KEY POINTS:
The "flying kangaroo" will no longer be seen in New Zealand domestic skies from June as Qantas budget airline Jetstar takes over.
Jetstar will pick up Qantas routes from June 10 - except for Rotorua - increasing the number of seats by about 43 per cent using bigger planes but reducing the number of flights.
Qantas will continue to fly across the Tasman with a revamped schedule and new planes.
Jetstar launched its domestic services with nearly 30,000 one way fares at $1 on offer which sold out in minutes, frustrating some bargain hunters who struggled to get on to the airline's website which was swamped with around one million hits.
The airline will start with two 177-seat Airbus A320 aircraft from June 10 before introducing a third A320 from June 24, subject to regulatory approval. By that date, it will offer six return services daily between Auckland and Christchurch, three between Auckland and Wellington, and daily services between Auckland and Queenstown, Christchurch and Wellington and Christchurch and Queenstown.
The number of seats on offer a week will increase to 29,700 but the number of services will fall from 89 to 85.
Jetstar's chief executive Bruce Buchanan said the total number of jobs in New Zealand would grow from the more than 800 Qantas and Jetstar's existing Christchurch operation now has to more than 1000. Some staff could be redeployed from Qantas.
Jetstar has been flying across the Tasman out of Christchurch for the past three years and will in April start flights to Sydney and the Gold Coast from Auckland.
He said he did not think during a recession was a bad time to expand the airline.
Lead in web-booked one-way fares now start at $29, 5c more than what low cost rival Pacific Blue introduced in anticipation of Jetstar's launch.
Air New Zealand group general manager of shorthaul airlines Bruce Parton said Jetstar's domestic expansion showed Qantas in New Zealand was a "failed experiment" in the corporate market.
The airline's lack of frequency and punctuality problems meant business travellers had returned to Air New Zealand, he said
Air New Zealand dominates domestic flying and Mr Parton said it was used to competing aggressively in the leisure market where cheap fares were popular.
Add-on charges imposed by low cost carriers were off-putting, he said.
Jetstar's charges include a $2 per sector for a credit card booking fee, $10 for 20kg of luggage and charges for food and beverage on board.
