$29 fares

The Herald reports:

Travellers will soon be able to fly between Auckland and Wellington on late-night flights for $29.

Air New Zealand’s new “Night Rider” service will start on November 5, undercutting its budget competitor Jetstar and offering regular low prices in contrast to the airline’s current Grabaseat fares.

Jetstar said its own low fares were behind the cheap prices, and a commentator says the move is part of a strategy by Air New Zealand to keep planes full.

The airline is facing increased competition from Jetstar, which will next month start flying the main trunk with an extra aircraft.

Air NZ chief executive Rob Fyfe made the fare-cut announcement yesterday, saying it was the first time an airline had offered fares for $29 for an entire plane, and he expected the new flights to be a hit with travellers.

This will be popular for many who are budget travellers, and found the cheap fares always sold out so quickly. So long as people have a place to stay, it means they can fly down late at night for less than the taxi fare to the airport.

It is interesting that the marginal cost of fuel and staff for a domestic flight is small enough to allow for $29 seats. In one sense no surprise that the larger costs are non-marginal such as depreciation and maintenance.

This is a benefit of having domestic competition. Will be interesting to see what Jetstar does,

I’m disappointed though that frequent flyers who use the late night service will not be allowed to access the Koru Club. This sets a potentially disturbing precedent for another rollback of value for frequent flyers.