Post by flyjoe180 on Feb 16, 2008 11:44:00 GMT 12
New Zealand has had only a taste of budget airlines in the form of Pacific Blue, Jetstar and the soon-to-close Freedom Air, according to industry experts.
Waiting in the wings is a new breed of Asian and Australian carriers who promise nothing short of a revolution for aviation in the Asia-Pacific region.
Singapore Airlines-backed Tiger Airways launched in Australia in November. Lion Air from the Philippines then announced that it too would target the red continent.
Lion is one of Asia's fastestgrowing airlines with 122 Boeing 737s on order, but has a woeful safety record.
Both of these carriers are expected to expand to at least trans-Tasman services sooner rather than later.
But the revolution for New Zealand's tourism market and Kiwi holidaymakers will come from Asian budget airlines eyeing direct long-haul flights to New Zealand.
AirAsia X from Malaysia is considered a front runner, having already started services from Kuala Lumpur to Brisbane, with plans to add more Australian destinations.
Long-haul budget airlines have reduced the cost of international travel by as much as half on other routes, such as Hong Kong to London.
Derek Sadubin from Sydney's Centre for Asia Pacific Aviation says Pacific Blue's arrival on the Tasman and main domestic routes is the first of a potential wave of low-cost carriers to target New Zealand in the next two or three years.
A plethora of Asian budget airlines are looking to push beyond their existing regional services to satisfy the burgeoning demand from Asian tourists.
Cheap long-haul services have the potential to revolutionise longdistance travel in the same way that budget airlines have turned domestic travel upside down.
Hong Kong's Oasis was the first to challenge the establishment on the highly competitive Hong Kong to London route at the end of 2006, offering fares as cheap as £152 (NZ$380).
Qantas budget offshoot Jetstar, which also flies to Christchurch, began flying to Japan in March selling fares of just under $700 via Sydney, little more than half the cost of a direct flight on Air New Zealand.
AirAsia X opened on Kuala Lumpur to Brisbane early last year with fares of A$179 and was an immediate hit. It has 15 Airbus A330-300 wide-body jets on order.
Mr Sadubin says the South Pacific would be key for AirAsia X to maintain its growth. "So before long AirAsia X will be in New Zealand.
"There is a huge untapped budget airline market in Asia which carriers like Tiger, Jetstar and AirAsia will have a lot of fun carving up over the next 10 to 15 years."
But while fares will be cheaper, seats will be more cramped and meals and entertainment will cost extra. AirAsia X will cram 30 per cent more seats into its new A330s in two classes by using narrower seats.
Airlines will increasingly move into two camps. Traditional fullservice carriers will target the premium market with better seats and services, leaving the no-frill airlines to chase the masses.
"It is finally recognition by the airlines of different market segments," Mr Sadubin says.
National carriers such as Qantas have set up their own budget brands to take advantage of the shift, making Air New Zealand's decision to close Freedom Air surprising, he says. While international fares will become cheaper for New Zealanders, tourism could be the biggest winner.
The Asian airlines are focusing on their home markets of more than 600 million, reducing the importance of the small New Zealand market.
"Overall they are looking to bring passengers into the South Pacific market because Australia and New Zealand are very popular destinations in Asia," Mr Sadubin says.
Tourism New Zealand chief executive George Hickton says more services will help reduce the shortage of international seats to New Zealand and help expand some Asian markets, suchas Korea and Japan, which had been in decline.
It would also open new routes beyond Asia to Europe, he says.
But the lack of frills could be an issue on the long flights to New Zealand. "People tend to view a 12-hour flight as something they might want a bit more comfort on," Mr Hickton says.
Virgin Blue chief executive Brett Godfrey agrees, and says Virgin's long-haul arm V Australia, being launched this year, will offer a range of comfort levels according to price.
Oasis Hong Kong and AirAsia X offer a basic form of business class at a fraction of the cost of their fullservice competitors.
Mr Godfrey has set a goal for Pacific Blue to be a "quite a player here within two years".
More Tasman and domestic services are planned once additional aircraft arrive during the next two months.
But, while V Australia has seven Boeing 777-300ERs on order, flights from New Zealand are still some way off. Phase two from 2010 could feature New Zealand.
AirAsia X has looked at New Zealand as a possibility for long-haul services, Mr Godfrey says.
Jetstar has ordered 15 of the new Boeing 787 Dreamliners to drive its international ambitions.
The 787 is the first big jet able to fly non-stop to Asia from Wellington's short runway, with a full load of passengers.
Wellington International Airport is trying to attract an airline willing to provide a direct link to Asia and beyond.
It claims the route is worth $13 million a year to an airline.
Jetstar is in talks with five of the biggest airports in Asia to establish a hub as a spring board to multiple tourism destinations in Europe.
But Jetstar spokesman Simon Westaway says any long-haul service from Wellington is unlikely in the foreseeable future. Jetstar is more focused on developing its trans-Tasman services and adding domestic New Zealand to the network.
Wellington airport's new chief executive Steven Fitzgerald says airlines accept the economic case put forward by the airport, but it will be case of waiting its turn for available 787s.
Air New Zealand deputy chief executive Norm Thompson says the Asian markets have traditionally been poor performers.
"It is not a market that we have ever made any money out of."
Air New Zealand pulled off the Singapore route in 2006 after 40 years and has also cut back services to other Asian ports, replacing them with services to China.
Most of the traffic going through Asian points to and from New Zealand comes from Europe.
