Air NZ to fill Freedom budget role

By DANIEL RIORDAN and MATHEW DEARNALEY

Air New Zealand's budget airline, Freedom Air, will disappear from domestic routes but its services to Australia will be expanded.

Freedom will be withdrawn from local services on September 23 to release aircraft for 16 extra Queensland flights.

Air NZ says its own no-frills domestic service, to be launched on October 27, will offer fares as cheap as Freedom's.

Eleven Air NZ services to Queensland will be cut, but the net impact on the group will be an increase in capacity between New Zealand and Brisbane of 19 per cent.

Air NZ is getting rid of business class seats for its new domestic look and says the extra 14 seats on each of its Boeing 737-300s and the spare capacity it already has will offset the loss of seats from Freedom.

Details of the revamp, including ticket prices, will be revealed at the end of the month.

Air NZ's sales and distribution head, Norm Thompson, promised that Freedom's removal from the domestic market would not mean an end to budget fares.

"Customers who have enjoyed Freedom pricing will certainly continue to enjoy that sort of pricing going forward with the new Air NZ model."

Freedom general manager Wayne Dodge said the changes announced yesterday would have minimal impact on his staff. Employees working on the domestic operations would be reallocated to the boosted transtasman services or spend more time working for Air NZ.

Meanwhile, the Airline Pilots' Association has withdrawn its notice of a 48-hour strike by 500 pilots from 4am next Friday after negotiating a job-security deal with Air NZ..

Notice was issued last week after the airline said it could not guarantee Air NZ pilots work with Freedom unless they accepted cuts to conditions.

Pilots feared that Freedom would be expanded at the expense of some of their jobs, but the association assured them yesterday that the deal guarantees existing pay and conditions even if pilots found themselves seconded to Freedom.

But all recruits will in future serve time with Freedom on that operation's employment terms, which do not include extras such as company superannuation contributions, before graduating to the main airline.

Pilots have also been told that Freedom will expanded the Queensland service using its existing allocation of four Boeing 737 aircraft, allaying union fears that its fleet may be expanded at the expense of the main airline.

Although the union said it had timed its strike plans to avoid the school holidays, which end tomorrow, it admitted overlooking disruption to travellers to the second Tri-Nations rugby test in Wellington next weekend.

The Freedom changes could pose problems for Air NZ. Greg Bridgman, marketing head of the country's biggest corporate travel management company BTI New Zealand, warned that by switching much of its Queensland capacity to Freedom, Air NZ made itself vulnerable to attack on the route from full-service carrier Qantas.

Freedom has been flying domestically since May of last year and transtasman for more than six years.

Last week it made 58 return flights between Auckland, Wellington and Christchurch, carrying 9000 passengers during the busy school holidays.

In a more typical week in June it carried 5500 passengers.

Freedom Air customers yesterday expressed dismay at the prospect of the no-frills airline withdrawing from domestic routes.

Budget travellers lining up for tickets at the small Freedom counter at Auckland Airport described the decision as a blow to competitive fares.

"I wondered how long it was going to last," said a Christchurch man who did not want to be named.

"Clearly, they could not operate two airlines side by side forever."

Freedom customers said they were eager to see whether another airline would fill the budget gap.

For Christchurch woman Robin McGregor, flying Freedom all the way for a holiday on the Gold Coast had been the cheapest option.

"I chose Freedom because it was cheaper, the flight times suited me and I could make all the arrangements on the internet.

"And I like the no-frills style compared with the others. After all, who needs to be fed four times?

"Staff show a bit more humour as well. On one trip they wore their T-shirts back to front. Those little things make a difference."

Several passengers had saved about $200 by making bookings well in advance on the net.

- additional reporting Wayne Thompson

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