Airline price battle: Air NZ and Jetstar competition heats up

By Susan Edmunds of RNZ

A battle that appears to have broken out between Air New Zealand and Jetstar in the domestic aviation market may just be the start of a run of good news for consumers, one aviation expert says.

This week Air New Zealand and Jetstar have announced sales.

Air New Zealand said on Monday it was making more than 200,000 seats available for travel periods between January and June next year.

Auckland to Kerikeri was advertised from $59 each way, and Auckland to Wellington $69. Auckland to Queenstown was promoted from $99 each way. Christchurch to Wellington was from $59.

Then Jetstar promoted a “cheeky getaway sale” with fares from $37 between Auckland and Christchurch and $40 between Auckland and Wellington.

Aviation commentator and Ardmore Flying School chief executive Irene King said a number of things were going on, particularly with Air New Zealand.

“They are taking on board all the adverse publicity associated with the very high airfares. They’ve got a new marketing revenue management team in there and they’re going much more back to the old style of putting sales out there and advertising the really cheap fares.”

She said bargains were usually to be found anyway if people booked far enough in advance but there was significantly more promotional activity happening.

“The domestic market is contracting quite quickly, there’s a lot less disposable income. Air New Zealand in particular will be impacted by government travel being significantly down.”

She said Jetstar was even more interesting.

“They are trying to diversify their market ...we’ve got Hamilton to Sydney, Dunedin to the Gold Coast - I think what we are going to see is a lot more activity from the Qantas group in the New Zealand market. It won’t be New Zealand domestic but it’s going to be New Zealand, Australia, and beyond.

“The power of the Qantas group, we’re only just now starting to see. To me that’s going to be the big story next year.”

She said “interesting games” were being played but they would be good news for travellers.

House of Travel chief executive David Coombes said inflation softening and the official cash rate being cut were changing the environment for New Zealand.

“The airline industry is highly competitive, and both Air New Zealand and Jetstar have had some fantastic deals in market over recent months, clearly taking advantage of the current landscape, and showing competitive intent.

“Regardless of the strategic reasons behind these airline sales, customers win, especially those in the regions who need to travel to main centres for short breaks or before catching international flights.

“At House of Travel, we’ve seen an increase in travel bookings recently, which we believe is driven by growing consumer confidence that disposable incomes will stretch further in 2025. As mortgage costs ease, many homeowners are finding, or anticipating, more disposable income for their holiday plans.”

The best airfares in the sale are not available during peak periods such as school holidays.

Consumer NZ has called for an inquiry into Air New Zealand’s pricing for those times.

It tracked a series of return flights on the national carrier for a family of four over 18 weeks to see what happened to prices during school holidays.

According to Consumer, flights in the school holidays were up to 167% more expensive than in the three weeks previous.