A model Jetstar plane during Jetstar big expansion announcement earlier this year. Photo / Getty Images
Jetstar's new regional services touched down six minutes early, a counter-punch to rival Air New Zealand's advert accusing it of delays.
Jetstar said it was "amazed" at Air New Zealand's tactics, saying it showed just how much "a little competition will do".
The airline's operations centre said its new regional service took off three minutes early.
The ad run in the Herald newspaper.
The 50-seat Bombardier Q300 landed in Auckland to a full water arch welcome from fire trucks on the tarmac after its flight from Napier.
The Napier-Auckland-Nelson service will be followed next February with flights to Palmerston North and New Plymouth as the Australian-owned airline challenges Air New Zealand on regional routes that have been very lucrative, depending on the number of full fare paying passengers aboard.
Air New Zealand responded by dropping fares to match Jetstar's $9 introductory offers, announcing additional new planes.
But it is the advert running in today's Herald that signals just how rough the fight between the two airlines will be.
The advert, a nod to Pinocchio's nose when telling lies, showed a Jetstar jet with an elongated nose accompanied by Jetstar's statement "We're New Zealand's most punctual domestic airline".
The departure data by both airlines is a source of friction between them with disagreement over how they're reported and debate over the validity of comparing the much bigger Air New Zealand with Jetstar.
The Australian airline started flying main trunk jet routes in 2008 and although its entry was marred by poor initial on time performance, it has improved since. It says it has trialled routes and built slack into its regional services to try and avoid teething problems.
Politicians at national and local level have welcomed competition on regional routes which they say will help businesses cut costs and make travel for families easier.
A Jetstar spokesman disagreed with Air New Zealand's take on on time departures.
"Air NZ has finally dropped their fares on regional routes and now they are promoting our regional airline, although they haven't got their facts right. It's amazing what a little competition will do,'' he said.
Jetstar was proud of its focus on punctuality and reported results each month on its website, which Air NZ had stopped doing, the spokesman said.
"We'll respond as we always do - by bringing our low fares to more Kiwis than ever before."
Jetstar's first flight out of Nelson will take off into rainy skies today headed for Auckland.
The flight is the company's first out of the city since it announced in September it would connect Nelson with Auckland and Wellington. The Wellington flights will begin on February 1.
The routes are part of Jetstar's new regional network which will see low fares for five routes between New Plymouth, Nelson, Napier, Palmerston North, Auckland and Wellington.
To celebrate the new routes Jetstar offered $9 one-way fares for a limited time. Regular one-way lead-in fares between Nelson and Wellington are $45 and between Nelson and Auckland are $49.
Jetstar now take the total number of airlines flying out of Nelson to six, and Nelson Airport chief executive Rob Evans has said that would be good for the customer.
He has said Jetstar's announcement to fly 27 Nelson-Auckland flights and 21 Nelson-Wellington a week was a "game-changer".
One month after commencing flights between Dunedin and Queenstown, Kiwi Regional Airlines has announced it will be ceasing these services, with the last flight on 30th November 2015.
Kiwi’s CEO, Ewan Wilson, said, “The services to Queenstown have been extremely challenging for our company, with a combination of several weather-related cancellations and low passenger bookings making it unsustainable for this service to continue.”
“This is in marked contrast to our services between Dunedin, Nelson and Hamilton, which have all exceeded expectations for the first month of operation, leading us to look at new regions for expansion into in the future, such as Hawkes Bay, Bay of Plenty and Taranaki.”
“Like most private companies in New Zealand, Kiwi operates without any Government or overseas backing, and cannot afford to subsidise operations that are not financially viable.”
“We made a commercial decision to end the scheduled Queenstown flights before they affected the performance of our whole company, but we have left it open to return to the city at a future date, for charters or potential alternative scheduled services.”
“All passengers who have booked on Queenstown flights after 30th November will be offered full refunds or other alternative arrangements by Kiwi, and are being contacted this week.”
“Staff and contractors affected by this decision have already been contacted by company management.”
Planes and ferries have been cancelled in Wellington as gusts of more than 144kmh slam the lower North Island.
Five arrivals to Wellington Airport have been cancelled so far, including one from Queenstown and one from Rotorua.
Five departures from the airport had also been cancelled, and other flights were delayed or diverted to Palmerston North and Paraparaumu.
An Air New Zealand spokeswoman confirmed the numerous delays in and out of Wellington Airport were caused by the wind. She could not say how many passengers were affected.
A Wellington Airport spokeswoman said international flights were operating as normal.
The airport would be updating travellers throughout the day.
Wellington's East by West ferry has cancelled its Seatoun service and restricted sailings to Eastbourne. Ferries now leave Wellington for Eastbourne at 4.30pm, 5.30pm, and 6.30pm.
An Interislander spokesperson said ferries were running to schedule but, with winds of more than 135kmh in Cook Strait, passengers were having to stay inside.
"With these extremely high winds, as a safety precaution, we have closed off the outside deck [and] viewing areas to ensure passenger safety," Interislander general manager Mark Thompson said.
Bluebridge ferries were also sailing on time.
NZTA has a wind warning out for the State Highway 2 Rimutaka Hill Rd and says motorcycles and high-sided vehicles should take extra care on the winding route between Wairarapa and Hutt Valley.
