KEY POINTS:
Air New Zealand has given some indication of how it plans to introduce more cut-price fares and introduce different classes on domestic flights.
Today, Air New Zealand chief executive officer Rob Fyfe said his company would be increasing the volume of both domestic and international fares available on the grabaseat cheap price scheme.
It would also build substantially on one-off campaigns it had launched, such as buy one, get one free child fares.
"Furthermore, expect to see a simplified fare structure across the domestic network," Mr Fyfe said.
He was reacting to an announcement on Thursday by Pacific Blue of an introductory fare of $39 on Wellington-Auckland, Wellington-Christchurch and Auckland-Christchurch routes.
Mr Fyfe also said that by mid next year, the company's fleet of 16 737s would begin being transformed to include two distinct seating zones.
The front section of the aircraft would have legroom of up to 89cm and specifically cater for frequent flyers and business travellers, he said.
Snacks and beverages would be complementary on some flights.
The rear section of the aircraft would contain a mixed legroom of 76cm to 79cm, similar to that of competitors, where customers would be able to buy snacks and drinks.
Changes to the in-flight entertainment system were also nearing the final stage of evaluation, Mr Fyfe said.
On the ground at main city airports, the company aimed to use new technologies and change the way staff helped customers, to cut at least 25 per cent off the time spent in the airport.
Air New Zealand would also be stepping up its loyalty programme.
In future, the Airpoints programme would better reward those who travelled most frequently with Air New Zealand.
"In essence, the number of times a customer travels with us will be as important as the value of their travel, making it much easier for domestic customers to achieve or retain their Gold Elite status," he said.
Mr Fyfe said: "Meantime, it is interesting to note that our efforts to keep domestic fares as low as possible are in contrast to what's happening in the Australian market where, despite competition, the consumer is often paying more on a comparable route basis.
"Around four years ago Air New Zealand began the process of shaping its domestic business for the inevitable arrival of a significant third competitor, who would come in with low entry fares and over time ramp these up as has been the case in markets like Australia, the United States and United Kingdom."
Lowering the cost of travel to $1 domestic fares in certain cases was only Air New Zealand's first step in remaining the No 1 choice for travellers.
- NZPA
