Air New Zealand slashes fares up to 23%; changes fares structure

Air New Zealand announced (16-Oct-2009) plans to reduce its domestic fares by up to 23%, while also simplifying its fare structures to two simple options. Air New Zealand CEO, Rob Fyfe stated he believes the current New Zealand domestic market with three players in unstable and sees the biggest challenge as "being able to adapt" (NZ Herald, 17-Oct-2009). Effective 19-Oct-2009, fares are being reduced by 10% on average to help further stimulate domestic travel, while fare structures are being simplified, with the current three fare types being reduced to two:

• Smart Saver fare: Will remain unchanged, and will only be available online.
• Flexi Plus: Start at "substantially lower" levels than existing Fully Flexi levels, and provide more benefits than previously available, including two free 25kg checked bags and the ability to change flights at the airport on the day of travel for free to any available seat. [more]

Air New Zealand: "Our business customers have been telling us that their plans change regularly and that they need a fare that allows them ultimate flexibility on the day they are travelling...Cheaper Smart Saver airfares, will stimulate travel, growing the market and adding more tourists into regional New Zealand with flow on benefits to accommodation and attractions as the market recovers from recessionary impacts," Bruce Parton, General Manager Short Haul Airline. Source: Air New Zealand, 16-Oct-2009.

Air New Zealand: "We see the opportunity to now stimulate the demand we see re-emerging in the marketplace…Flexibility is worth a lot to a business customer because time is money. At the low end of the market fares are already rock bottom…Two's company, three's a crowd [in the New Zealand domestic market]. Certainly one of the competitors is finding it very challenging in the market at the moment when you look at their load factors. I guess it's kind of 'watch this space' at the moment," Rob Fyfe, CEO. Source: NZ Herald, 17-Oct-2009.