MetService data shows that Mt Kaukau above Wellington gusted to 135kmh on Friday morning, while Kelburn reached 130kmh, the Rimutaka summit reached 144kmh, and Wellington Airport reached 102kmh.
MetService has a warning for severe northwest gales for Wellington through Friday.
The Fire Service had been called to getaway roofing iron and a blown away trampoline in the Hutt Valley suburb of Wainuiomata.
Air New Zealand's CEO Christopher Luxon, winner of the Executive of the Year title.
"There is a mission and purpose that I've signed up for that is bigger than myself," says Air New Zealand chief executive Christopher Luxon, when asked to describe his core leadership values.
Luxon, the 2015 Deloitte Top 200 Executive of the Year, is very clear about his success being underpinned by a strong team.
"The most important part of it actually is the casting of the leadership team and I'm really proud of the leadership team we have in place," he says. "My job is just to be the best leader I can be in a team of great leaders."
But there is no doubt Luxon, who is now four years into his time at Air New Zealand, has made an enormous personal contribution to the company and big impact on the local business scene.
After serving as Group General Manager International he took over as chief executive from Rob Fyfe in January 2013.
"You can't deny that Air NZ's financial performance and increase in profitability has coincided with Christopher taking on the role as CEO," says Award Judge Cathy Quinn, chair at Minter Ellison Rudd Watts. "Airlines are seen as difficult business to run profitably. Air New Zealand faces big and large competitors with deep pockets."
See video: CEO of the year
It has been a good run financially, Luxon says. "We've had three or four years of record results and expanding profits. The market cap of the company has almost tripled over the past three years."
In August the airline announced a net profit of $327 million in the 12 months to June, up 24 per cent on the same period last year. Its pre-tax normalised earnings were $496 million, up 49 per cent on the previous year.
But financial results are only one part of it, Luxon says.
"A lot of it is about: how do we take those profits and pour them back into the company to enhance the customer proposition and the culture of the company? When we look at the cultural metrics of how we perform and the customer service metrics as well as the commercial performance those are the three lenses by which we measure success."
Luxon's has been deft at balancing the softer aspects of the good practice with hard-nosed decision making.
We have raised ambition for this company. But we can't do it on our own, so we're working with our union partners in a very different way, we're working with the tourism industry in quite a different way and we're working with our trade partners in a different way.
"Christopher is a CEO who is seen as being willing to face the hard issues, talk about them and be willing to look for win win solutions where possible," Quinn said. "For example, his being willing to front that some routes just do not make business sense to operate unless more demand can be created. Christopher has talked to some regions about their attracting more tourism by holding events in the shoulder season -- that is good for the regions, Air NZ and its customers."
Luxon, 45, grew up in Christchurch and made his name on the international business stage. He rose through the ranks at global food and consumer goods group Unilever -- a company he joined after completing his MBA at Canterbury University.
Prior to joining Air New Zealand he was president and CEO of Unilever Canada.
See video: Red carpet with Holly Ryan
In the face of widespread technological disruption of the business world, Luxon says he feels happy to be in a business that knows exactly what it will be doing in five or 15 years.
"We know we will still be an airline and fundamentally the aircraft technology won't change a lot over that time."
But the company this year appointed a chief digital officer and Luxon says the big tech challenge is around how the company interacts with its customers.
Collaboration with the wider business community is also something Luxon has pushed during his time leading Air New Zealand.
He is widely seen as a leader who has engaged with other participants in the sector with a view to improving the experience of tourists to New Zealand, Quinn says.
The company takes a lead role in promoting New Zealand as a tourist destination and has made a big impact marketing itself around high profile Kiwi icons like the All Blacks and the Hobbit movies.
"We have raised ambition for this company. But we can't do it on our own," Luxon says. "So we're working with our union partners in a very different way, we're working with the tourism industry in quite a different way and we're working with our trade partners in a different way."
"I go around the world and people tell us we shouldn't exist anymore. But we do exist because we have tremendous support from the New Zealand people.
"All of Air New Zealand's success is owned by many many people." - Liam Dann
Air New Zealand has introduced a world first for children flying unaccompanied, giving parents and guardians the opportunity to follow the steps in their journey.
Children travelling alone on Air New Zealand services will now receive an Airband™ at check-in as part of the service. The wristband is embedded with a chip which is scanned at key stages of the journey to trigger text notifications to up to five nominated contacts.
Air New Zealand General Manager Customer Experience Carrie Hurihanganui says Airband is a great example of the airline investing in technology to enhance the customer experience.
“We know that having your child travel on their own can be a nervous time for both children and their guardians. While our staff have always taken great care of children travelling solo, we identified that there was an opportunity to enhance the experience for kids while at the same time giving caregivers further peace of mind and visibility of their journey,” says Ms Hurihanganui.
“We believe this is the first time this type of technology has been used by an airline anywhere in the world for the purpose of providing caregivers greater peace of mind when their child is travelling alone. We have been trialling it across our network over recent months and the feedback from parents and guardians has been very positive with many welcoming the additional reassurance of knowing where in the journey their child is.”
Air New Zealand is the only carrier in New Zealand offering a service for children travelling alone.
The airline’s new service applies to all children aged between five and 11 who’re travelling alone – but those aged up to 16 years can choose to opt in.
