Air NZ cheap seats not cheap enough says agent

By STUART DYE transport reporter

Air New Zealand's new discount fares to Australia are still not cheap enough, says a big travel company.

The national carrier launched its Tasman Express service yesterday, with some fares being cut as much as 45 per cent.

Everyday fares are cheaper, but the overall cost will be only marginally lower than regular special offers.

Under the service, available from October 29, the cheapest return Auckland-Sydney flight costs $398, excluding taxes. With charges the ticket costs $509.

But Flight Centre general manager David Burns said the fare was "nowhere near the levels expected" from a low-cost airline.

"We had already been selling transtasman airfares on full-service carriers for lower prices for some time, that don't require travellers to pay a service fee to get personal service.

"We were recently selling airfares to Sydney for as low as $299.

"True, some of those airlines might not fly several times a day, but Air New Zealand's cheapest fares are by no means available on every flight either."

Air NZ chief operating officer Andrew Miller said the airline had been inundated with booking requests since yesterday's 9am launch of Tasman Express.

"At noon, we had already exceeded our best web revenue figures for the Tasman - triple the daily average."

Managing director and chief executive Ralph Norris said the airline would keep its two-class structure in Tasman Express.

Free food and in-flight entertainment would continue but the food and drinks service would move to a "simpler, more contemporary" style.

Newspapers and magazines will be provided only in Business Class.

Mr Norris said Air NZ aimed to deliver simple, low-priced fares to encourage more people to travel more often.

"Domestic Express Class was revolutionary. Today's announcement is evolutionary. It's the next step in a fundamental change of direction for Air New Zealand."

Mr Miller said three key financial savings meant the airline could cut fares: an expected 10 per cent growth in passenger numbers with extra seating capacity; 15 per cent savings from the new, more economical Airbus jets; and changes to the in-flight food and drinks.

In effect, special and children's meals will not be available on Tasman Express.

A dairy-free vegetarian meal can be requested on booking a flight. Infant supplies will not be available.

The new fares apply to flights to Sydney, Melbourne, Brisbane, Cairns, Perth and Norfolk Island, and from Australia to Auckland, Wellington, Christchurch and Queenstown.

The transtasman market is hot-ting up with the introduction of Emirates flights and the potential start of Virgin Blue services to Australia.

Virgin Blue commercial head David Huttner said the Air NZ fares might not be the bottom line.

He would not give specifics, but "If you compare the fares offered today and what we offer on a similar-length flight domestically, you will find there is still some room to move".

Mr Huttner said the Air NZ move would not affect Virgin Blue's planning.

To launch Tasman Express, Air NZ is offering 1000 free seats to customers who book online in the next 10 days.

A strict "use it or lose it" rule will be enforced to ensure that passengers on Smart-Saver or Flexi-Saver tickets check in two hours before the flight.

If a passenger misses a flight, he or she will have to buy another ticket.