced fares are a way saying thank you. Photo / Supplied
Air New Zealand chief executive Greg Foran says the reduced fares are a way saying thank you. Photo / Supplied
Within minutes of the Government announcing physical distancing rules for flying, the domestic airline landscape changed - again.
Air New Zealand announced it would introduce 160,000 fares of $50 or less into the market and soon after that Jetstar announced it was roaring back to this country's domestic skieslater this week.
Air NZ's chief executive Greg Foran said the domestic operation was its "citadel" and being able to fill the middle seat on jets and fill turbo-props allowed it to offer low lead-in fares.
"It sure helps a lot when you can only sell 50 per cent on an ATR and two thirds on a jet. Getting them all out there makes a heck of a difference. It's great for tourism and Air New Zealand and for our staff - I bet there was lots of fist-pumping going on at 1pm."
The requirement for physical distancing on board meant low-cost carrier Jetstar couldn't make it pay, especially with strict level 3 restrictions for flying through Auckland. For Air New Zealand business was marginal.
Foran said re-energised domestic business - about a third of the airline's business - was a stepping stone to potential travel bubbles with the Cook Islands and eventually Australia for the airline, which is now tapping into part of a $900 million backstop loan from the Government.
"Just being a domestic business is not where were want to be but being a full potential domestic business helps a lot. Domestic is our citadel and it is really important."
He said since fares went on sale this afternoon there had been strong demand.
Before the latest lockdown last month, the airline had been operating at 70 per cent. During the July school holidays some routes had been operating at pre-Covid levels of profitability.
"We want to be back to that and I have a wish that we can get this thing juiced up to 100 per cent."
Demand in June bounced back more strongly than airlines expected after the first lockdown and Foran said he was confident it would surge back again.
The airline is waiving domestic change fees up until March 31 to help boost confidence in booking.
He believed people under the "new abnormal" want to travel.
"I think there's a view that you've got to get on and live your life enjoy a vacation and see your friends. Every time you go back to a lockdown level it gets harder to comply."
After a four-week suspension, Jetstar will resume up to 75 flights on six domestic routes, approximately 60 per cent of its pre-Covid schedule. It has its aircraft parked in this country and is offering Auckland-Wellington fares from $49.
Rules meant planes such as Q-300s could only be 50 per cent full. Photo / Grant Bradley
Foran welcomed the Qantas subsidiary's return and said Jetstar would help stimulate the market.
"We enjoy the competition - I think it makes us better."
Foran said mask-wearing compliance was running close to 100 per cent. He knew of only a handful of cases where passengers objecting wearing one and he did not know of any being banned.
"If they [masks] allow us to get out there and connect across the country and get tourism going I'd wear a mask any day of the week," Foran said.
Masks would be prevalent in many aspects of life around the world and could help accelerate travel in a world where there was still Covid and an absence of a 100 per cent effective vaccine.
"People will manage their way around it and masks seem to be a good option for letting people move safely."