The new service is being offered on a complimentary basis through until 3 February 2016. Bookings made from this date will incur a fee of $15 per child for each one way domestic journey, or $40 per child for each one way international journey applies.
Air New Zealand will cut flights between Christchurch and the Kapiti Coast, due to a lack of demand.
The Kapiti Coast Airport to Christchurch route had been operating at a loss since it was launched two years ago, a statement from the airline said.
"Unfortunately the Paraparaumu to Christchurch route has been operating regularly at little over half full and that's simply not sustainable long term," group general manager for New Zealand and Pacific Islands Louise Struthers said.
The airline was increasing return services on the more popular route between Kapiti and Auckland by two per week, to a total of 16 weekly flights.
Struthers said this would create more opportunity for customers to connect via Auckland to the rest of the airline's domestic and international network.
Air New Zealand launched the daily service between Kapiti and Christchurch in November 2013 using 50-seater Bombardier Q300 aircraft.
At the time, Kapiti Coast Airport chairman Sir Noel Robinson said it was a big step forward and would boost tourism in the district.
"For the international traveller, it means they can come to Kapiti before going to the South Island, instead of going to Wellington and missing Kapiti out."
Kapiti Mayor Ross Church said he was disappointed to see the Christchurch service go, "however there simply hasn't been the demand we had hoped for".
"Kapiti residents accounted for 93 per cent of the total seats booked so our people were using the service – but flights that are regularly only half full aren't sustainable."
He said the council had worked with Air New Zealand to promote the service.
"We did raise concerns that the late morning flight from Kapiti and early afternoon return made the route unattractive to business commuters. Unfortunately Air New Zealand was unable to accommodate different times within their schedule."
The last Paraparaumu to Christchurch service will be on February 28. Passengers already booked on services beyond that date will be given the option of flying via Wellington or Auckland, or receiving a full refund.
Flights from Paraparaumu to Auckland started in October 2011.
Changes to security rules for domestic flights in New Zealand are likely due to the rising risk of a terrorist attack, Transport Minister Simon Bridges says.
Global aviation security rules have been under scrutiny since a bomb brought down a Russian passenger plane over Egypt's Sinai Peninsula last month, killing all 224 people on board.
Russia's FSB security service said on Wednesday (NZT) that a bomb had brought down the plane, and the Islamic State terrorist group later released a photo of the bomb that it said had been used in the attack.
The device Islamic State claims brought down a Russian airliner.
Terror attacks in Paris last week which killed 129 people have also created unease around the world about the rising threat of terrorism.
Bridges said the Government had started a review of domestic aviation security arrangements last year, after New Zealand's terror risk level was upgraded.
He did not want to pre-empt the review's findings or discuss any "particular vulnerabilities" that there could be, but said the Government was not aware of any specific flaws with the security of domestic flights.
The review would cover a wide range of potential aviation security risks and was likely to lead to changes by next year, Bridges said.
"It'll look at everything from cabin crew through to the baggage, the cargo, the catering, obviously the ground crew and the like on the ground, and I think change is likely."
He denied the current security arrangements were "lax", but said the Egypt bombing and terrorist attacks in Paris meant it was prudent to look at changes.
"I don't think it's been lax - I think it's been appropriate, if you like, proportionate for where we've been, but what is true is the risk level has elevated somewhat at the end of last year.
"We're not aware of specific threats or risks in relation to New Zealand so the risk level hasn't changed [since the bombing] but we're only human...so we do need to make our way through [the review]."
An Air New Zealand spokesperson said they worked closely with the government and would adapt their security practices if advised to.
"Naturally we always comply with security standards set by New Zealand and international regulators and we welcome working with the government on any potential enhancements to safety and security for the benefit of our customers."
Cheaper flights will tempt more Kiwis to visit Disneyland.
The long-awaited airfare war between New Zealand and the United States has taken off and is being welcomed by the Kiwi travel and tourism industry.
More Kiwis will be heading to Disneyland after American Airlines confirmed yesterday that it will start flying between Los Angeles and Auckland from June next year. Air New Zealand reacted by cutting its airfares to Los Angeles from about $785 to $499.
Doug Parker, chief executive of American Airlines, the world's biggest airline, said fares had not yet been set but they would be competitive.
The new service, which involves daily flights on a Boeing 787 Dreamliner for much of the year, will need regulatory approvals.
Air NZ operates 18 return services a week from Auckland to Los Angeles, a daily service from Auckland to San Francisco, four services a week to Vancouver, Canada and four services a week to Honolulu, Hawaii.
From December 15, Air New Zealand will also start direct services from Auckland to Houston, Texas five times a week.
American Airlines had been scouting the New Zealand market this year after deepening an alliance with Qantas.
Pukekohe man Ben Smith, who is doing his PhD in social psychology at the University of Southern California, said it was "great news". "If the prices really drop ... that would make it much easier for me."
Transport Minister Simon Bridges announced yesterday that he had authorised the alliance in New Zealand. "This new service will give more choice and lower fares for travellers on the Auckland to Los Angeles route," he said.
Flight Centre said the new route meant a greater choice for customers.
House of Travel called it a "game-changer". Its commercial director Brent Thomas said the new flight route meant Air NZ no longer had the monopoly on the American market, and that this was bound to lead to more competitive airfares across the Pacific.
