- Low Cost Carriers (LCCs) are a global phenomenon. Many are names well known to New Zealanders. For example, easyJet, Virgin Blue, Southwest Airlines, Ryanair and WestJet.
- LCCs have successfully entered markets the size of New Zealand before and have displayed strong growth.
- Control of domestic terminals by full-service airlines, such as
Air New Zealand and Qantas, is a thing of the past. Both airlines are willing to provide access and facilities to assist the speed of entry of an LCC in New Zealand.
- It is inevitable that an LCC will enter the Trans-Tasman on more than one route - and the New Zealand domestic market - regardless of whether the Commerce Commission authorizes the application for the alliance or not. The undertakings offered by Qantas and
Air New Zealand could speed up the arrival of an LCC.
- The assumption that without the alliance markets would be perfectly competitive is unrealistic.
- LCCs have permanently undermined the price discrimination practices of Full Service Airlines (FSAs) and have had the largest impact on price competition in airline markets in the past 25 years - much larger than any competition between FSAs.
- The LCCs pricing practices have resulted in major fare reductions on FSAs, even benefiting business travellers.
- LCCs are gaining an increasing amount of business, both through market stimulation and taking travellers away from FSAs.
- FSAs have been able to reduce costs but not to the level of LCCs.
- Virgin Blue's expansion outside Australia is virtually inevitable. It serves 24 of Australia's top 30 markets, has 40 aircraft on order plus 10 options and the Tasman is within the range of its fleet.
Vice President Public Affairs/Group Communications
021 472 051
NOTE: The content of all Air New Zealand media releases are accurate at the time of issue, as stated at the top of each release. For updates on any changes, please contact Air New Zealand.
Air New Zealand is proud to be a member of Star Alliance. The Star Alliance network was established in 1997 as the first truly global airline alliance to offer worldwide reach, recognition and seamless service to the international traveller. Its acceptance by the market has been recognised by numerous awards, including the Air Transport World Market Leadership Award, Best Airline Alliance by both Business Traveller Magazine and Skytrax. The member airlines are: Adria Airways, Air Canada, Air China, Air New Zealand, ANA, Asiana Airlines, Austrian, Blue1, bmi, Continental Airlines, Croatia Airlines, EGYPTAIR, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Shanghai Airlines, Singapore Airlines, South African Airways, Spanair, SWISS, TAP Portugal, Turkish Airlines, THAI, United and US Airways. Aegean Airlines, Air India, Brussels Airlines and TAM have been announced as future members. Overall, the Star Alliance network offers 19,500 daily flights to 1,071 airports in 171 countries.
For more information about Air New Zealand visit www.airnewzealand.com and for more information about Star Alliance visit www.staralliance.com.