Pacific Blue moves to net new market

By CHRIS DANIELS aviation writer

Tasman air market budget newcomer Pacific Blue is revamping its flight schedule, in an attempt to snare both holidaymakers and lucrative business travellers at a time of increasing financial stress on world airlines.

Chief executive of Pacific Blue's parent company Virgin Blue, Brett Godfrey, described the Tasman market this week as irrational and unsustainable, due to the sheer number of competitors and low ticket prices.

Exactly what the full impact of high fuel prices, which have prompted most of the world's airlines to raise fares, will have is not clear, but if Godfrey is right, then the Tasman may be the place to look for it. Fares are already at rock bottom prices, and Godfrey said this week that although load factors were high, yields from Pacific Blue had been "soft".

From June 1, Pacific Blue flights to Melbourne will leave Christchurch at 6.40am, rather than 6am, and its flight to Sydney will leave nearly an hour later, at 7.25am.

The airline is also offering special one-way promotional fares of $99 to Australia (plus, of course, numerous taxes, levies and charges).

Virgin Blue, which cannot use the Virgin name outside Australia, will start flying from Australia to Fiji and Vanuatu under the Pacific Blue name later this year.

Air NZ this week began its Pacific Express low-cost flights to Fiji. The service is similar to the Tasman Express flights launched last year.

Airline manager of marketing, network and sales Norm Thompson said the Pacific Express marked the end of its new short-haul "express" strategy.

So called "lead-in fares" were more than 50 per cent cheaper than those previously offered on Pacific Island services. Bookings for the next 12 months were up 107 per cent from the same time last year.

Thompson said capacity between Fiji and New Zealand was being increased 9 per cent.

Air Pacific, which is jointly owned by the Fijian Government and Qantas, has just increased its flights, with three new weekly services added for the New Zealand winter holiday season.

* Chief executive of British Airways, Rod Eddington, said this week that the surging fuel prices could trigger the collapse of several world airlines.

The warning came as BA reported a 70 per cent rise in profits last year but cautioned that its performance this year would be hit by a huge increase in its fuel bill.

Eddington said he was sure that some airlines would not survive the winter and indicated that full-service carriers were as much at risk as their low-cost rivals.

"There are 54 no-frills carriers in Europe and the number is growing. I have no doubt it will be a very tough winter for everyone in the industry and not just the no-frills carriers."