About 140,000 Kiwis travelled to the US for holidays each year but he expected that to rise by about 15 per cent as capacity increases and airfare prices go down.
Air NZ has been the only airline offering direct flights to Los Angeles after Qantas pulled out of its loss-making service three years ago.
Chief executive Christopher Luxon said increased competition on the route was not unexpected.
"We're ready for it and we look forward to it."
Auckland Airport also welcomed the announcement and estimated that it would boost seat capacity between the two countries by 16 per cent and contribute $199 million a year to the New Zealand economy.
Chief executive of the Tourism Industry Association, Chris Roberts, said the American Airlines route will grow the valuable US visitor market to New Zealand and encourage American travellers to see more of New Zealand by offering connections with JetStar's growing regional network.
American Airlines
• To start flying daily for much of the year from LA to Auckland from June.
• Has not yet set fares.
Air NZ
• 18 return services a week from Auckland to LA, daily flights to San Francisco, four services a week to Vancouver and four to Honolulu, and from next month will start direct services to Houston five times a week.
• Has slashed airfares to Los Angeles from about $785 to $499.
Air New Zealand says a technical issue affecting check in for flights worldwide has now been resolved.
The airline said earlier this morning said it was "actively investigating the cause and a further update will be provided when more information is available".
A new release just through says "Air New Zealand has resolved the technical issue which affected check in for flights earlier today. Air New Zealand thanks customers for their patience while it has worked to resolve the issue."
An Auckland Airport spokesman said there had been "very little impact on Auckland Airport's operations as a result of the technical problem."
Manual check-in was still available at airport counters however customers were told they "may experience delays checking in for their flight and are advised to allow more time to complete check-in until the issue is resolved."
People travelling at Auckland Airport said on Twitter there had been long queues for the manual check in counter.
The queues were completely clear by 10am, with some jet setters expressing relief they weren't caught up in the wait.
One couple traveling to Perth said they did not have to wait at all.
They did not see the queues.
"We just missed it apparently, the Air New Zealand woman just told us.
"We're lucky. You don't want that when you're flying."
Two Air New Zealand staff members were helping the handful for remaining passengers check in at machines.
The rest of the check in area - including about 50 self check in stations - was clear of waiting passengers.
Carole Wilson and her family had left plenty of time to get to the airport from Orewa for their afternoon flight today.
She said she had not heard about the queues but was happy they missed them.
"Very lucky we came early," she said.
"The traffic was way back at Oteha as well but we just flew by in the bus lane."
An Air New Zealand employee, who was working during the rush, said there was not too much delay for passengers.
The manual check-in system was able to get passengers through just as fast as the self check-in systems, he said.
There was a small queue as people realised the self check-in machines weren't working but it cleared fast, he said.
The biggest biological science conference in the country is heading to Nelson next year after being hosted for more than two decades in Queenstown.
Queenstown Research Week, which has been held in the southern lakes region for the last 25 years, will be held in Nelson for the first time in August.
Conference co-ordinator Peter Shepherd said the only venue in Queenstown big enough to hold the conference was undergoing renovations next year so they had to find an alternative venue.
It's grown to a point where last year, over the whole week we had 10 different meetings running consecutively, said Shepherd.
More than 1200 people attended this year's conference and Shepherd expected that number to grow.
Queenstown Research Week co-ordinator, professor Peter Shepherd.
The week consists of co-ordinated but independently run meetings that cover a range of areas of science including the New Zealand Medical Sciences Congress and the Australasian Society of Clinical and Experimental Pharmacologists and Toxicologists.
Next year's conference will be made up of 13 different meetings that cover a wide range of topics, including plant research through to cancer, stem cells and heart disease amongst others.
The concept to host them at the same time developed from three different iconic New Zealand scientific meetings each of which were held annually in Queenstown.
"Nelson appealed because of the connectivity via Nelson airport and the competition with new airlines, makes it a bit more of a feasible place to have large meetings."
The conference centre at the Rutherford Hotel also provided suitable facilities to accommodate the growing event.
The recently introduced direct route between Dunedin and Nelson meant scientists from the University of Otago could easily make it to Nelson.
Shepherd said he had received a very enthusiastic reception from local tourism agencies and high schools to bring some high level science to the region.
"I think the people of Nelson are a very intelligent and literate bunch and are interested in attending the public events."
He said all of those things added up to Nelson being a fantastic alternative for the conference next year.
A number of events will be open to the public and students during the week including one with Nobel prize winner and developmental biologist professor Sir John Gurdon.
Air New Zealand has hinted the Philippines is also on its radar, on the same day it announced it would fly to Vietnam.
From June to October, 2016 Air New Zealand will fly three times a week from Auckland to Ho Chi Minh City's Tan Son Nhat International Airport with the potential to expand the season in subsequent years.
Air New Zealand chief strategy, networks and alliance officer Stephen Jones said the Philippines was also "a market of interest" for the airline.
"It's a big market, it's growing, there's a lot of Filipinos in New Zealand," Jones said.
There was also strong two way traffic between New Zealand and the Philippines, he said.
Air New Zealand has previously said it was evaluating at least one other long haul route for launch in 2016.
