Air NZ poised for online showdown

By KAREN SCHERER

Months after introducing an internet-based ticketing service, Air New Zealand is finally planning to provide serious competition for travel agents.

The airline revealed yesterday that it is about to launch a major revamp of its website, and is also considering joining at least one of several new online travel agencies being developed by international carriers to fend off competition from new internet-based players.

The online agencies are expected to bring together airlines from rival alliances including Star and oneworld.

Both Air New Zealand and Qantas quietly introduced online booking services last year.

However, Air New Zealand has been reluctant to promote the service because of technical problems which it says it has now sorted out.

At the travel industry's annual trade show in Christchurch yesterday, the airline's commercial manager, Allister Paterson, conceded internet sales had so far been insignificant.

He said the airline planned an aggressive campaign over the next two or three months to encourage customers to use the net, although he did not expect bookings to reach 10 or 20 per cent in the near future.

The airline also hopes to switch many of the inquiries it receives about its frequent flyer programme to the net by the end of the year. The programme, known as Air Points, has recently employed 15 new staff to handle what it admits is an overloaded call centre in Christchurch.

The service was picked by Herald readers this year as one of the worst telephone services in the country.

The moves are part of a push by airlines to reduce the amount of money they pay to travel agents in commissions, and Mr Paterson said agents would increasingly be forced to pass their costs on to their customers.

He also confirmed Air New Zealand was considering taking part in at least one of several new travel portals being developed by international airlines.

In November last year, five American airlines announced the formation of a multi-airline travel site to compete with the raft of new travel players on the net.

A European site, called Basilica, has also been announced by 11 European airlines, and an announcement is expected shortly for an Asia-Pacific alliance including Singapore Airlines, Cathay Pacific and Qantas.

The trio have been reported to be keen to recruit other airlines for the website, which will be run by a separate company and possibly earmarked for a public float.

Mr Paterson said Air New Zealand was talking to all the groups about their plans and expected to make a decision within the next two or three months.

"We're going to participate in a lot of websites around the world and there may be some we want to take a part ownership in because strategically it's more important, but we're still trying to sort that out," he said.

Meanwhile, Mr Paterson said the airline was not too concerned about the weak New Zealand dollar, even though it had driven up costs and discouraged some New Zealanders from travelling to countries like the United States.

While the weak kiwi had hurt a bit, it would probably be offset by an increase in Americans travelling to New Zealand.

The airline stressed it had enjoyed a strong year with inbound sales, and that revenue from its participation in the Star Alliance loyalty scheme was up by 40 per cent.

Mr Paterson said the airline's merger with Ansett Australia was on track to be completed by the middle of the year.