Airlines in price war over Dunedin

Photo / Paul Estcourt

An airline price war was sparked yesterday after no-frills carrier Jetstar began operating in Dunedin - offering one-way fares to Auckland for as low as $5.

Air New Zealand undercut even that price, offering $1 one-way fares from Dunedin to Auckland, Wellington and Christchurch.

But the catch for the public was the limitations on the low-price tickets - Air New Zealand offered only 600 tickets and Jetstar's $5 fares were sold for just one hour - from noon to 1pm yesterday.

Both airlines offered $49 Auckland-Dunedin fares until midnight last night. Jetstar's standard prices for the route are $99, starting today.

Jetstar Australia and New Zealand chief executive David Hall said the airline aimed to grow the Dunedin market, with "thousands" of discounted tickets sold by yesterday afternoon.

Asked to comment on Air New Zealand dropping its prices, Mr Hall said: "It is a win-win for the community, and a win-win for the traveller."

Air New Zealand shorthaul group general manager Bruce Parton said the airline offered 600 $1 fares, plus $49 fares to Auckland, to prove "we are always competitive".

He questioned Jetstar's commitment after it pulled capacity out of Christchurch to enter the Dunedin market. Mr Hall rejected those claims, saying the airline would grow the Dunedin market and remained committed to Christchurch.

A daily A320 jet service between Dunedin and Auckland was scheduled to start on July 14.

Dunedin was now the 57th Jetstar destination and the fifth in New Zealand, joining Auckland, Wellington, Christchurch and Queenstown.

"Dunedin, I think, is going to be a phenomenally large market for us ..."

BARGAINS

* $5 Jetstar promotional fares on new Auckland-Dunedin route

* $1 Air NZ fares from Dunedin to Christchurch, Wellington and Auckland

* $49 Auckland-Dunedin fares from both airlines

- OTAGO DAILY TIMES