Kiwi travellers will soon have direct access to Vietnam.
In December Philippine Airlines will start flying to Auckland from Manila, operating four days a week using an Airbus A320 with a stopover in Cairns, Australia.
Air New Zealand would service the non-stop 11 hour Vietnam flight with a 224-seat Boeing 767-300 aircraft but may eventually upgauge to a 302 seat 787-9 Dreamliner, Jones said.
Airfares had not been set but prices would be competitive when they go on sale early in 2015, he said.
He expected outbound New Zealand travel to Vietnam would make up about 85 per cent of passengers on the route.
A small team of less than 10 Air New Zealand staff would be on the ground in Vietnam.
Transport Minister Simon Bridges congratulated Air New Zealand on New Zealand's first ever route to Vietnam.
"I think it's an inspired choice" Bridges said.
Vietnam was an important market for New Zealand exports including agriculture, horticulture, energy, tourism and aviation trade, he said.
Bridges said earlier this year he signed an air services agreement with Vietnam's Ministry of Transport which "liberalised things" enabling direct flights and codesharing between the two countries.
The Government was interested in signing more air services agreements with Pacific rim countries.
"One of the areas that's got a huge amount of potential legs is Latin America."
With Air New Zealand launching flights to Buenos Ares in December the Government would like to make flights to other Latin American countries possible, he said.
Prime Minister and Minister of Tourism John Key said more than 15,000 New Zealanders travel to Vietnam each year a Vietnam route was likely to increase that number.
AN EXOTIC DESTINATION
Air New Zealand's chief executive Christopher Luxon said the service was significantly more convenient, and quicker than current indirect options to Vietnam.
House of Travel commercial director Brent Thomas said he expected the route to be skewed towards New Zealand outbound traffic as opposed to inbound Vietnamese.
"From our perspective, the new flight route from Air New Zealand isn't targeting those wanting to visit friends and family or travel for business purposes – it's a response to Vietnam's surge in popularity for Kiwi holidays," Thomas said.
This was supported by the fact that the route was seasonal, he said.
"If we estimate 700 seats per week are available over five months, we reckon we'll see around 10,000 Kiwis taking advantage of this new flight route and heading over to Vietnam."
Flight Centre NZ general manager product Sean Berenson said in 2015 it reported a 10 per cent increase in bookings to Vietnam, compared to the previous year.
"Traditionally Thailand and Bali have been key holiday spots for New Zealanders, particularly within the youth market, but Vietnam has been growing in recent years," Berenson said.
Statistics New Zealand figures show nearly 16,000 travellers left New Zealand for Vietnam in the 12 months to September, which was flat on the same period the previous year.
The announcement was made less than two days 48 hours after American Airlines announced it would take on Air New Zealand on the Auckland to Los Angeles route from June 25, 2016, through an alliance with Qantas, with tickets going on sale on November 23.
Air New Zealand starts flying Auckland to Buenos Aires three times a week from December 1 and Auckland to Houston five times a week from December 15.
On December 10 a new alliance between Air New Zealand and Air China begins with flights from Auckland to Beijing serviced by Air China's A330-200 aircraft.
American Airlines' planned daily service between Auckland and Los Angeles is already benefiting consumers after Air New Zealand responded by promoting a $499 one-way fare on the route, American Airlines has suggested.
American Airlines chief executive Doug Parker announced it would launch a daily non-stop service between Auckland and Los Angeles from June, in conjunction with joint venture partner Qantas.
Parker said American Airlines and Qantas had yet to work out prices, but said consumers would benefit from the "friendly competition" with Air New Zealand, which had held a monopoly on the route since 2012.
LISA MAREE WILLIAMS/GETTY IMAGES Qantas chief executive Alan Joyce.
Qantas chief executive Alan Joyce, who joined Parker and Transport Minister Steven Bridges in Wellington for the announcement, said flights between Auckland and LA were likely to be cheaper outside the northern and southern hemisphere summer seasons.
"The thing with the Pacific has always been the seasonality of it. You get parts of the year which you have to stimulate with lower airfares.
"There will be a lot more people travelling, probably on lower airfares, but we think the economics will work."
Air New Zealand responded to the move by its rivals by promoting a $499 one-way and $973 return fare between Auckland and Los Angeles on its Grabaseat website, for flights between early May and late August.
Spokeswoman Brigitte Ransom, said that while it had some sale fares to the US on its Grabaseat site on Wednesday, there had been no recent changes to its standard fares.
Air New Zealand's Auckland to Los Angeles return fares booked six months in advance cost about $2000 for economy, $4000 for premium economy and $8000 for business class.
Mike Stone/Reuters
American Airlines chief executive Doug Parker was in New Zealand for the announcement.
Flight Centre New Zealand general manager Sean Berenson said increased competition often resulted in carriers responding with lower fares.
"We're in something of a golden era of travel at the moment with many destinations being much more accessible and more competitively priced," Berenson said.
Parker said attractions of American Airline's Auckland to LA "product" would include the fact it would use its newest aircraft, a 787-8 Dreamliner, to fly the route. The airline offered wi-fi throughout the aircraft, he said, with a "flight pass" costing US$19 (NZ$29).
It expected most of its customers on the route were likely to be people from North America, travelling to New Zealand on holiday or on business, rather than New Zealanders, he said.
