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Australian low-cost airline Jetstar is today expected to announce it is expanding its New Zealand operations.
Rumours have circulated for months that the company would enter the domestic market as the fourth major carrier - joining Air New Zealand, Qantas and Pacific Blue - or fly the Tasman out of Auckland or Wellington.
Jetstar, a low-cost carrier set up to complement parent company Qantas in the Australian domestic market, has flown transtasman from Christchurch for three years.
Chief executive Bruce Buchanan is to make a commercial announcement this morning in Auckland.
Qantas chief executive-in-waiting Alan Joyce said last month the airline was considering both moves.
Despite opposition from rival Air NZ, which has said there is no room in the New Zealand market for three airlines and has warned of casualties from a "bloodbath" on the Tasman, Mr Joyce said Qantas would not be pulling out.
Qantas has concentrated on its core corporate customers by upgrading lounges in New Zealand this year, and expansion of its budget subsidiary would not necessarily harm its market share.
Pacific Blue would be most at risk from another carrier aiming at the leisure market.
The airline, which celebrates its first birthday of flying New Zealand domestic routes next month, has also recently expanded its transtasman operation with extra services out of Auckland.
While long-haul travel has been hit hard by high oil prices and sagging demand, transtasman travel and domestic demand remain relatively strong.
