Qantas offshoot to offer budget fare competition

Qantas' budget airline offshoot, Jetstar, will today unveil details of its December raid on the New Zealand market, with Christchurch confirmed as its local base.

If it follows industry practice and launches with special low fares, South Island air travellers could be set to enjoy the fruits of a Christmas price war, as Jetstar competes with Pacific Blue and Air New Zealand.

Jetstar has already shaken up the Australian budget aviation scene, providing stiff competition for its arch-rival, Virgin Blue. From December it will have two planes and crew based in Christchurch.

It is thought unlikely the Jetstar move is part of a co-ordinated attack on Air NZ, but an attempt to copy the sort of cost-cutting the NZ flag carrier has pioneered on the Tasman.

Air New Zealand's Tasman Express service was a way of driving costs down as low as possible, while still trying to keep high-paying passengers on board.

In Australia, Jetstar operates in much the same way as Air New Zealand's Freedom Air. High-yielding business routes, such as those between Sydney, Melbourne and Brisbane, are flown by Qantas but leisure flights - leaving during working hours, or going to holiday spots - are flown by Jetstar planes.

In Australia it often flies to secondary airports, but its new Tasman services will go to the main airports in Sydney, Melbourne, Brisbane and Coolangatta.

Air New Zealand, stymied last year in its attempts to form a price- and schedule-fixing arrangement with Qantas, has been talking with the Australian airline about ways of co-operating that would not anger competition authorities.

They are thought to be chasing a "codeshare" arrangement, where prices are not fixed between the two, but ticketing and scheduling are.

Flight plans

* Qantas' budget Jetstar division will start flying from Christchurch on December 1.

* It will fly 10 times a week to Sydney, 9 times to Melbourne, 7 times to Brisbane and twice to Coolangatta.

* Qantas services between Christchurch and Australia will be cut, and Jetstar will fly four times a day, seven days a week.

* Overall, Jetstar says the number of Qantas group seats across the Tasman will increase.

* Hot meals will be available, but passengers must pay separately for them.

* Ticket prices have yet to be announced, but Jetstar will be competing at the low-cost end of the market - primarily against Pacific Blue, also based in Christchurch.

* On its website a Pacific Blue fare between Christchurch and Sydney for December sells for $179, plus $81 for taxes, fees and surcharges.