KEY POINTS:
Qantas has sparked an immediate price-cutting response from newcomer Pacific Blue by announcing resurrected services between Wellington and Christchurch in a $13 million upgrade of its New Zealand operations.
The Australian airline promised yesterday to add another aircraft to its New Zealand domestic fleet of four Boeing 737s early next year, to support an expanded operation including the re-introduction of two daily return flights between Wellington and Christchurch.
That follows its controversial withdrawal of services from the sector in March, handing a monopoly run at the time to Air New Zealand.
But Pacific Blue has since resolved to include three daily return Wellington - Christchurch flights in the domestic New Zealand operation it is to launch next month, as well as services linking Auckland to those centres.
And the subsidiary of Richard Branson's Virgin Blue greeted the return of what it described as "the Qantas flip-floppers" with a limited 30-hour offer of several thousand $30 seats on flights between Wellington and Christchurch.
Its commercial manager, Adrian Hamilton-Manns, said the Qantas move vindicated his airline's decision to enter the New Zealand market.
Qantas regional manager Grant Lilly said his airline had only suspended its presence on the route because of a delay in the delivery of new aircraft needed in Australia and on the Tasman run.
"We would have resurrected Wellington-Christchurch even without Virgin Blue," he told the Herald. But Mr Hamilton-Manns said Qantas had earlier blamed high operating costs and competition for pulling out.
Mr Lilly said Qantas was, unlike the budget newcomer, pitching its services to business travellers and patrons of his airline's large global network.
He said Qantas intended spending $10 million on introducing its Cityflyer brand, which now operates between the six main Australian centres, to New Zealand.
That would include:
* A $3 million upgrade of domestic club lounges in Auckland, Wellington and Christchurch.
* Refurbishing aircraft cabins.
* Self-serve check-in kiosks at airports.
* An enhanced free food service and morning newspapers.
* A free bar service from 4pm on weekdays.
Another $3 million would be spent on installing satellite navigation capabilities on several of its jets to improve access to the lucrative Queenstown destination in conditions of reduced visibility.
Mr Lilly said that the extra Boeing 737-400 aircraft would also help it to improve its on-time performance and offer a better "disruption recovery capability".
That is an area where Qantas has come under increasing criticism from passengers.
Despite scepticism among industry commentators about the New Zealand market's ability to support three domestic air operators, Mr Lilly said: "We are here to stay and to do the job as well as we can. History has shown there isn't room for two full network carriers [but] we are not trying to be an all-points carrier, and Qantas is part of a global network."
Aviation analyst Rob Mercer of stockbrokers Forsyth Barr welcomed the return of Qantas flights between Wellington and Christchurch but said they were "a bit of a token gesture" and free food and drink would be no substitute for frequent flights for business travellers needing flexibility in their bookings.