American Airlines would market New Zealand as a destination to its 100 million frequent fliers through direct marketing, which he expected would boost tourism and "grow the market".
"The winners here will be consumers," he said.
Joyce said Qantas planned to upgrade its airport lounge in Auckland, but not in time for the launch of the joint service.
Bridges said the service marked "the first direct, non-stop competition" between the One World and Star Alliance airline alliances on the route. "Competition, ultimately, is very good for consumers," he said.
American Airlines' aircraft will have 226 passenger seats, including 28 "lie flat" business class seats and 55 economy seats with extra leg room.
Air New Zealand flies daily to LA with about 17 return flights per week and has had a monopoly on the route since Qantas axed its Auckland to LA service in May 2012.
It uses Boeing 777-200 and 777-300 aircraft with economy, premium economy and business class seating on the route.
Parker acknowledged other American airlines had struggled to make similar services work commercially in the past. But he said the fact the travel market had got "so much bigger", the economics of the mid-sized 787-8 aircraft, and the joint venture partnership with Qantas meant he was "highly confident" the new service would be sustainable.
He and Joyce said they could partner on an additional route between New Zealand and Dallas down the track.
"We can build on the LA service over time but we need to walk before we can run, and demonstrate we have digested the Auckland-LA and Sydney-LA markets successfully. When that happens we will be looking at expansion opportunities."
Tourism Industry Association chief executive Chris Roberts said the US market was growing at 11 per cent a year, with 237,000 visitors arriving to New Zealand in the past year.
Their total spending was an estimated $967 million a year.
"The US is our third biggest visitor market and they enjoy what we have to offer," Roberts said.
Make no mistake; the gloves are definitely off again in the transtasman battle between Air New Zealand and Qantas which now has the biggest airline in the world to do some heavy hitting.
There was a bit of good humoured japery over Rugby World Cup bets resulting in Qantas staff having to wear All Black supporters kit across the Tasman (although it wasn't such a hardship - that part of the Australian airline is registered here and crewed mainly by Kiwis) but confirmation of reports in the Herald that American Airlines will fly from Auckland to Los Angeles restores normal service in the transtasman rivalry.
Although the US airline is supplying "the metal" - in this case a near new Boeing 787- to fly across the Pacific this is very much a Oneworld alliance proposition - Qantas is a driving force. It fits with the Australian airline's aggressive stance here in New Zealand and now in American Airlines - the world's largest carrier by traffic - it has giant ally.
As American Airlines chief executive Doug Parker says his airline wouldn't have been heading here without the support of Qantas and its chief executive Alan Joyce. Parker says there is room for both Air New Zealand and American - most of his customers will come from the US among its 100 million frequent fliers.
But direct flights to the US have been Air New Zealand's domain for the last three years. There are more indirect flights now but as one analyst has said every day Air New Zealand has the direct route to itself is a good day for Air New Zealand.
Even signals by American that is interested in New Zealand have sent the Air New Zealand share price reeling, a reaction that is probably overdone.
Air New Zealand is also in record profit territory, growing its longhaul services quickly and in good shape to respond to a competitive threat.
Qantas subsidiary Jetstar is about to challenge Air New Zealand in another part of what has been its territory for longer - regional routes that can at worst be big money losers and at best, lucrative. Joyce said with its growing network through Jetstar in New Zealand, there will be a link from Dunedin to Disneyland.
Qantas was in dire financial straits two years ago but has enjoyed a remarkable turnaround thanks long overdue restructuring of its long-haul operation (now back in growth mode) and much cheaper fuel.
The same goes for American Airlines - in even worse shape 18 months ago, but now reporting record profits so is retooling its fleet and is on the expansion trail as well.
Air New Zealand is also in record profit territory, growing its longhaul services quickly and in good shape to respond to a competitive threat.
As chief executive Christopher Luxon has said on the back of impregnability at Eden Park, "we don't lose to Aussies at home.''
It will be a tough scrap with an outcome difficult to predict. But with Air New Zealand slashing some fares to below $500 already there's one guaranteed winner -the traveller.
It dropped fares sharply and quickly on regional routes and will pour more brand new aircraft into the regions during the next five years - showing it will not give up without a fight.
The same has happened already in the face of competition across the Pacific. Its own deepening alliance with United Airlines will help and expect fares will continue to come down sharply at times.
Airlines from the US have been in the New Zealand market from time to time and for different reasons come, then gone. American's alliance with a powerful player in Qantas will allow it to put down stronger roots and it now has better, more efficient planes.
It will be a tough scrap with an outcome difficult to predict. But with Air New Zealand slashing some fares to below $500 already there's one guaranteed winner -the traveller.
Air NZ's first South American route has been years in the planning, reports Grant Bradley.
The route is a commitment worth hundreds of millions of dollars.
Air New Zealand will early next month take a big leap into what has long been a tempting blank spot on the map.
It begins flights to Buenos Aires after five years of scouting South America, a service it says will make money from the get-go, but one that has been its most challenging long-haul route to set up. The route is a commitment worth hundreds of millions of dollars.
Argentina lived up to its reputation as a notoriously difficult place to do business. The World Bank ease of doing business ranking for the past year puts the country in 121st place out of 189 countries (New Zealand is second) and for the airline, the masses of red tape took some getting used to.
