Jetstar takes on Air NZ with $7 Queenstown fare

Jetstar chief executive David Hall said the airline was breaking the monopoly on a seventh domestic route. Photo / Greg Bowker

Jetstar is selling limited $7 fares today to promote its new Wellington-to-Queenstown route in a bid to further breach Air New Zealand's hold on the domestic market.

The 90-minute sale starts at 9am for a route the bargain airline will begin flying on December 22.

Jetstar is also opening up a twice-weekly Sydney-Queenstown flight and increasing existing Melbourne and Auckland services to Queenstown.

House of Travel executive Brent Thomas said that although the fares were great for travellers, all domestic players knew the bargain-basement fares were unsustainable. But they would make a point.

"Obviously it's not going to be sustainable at ridiculously low prices, however what it does do is create demand. It grabs attention and creates awareness of a service which they therefore hope to get benefit from longer term.

"These sorts of things do flow on and more people do come even when prices return to more normal levels."

Mr Thomas said it was good timing by the airline, which would pick up early summer demand.

He doubted whether Air NZ, which he estimated had 85 per cent of the domestic market, would respond to the $7 fare.

Jetstar chief executive David Hall said the airline was breaking the monopoly on a seventh domestic route.

"Queenstown is one of the region's premier tourist spots and we're very pleased to be increasing domestic and international links as part of our overall commitment to the New Zealand market."

Air NZ's group general manager for Australia, Bruce Parton, said he was not worried about the promotion. Kiwi travellers had been taking advantage of the airline's sale of 1000 fares under $20 designed to fill up planes for the remainder of the Rugby World Cup.

"We all look to put cheap fares out there to stimulate travel. We've had fares even this week of $3 and $5. We've done $1 fares at Grabaseat for five years. I don't think seven bucks is such a bargain - the Australians take a while to come up to speed."