Never surrender Air New Zealand

Yes – I know the trans Tasman fares are pretty low, making it hard to compete.

Yes I know that code sharing gives more flights.

But I also know that Pacific Blue is not Air New Zealand, and when I want to fly on Pacific Blue I book Pacific Blue.

I also know that merging the flights of the two airlines means less competition and higher fares across the Tasman, even if you somehow manage to say that it will “stimulate a new wave of competition in Australasian aviation”

And finally I know that you’ve tried this before Air New Zealand, and failed. It was hugely distracting during those years you tried to link up with  Qantas and I guess you’d rather just not talk about Ansett.

But the worst part of Air New Zealand’s latest attempt to forge a trans-Tasman alliance is that the best airline in the world, has absolutely no need to do so. Air New Zealand eventually out competed Qantas domestically, and the pathetic JetStar is all that remains, and they can do the same with Pacific Blue.

So yes – I’ll be able to use Air New Zealand’s website to book a flight to Perth via Melbourne, flying Air New Zealand and Pacific Blue. And I’ll be able to book to fly from Sydney to Palmerston North (though I am not sure why) using Pacific Blue and Air New Zealand.

But I already book trip like that. Indeed we customers with online access or travel agents have no need for airline alliances any more, as it’s so simple to buy good value one way fares on either airline. So where is the value?

The value is in one place only – and that is in reducing competition on the trans Tasman route, and that’s not giving us a fair go. The third and fourth components to the deal are the ones that hurt the customer:

“3 Revenue generated across all Tasman sectors currently operated by either airline, or which may be developed under the agreement, will be allocated between the two carriers, and;

4. A lounge co-operation agreement that will ensure lounge access to qualifying guests of either airline.”

Revenue is allocated – so there is no incentive to out-compete on price or, scarily, on service. Meanwhile those AirNZ lounges will be filled to overflowing, as will the Virgin Blue ones. That’s not great a customer experience (or an inspiring journey) for anyone.

I hate to think of all of the management time and legal fees that will be committed in this hopefully hopeless cause for code sharing. The ACCC has grown some teeth recently, and you’d think the commerce commission would see this in a poor light as well.

So please Air New Zealand focus instead on out-competing Virgin Blue, and beat them in on the web, in the airfields, and with ever growing strength and confidence in the air.

And never surrender to code sharing on your most important local routes.

About Lance Wiggs

@lancewiggs
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4 Responses to Never surrender Air New Zealand

  1. Brad H says:

    This code sharing agreement is interesting.

    I don’t see how it could possibly lower prices or increase competition. However the benefits of being able to book Tamworth to Tauranga would be nice especially if the timetables were able to be synced so that domestic flights met international flights between the two carriers.

    The biggest problem I have with Air NZ on the Tasman route is they have priced themselves out of the market. I booked on Jetstar to fly to Sydney in August for $119 NZD including baggage – 20kg. On Air NZ later this month they are changing the baggage rules so that you can only have one bag, and in addition to this they are charging for food.

    Unless Air NZ drops their price to match that of Jetstar then Jetstar will win. I don’t mind paying more for a better service but it cannot be excessively more for something that is essentially the same. Pacific/Virgin do well with nice staff, simple booking procedures, simple loyalty club that is free to join and gives you reward points on all your flights, and the food on board is not priced through the roof.

    Like

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