Stephen Jones, Air New Zealand's chief strategy, networks and alliances officer, says it also took some persuasion to get his fellow executives to get the flights over the line.
"The internal business case was interesting," he says. "If you don't know much about Argentina you look at it as a high risk place, a volatile government and currency -- why would we even bother with it?"
There were doubters among the airline's eight-member executive who were worried about the risk.
"We had two holdouts so we just had to understand their concerns in a lot more depth and brought them back more evidence around those. Risk management would be particularly around the financial aspects -- how do you get your money?"
Rather than leaving a "big pile of cash there" the airline will repatriate money made in Argentina weekly.
"Other than what we spend in pesos in Argentina, we have no use for that so we need to convert that out and we might as well do that quickly -- it just is good practice."
As part of the risk assessment, the airline had to consider risk around its main financial asset in the country -- a $260 million Boeing 777.
"We've got mobile assets so it's not like putting a dairy factory over there. If the worst comes to the worst you just fly the plane home."
It sounds dramatic, but Jones says he never lost sleep about the route, which planners first started assessing in 2009 before getting serious about it in August last year.
We've got mobile assets so it's not like putting a dairy factory over there. If the worst comes to the worst you just fly the plane home.
While the airline had dipped into Argentina with a one-off rugby charter flight three years ago, the direct flights which start on December 1 are the first scheduled services to any point in South America in its 75-year history. It will initially fly three times a week to the Argentine capital of close to 13 million people but Jones is confident it will quickly build up frequency.
He says planning for Argentina began in the same way as all its route development -- studying movements of people and the type of traveller who would potentially fly with it.
Potential new routes are ranked once a month by the airline, which is hungry for growth and will expand its international business by 15 per cent over the next year. This includes opening up a new route in the United States, Houston, where five-times-a-week flights begin on December 15.
While it is focused on the Pacific Rim, Argentina, just the other side of the Andes, broadly fitted within that strategy. And with its population concentrated in the capital, it met another of the criteria.
"With Buenos Aires it's one big city that makes up most of Argentina -- whereas in India you've got 11 or 12 different cities that people want to go to. If they go to a concentrated place that's better -- the market size has to be big enough to get a minimum of three services for a wide body aircraft per week," says Jones.
There is a bigger picture in play -- New Zealand becoming something of a mini hub to link Australia and Asia to the southern part of South America.
"Historically the company thought of itself as being at the end of the world, you don't go through New Zealand to get to anywhere, but South America was one place that could change that paradigm," he says.
"There is a big unserved flow of passengers from Australasia and Southeast Asia to South America and New Zealand is uniquely positioned geographically for that because it sits better than Australia -- it is a more intermediate point."
New Zealand-based traffic will make up 40 per cent of demand, but just over a third of passengers will come from Australia.
The Argentine outbound market also has big potential. There is old farming wealth and a high propensity to travel among Argentine people with a "live for now" spirit.
"They like to travel and always have done," says Jones. "Because the currency is so volatile and depreciates a lot, there are incentives to spend now."
For route planning, competitors' behaviour is crucial. Direct flights between Auckland and Argentina finished more than two years ago after state-owned Aerolineas Argentinas spent years struggling with the route. The airline quit flying to Australia this year. Chile's LAN and Qantas are in partnership and cover the route to the Chilean capital of Santiago and beyond, so Chile was dismissed as an option.
My sense is that we'll be flying this [route] in 20 years from now.
Air NZ's Stephen Jones
Brazil was considered but turned out to be operationally challenging. While prevailing tailwinds would make it easy enough to fly there, coming back could be tricky. About 20 per cent of the time, the airline would be quite severely constrained by the load it could carry.
Buenos Aires is well with the range of Air New Zealand's 777-200ER, although as with all over-ocean flying there are contingency stops, including Rarotonga and Easter Island.
A shortage of planes had crimped long-haul growth a few years ago, but with Dreamliners added regularly to the fleet and the refurbishment of 777-200s it is now expanding quickly.
Jones says the other key part of the equation is having a strong relationship with a local partner airline. Without that, nowadays it won't fly into a country.
Aerolineas is a member of the SkyTeam grouping of airlines and Air New Zealand is a member of the Star Alliance, and while airlines find it easier to work within their alliances, they make exceptions for commercial reasons.
Last year Jones went to Aerolineas with a proposition: "We would like to work with you to allow you to serve that market but using Air New Zealand metal and in return we would like your support to come into your market."
He says the Aerolineas executives "took a bit of talking around" but they could see the opportunity.
The Argentine airline has suffered more than its fair share of volatility in a volatile industry, has high labour costs and after being renationalised in 2008 has been subject to political interference. However it is revamping its fleet and Jones says it has "good commercial people who are easy to work with so we've developed that relationship.
"But it's a lot of face-to-face time -- you can't do it over the phone or email. You go over there and build trust and explain to them the business case and ultimately being prepared to commit to go and fly there."
The air services agreement between New Zealand and Argentina had to be extended and Air New Zealand had to satisfy safety and financial regulators.
Jones says Aerolineas' support has been crucial in helping Air New Zealand negotiate the bureaucracy in Argentina, where much commerce is still paper-based. All Air New Zealand documents had to be translated into Spanish, notarised and stamped by both governments.
