LA-bound travellers may face fare hike after Qantas exit

Kiwi travellers flying direct to Los Angeles can expect average fare prices to rise as Air New Zealand remains the only airline flying the route. 

Qantas has just exited the Auckland-LA route after announcing it would stop the service in February following a slump in profit.

 

Air NZ said at the time it planned to increase capacity and but did not intend to increase prices.

 

An airline spokesperson says compared to the period before Qantas announced its withdrawal, individual ticket prices have dropped 14% for economy and 16% for premium economy and business premier.

 

However, House of Travel retail director Brent Thomas says individual prices are only part of the story.

 

While the airline may have technically cut prices for individual fares, it may also have reduced the number of seats available at that price.

 

"Because you lose that competition, there will be fewer seats available at that price in the lower class, so people are forced to upgrade, driving a higher price to the average customer," Mr Thomas told NBR ONLINE.

 

He says it is logical to assume the average price will go up over time.

 

Eagle Aviation Consulting director David Lanham says although Air NZ is now the only carrier flying directly to LA, it still faces stiff competition from airlines which don't fly direct.

 

"A Qantas fare to LA via Sydney is $200 cheaper than a direct Air NZ flight from Auckland. And an Air Tahiti Nui flight from Auckland via Tahiti is $50 cheaper," he says.

 

Mr Lanham says while there is still some competition, Air NZ will be happy Qantas has exited the route.

 

For the period from June to October this year, Air NZ has increased its capacity on the Auckland-LA route 6% compared to the same period in 2011.

 

"That is obviously in response to the Qantas withdrawal. Qantas had about 20% of the capacity between Auckland and America, so that's all gone," he says.  

 

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11 Comments & Questions

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Bring on JQ AKL to LAX.

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Great article but is far too diplomatic. Air NZ is well aware of the 'dumb kiwi' gotta be loyal who dont care about shopping around and with so many alternatives the savings can be fantastic especially if time and several hops is not a concern.

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Hope, that an American carrier steps in to fill the gap. Sadly, the American airlines seem to come-and-go; such as, Pan Am, Continental Airlines, United Airlines; even Air Canada.

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Remember when the airlines left Air NZ with tjhe Auckland Hawaii route
Prices doubled within a couple of years

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United Airlines are bound to fill the gap now they are moving back into the NZ market next year with their direct services from Auckland to Houston.....NZ are aware of this and so are not likely to disenchant the travelling public in the short-term by increasing fares too steeply.

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Maybe you should ask the right question first!
Why have all the other airlines pulled off the route.
Because seat fares at those reduced rates are not sustainable for those airlines, they are losing money.
Air NZ has the market share on this route.
Why?
Because the so called dumb kiwis as so politely named above choose to fly with the national airline, have pride in their national airline as an Internationally recognized award winner numerous times over.
If you've conveniently forgotten, oil prices have increased nearly 300% since the time of 85c a litre of 91, as have the airfares to compensate. Hawaii comments above!

Remembering the shareholder disappointment at the lack of profit Air NZ published in their last report even tho they were one of the few to make a small profit due to the economic climate, no other airlines made a profit.

Seats are cheaper than they've been for a while, but it's funny how some expect to get to the other side of the world for the price of a bus fare but at the convenIence of jet speeds.

I'm a frequent traveller and a public shareholder as are all kiwi taxpayers with Air NZ and have nothing but accolades for the service they provide,
The proof will have to be in the pudding as far as the article above is concerned. I question the substance of the claim by the travel agent as they are increasing frequency and flights which means more aircraft which means more seats.
Of course there will be cheaper seats via Australia or elsewhere because of the inconvenience of going via various other countries.Makes sense.

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"Satisfied" do you work in the same marketing department that invented the pedo puppet and vomit coloured uniforms? Accolades ... yeah bro.

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Agree with Satisfied, Kiwi's need a reality check. We're at the end of the world, it's not profitable for other airlines to operate here, we can only rely on Air NZ who often are forced to operate routes at a loss in the interest of our main export earner, tourism. Sad that competition has left the skies on the direct route, but people have options. Our national carrier is not a charity....

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Satisfied, well done. I am also a frequent traveller going on 40 years. I lived in LA in the 80's and ran a travel company selling tours down here. The price of a return ticket LAX AKL was around US$1,200 in those days. I may not not like the uniforms but I do like the staff and the service. My first choice is and always will be Air NZ

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Ripped us off since NAC, why would they change now. Even Labour didn't buy back their shares , still saying once sold , can't get back, ?

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Take soem time folks to study this industry - it's a train wreck. Air NZ is a very well managed sharp business - theyhave to be or they are dead in the water. Boo Hoo they may rise prices in AKL - LAX gee whiz what will a whopping 6% or so increase bring real fares up to 1990 prices? None of you greedy people wold offer your services at 1980's real prices so why should Air NZ? I'd like to pay my accountant $50 for my annual taxes yet he wants $1100 - should I scream blue murder like you twits?

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