LA-bound travellers may face fare hike after Qantas exit
Air NZ may reduce the number of low-priced seats on the Auckland-LA route as it becomes the only carrier flying direct.
Hot Topic
Infrastructure
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.
Caleb Allison
Tue, 15 May 2012
Tue, 15 May 2012
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
LA-bound travellers may face fare hike after Qantas exit
20591