When Pacific Blue launches mid-May flights between Auckland and Australia, it will aggravate an over-heated market where several airlines admit they are already losing money. The Australia-New Zealand route has always been busy, but competition is growing and carriers are looking for ways to adapt.
Pacific Blue, a low-cost subsidiary of Australia's Virgin Blue, already flies several trans-Tasman routes from Wellington and its Christchurch base. But it gained entry to Auckland, New Zealand's main gateway, only after it and Auckland airport resolved their protracted differences over access.
Still to come is more capacity from Asian and Middle Eastern carriers that enjoy fifth freedoms across the Tasman. Emirates is leading that group with plans to deploy its Airbus A380 on flights from Australia to Auckland next year. Emirates will take delivery of its first A380s next October, and says it will use them on routes to Melbourne and Sydney. Following its current pattern, it will then fly across the Tasman and back in the same day rather than leave aircraft parked in Australia before returning in the evening to Dubai.
Air New Zealand (ANZ) has tried to respond to trans-Tasman competition by increasing frequencies that are attractive to business travellers. Still, chief executive Ralph Norris accuses some rivals of dumping capacity on the Tasman and turning it into a "blood bath".
ANZ lawyers suggest that the airline might consider asking New Zealand's transport minister to approve some form of capacity pooling with Qantas across the Tasman. Even though competition authorities last year rejected a co-operation plan between ANZ and Qantas, the airline's lawyers insist such a pool would be legal. So far, Qantas has not commented and ANZ has not publicly endorsed the idea. As competition grows, however, carriers will be looking for more options.
Source: Airline Business