"So I really question whether there is a market big enough for Asian carriers just to solely operate... between Asia and New Zealand," Mr Thompson says
www.stuff.co.nz/stuff/4403347a13.html
Waiting in the wings is a new breed of Asian and Australian carriers who promise nothing short of a revolution for aviation in the Asia-Pacific region.
Singapore Airlines-backed Tiger Airways launched in Australia in November. Lion Air from the Philippines then announced that it too would target the red continent.
Lion is one of Asia's fastestgrowing airlines with 122 Boeing 737s on order, but has a woeful safety record.
Both of these carriers are expected to expand to at least trans-Tasman services sooner rather than later.
But the revolution for New Zealand's tourism market and Kiwi holidaymakers will come from Asian budget airlines eyeing direct long-haul flights to New Zealand.
AirAsia X from Malaysia is considered a front runner, having already started services from Kuala Lumpur to Brisbane, with plans to add more Australian destinations.
Long-haul budget airlines have reduced the cost of international travel by as much as half on other routes, such as Hong Kong to London.
Derek Sadubin from Sydney's Centre for Asia Pacific Aviation says Pacific Blue's arrival on the Tasman and main domestic routes is the first of a potential wave of low-cost carriers to target New Zealand in the next two or three years.
A plethora of Asian budget airlines are looking to push beyond their existing regional services to satisfy the burgeoning demand from Asian tourists.
Cheap long-haul services have the potential to revolutionise longdistance travel in the same way that budget airlines have turned domestic travel upside down.
Hong Kong's Oasis was the first to challenge the establishment on the highly competitive Hong Kong to London route at the end of 2006, offering fares as cheap as £152 (NZ$380).
Qantas budget offshoot Jetstar, which also flies to Christchurch, began flying to Japan in March selling fares of just under $700 via Sydney, little more than half the cost of a direct flight on Air New Zealand.
AirAsia X opened on Kuala Lumpur to Brisbane early last year with fares of A$179 and was an immediate hit. It has 15 Airbus A330-300 wide-body jets on order.
Mr Sadubin says the South Pacific would be key for AirAsia X to maintain its growth. "So before long AirAsia X will be in New Zealand.
"There is a huge untapped budget airline market in Asia which carriers like Tiger, Jetstar and AirAsia will have a lot of fun carving up over the next 10 to 15 years."
But while fares will be cheaper, seats will be more cramped and meals and entertainment will cost extra. AirAsia X will cram 30 per cent more seats into its new A330s in two classes by using narrower seats.
Airlines will increasingly move into two camps. Traditional fullservice carriers will target the premium market with better seats and services, leaving the no-frill airlines to chase the masses.
"It is finally recognition by the airlines of different market segments," Mr Sadubin says.
National carriers such as Qantas have set up their own budget brands to take advantage of the shift, making Air New Zealand's decision to close Freedom Air surprising, he says. While international fares will become cheaper for New Zealanders, tourism could be the biggest winner.
The Asian airlines are focusing on their home markets of more than 600 million, reducing the importance of the small New Zealand market.
"Overall they are looking to bring passengers into the South Pacific market because Australia and New Zealand are very popular destinations in Asia," Mr Sadubin says.
Tourism New Zealand chief executive George Hickton says more services will help reduce the shortage of international seats to New Zealand and help expand some Asian markets, suchas Korea and Japan, which had been in decline.
It would also open new routes beyond Asia to Europe, he says.
But the lack of frills could be an issue on the long flights to New Zealand. "People tend to view a 12-hour flight as something they might want a bit more comfort on," Mr Hickton says.
Virgin Blue chief executive Brett Godfrey agrees, and says Virgin's long-haul arm V Australia, being launched this year, will offer a range of comfort levels according to price.
Oasis Hong Kong and AirAsia X offer a basic form of business class at a fraction of the cost of their fullservice competitors.
Mr Godfrey has set a goal for Pacific Blue to be a "quite a player here within two years".
More Tasman and domestic services are planned once additional aircraft arrive during the next two months.
But, while V Australia has seven Boeing 777-300ERs on order, flights from New Zealand are still some way off. Phase two from 2010 could feature New Zealand.
AirAsia X has looked at New Zealand as a possibility for long-haul services, Mr Godfrey says.
Jetstar has ordered 15 of the new Boeing 787 Dreamliners to drive its international ambitions.
The 787 is the first big jet able to fly non-stop to Asia from Wellington's short runway, with a full load of passengers.
Wellington International Airport is trying to attract an airline willing to provide a direct link to Asia and beyond.
It claims the route is worth $13 million a year to an airline.
Jetstar is in talks with five of the biggest airports in Asia to establish a hub as a spring board to multiple tourism destinations in Europe.
But Jetstar spokesman Simon Westaway says any long-haul service from Wellington is unlikely in the foreseeable future. Jetstar is more focused on developing its trans-Tasman services and adding domestic New Zealand to the network.
Wellington airport's new chief executive Steven Fitzgerald says airlines accept the economic case put forward by the airport, but it will be case of waiting its turn for available 787s.
Air New Zealand deputy chief executive Norm Thompson says the Asian markets have traditionally been poor performers.
"It is not a market that we have ever made any money out of."
Air New Zealand pulled off the Singapore route in 2006 after 40 years and has also cut back services to other Asian ports, replacing them with services to China.
Most of the traffic going through Asian points to and from New Zealand comes from Europe.
"So I really question whether there is a market big enough for Asian carriers just to solely operate... between Asia and New Zealand," Mr Thompson says
www.stuff.co.nz/stuff/4403347a13.html