Under the code share deal, Air New Zealand passengers will be able to be booked on Aerolineas flights throughout South America.
Air New Zealand is building up a team of as many as 15 people in Argentina -- much larger than would normally serve a three-times-a-week service -- because of the complexity. It is led by locals with wide airline experience.
Route planning
How airlines decide where to fly next:
• There has to be a growing market -- preferably a large population concentrated in one city and one which can fill the lucrative premium cabins.
• They can't survive where the existing competition is too dominant.
• They have to have the right planes -- for Air New Zealand the arrival of its Dreamliners and refurbishment of 777s has finally freed up long-haul capacity.
• They like to work with a local partner; an amenable Aerolineas Argentinas in a rebuilding phase made this possible for Air NZ.
"It's important to have people who know their way through the system there -- we could blunder around [by] sending well-meaning Kiwis over there," says Jones.
He says airlines which have gone in without local partnerships had found air bridges missing and gates changed at short notice.
Air New Zealand's chief sales and commercial officer Cam Wallace says there was strong support for the service here and in other countries.
"We're getting strong support from Australia, particularly New South Wales and Victoria, good penetration out of the South American market because New Zealand is a hot market."
But there is still a lot of work to do in Argentina. In a listing of the places Argentines want to visit, New Zealand ranks 48th.
Because the currency is so volatile and depreciates a lot, there are incentives to spend now.
Wallace says the rugby link could be cultivated, particularly among school or club rugby teams which have traditionally tended to visit South Africa.
The managing director of Flight Centre, Chris Grieve, says agents welcome the new service, which has been popular and has already led to lower fares. LAN has had the route to South America through Auckland to itself since Aerolineas pulled out.
"Competition is a good thing and that was evident at our travel expo in August where we had Air New Zealand and LAN offering return airfares to Buenos Aires for $1200, where previously they had been more than $2000 and up to $3000," he says.
Not all fares are going to be sold at that level but it opens up a lot of opportunities for our travellers to get to South America.
The area has been popular with younger travellers but is growing in popularity among baby boomers who can use Argentina as a launchpad for Antarctic excursions or going to Machu Picchu in Peru.
Jones says Air New Zealand is committed to the route.
"I would say three years is a reasonable sort of time. By that stage you've given it a lot of effort. You've got to know the market quite well -- if you're not well on track to being profitable by then there's a problem," he says.
"My sense is that we'll be flying this in 20 years from now and it will be a long term profitable business."
Dreams of an air fare war between New Zealand the United States have been realised, with Air NZ today slashing its airfares to Los Angeles just as American Airlines confirmed it will start flying here in June.
Air NZ has cut grabaseat fares to Los Angeles to $499 from around $785. American Airlines chief executive Doug Parker said it hadn't set its fares yet but said it would be competitive.
The airline is the world's biggest and will use a Boeing 787 Dreamliner on the route -
breaking Air New Zealand's stranglehold on direct services between Auckland and the United States.
The service, which involves daily flights for much of the year, will need regulatory approvals.
Air New Zealand CEO Christopher Luxon said increased competition on the route was not unexpected.
"We're ready for it and we look forward to it."
Competition was a good thing and more direct flights would grow traffic and the whole New Zealand tourism market, he said.
The key issue was the sustainability and stability of new routes and services.
"Air New Zealand is here for the long term," he said
Air New Zealand's share price dipped by as much as 19c from $2.85 yesterday following news of the announcement by the rival carriers.
That mirrored a fall in June when American flagged its intention to begin flights to New Zealand, when it announced it was returning to Australia with a Sydney-Los Angeles service starting next month.
American Airlines has been scouting the New Zealand market this year after deepening an alliance with Qantas. Direct services from New Zealand to the United States now brings competition to the market which has been missing since the Australian airline withdrew from its Auckland-Los Angeles service in 2012.
See the NZ-Pacific air routes here:
In an application to New Zealand's Ministry of Transport earlier this year, the airlines said an expanded alliance across the Pacific would directly benefit New Zealand passengers and they expect more competitive air fares.
In that submission, the airlines said the increase in flights between Australia and the United States - and the possibility of flying directly from New Zealand to the US - would result in a "strong and swift reaction "from competitors.
"Particularly Air New Zealand, Virgin Australia/Delta Airlines and United who will fight to retain and gain passenger share."
The expansion of the alliance has been given interim approval by the Australian regulator - in spite of objections by Air New Zealand and Hawaiian Airlines - and has been considered over the last three months by the New Zealand ministry because of the potential impact on this market.
Flight Centre said it would welcome any new route.
"Greater choice for our customers is a good thing and likewise having more choice, particularly on popular routes, is always good news for travellers."
A quick online survey of airfares across the Pacific shows Air NZ's dominance of the route:
Air New Zealand has had direct flights to itself since Qantas pulled out of a loss-making Auckland-Los Angeles service three years ago.
While the number of indirect flights between Auckland and the US mainland has grown, Air New Zealand benefits strongly from no having a direct flight competitor.
When American Airlines said in June it would investigate direct flights to New Zealand Air New Zealand's share price took a hammering, although it has recovered since.
Air NZ is also facing increased competition on its popular Vancouver route, with Air Canada announcing flights from the Canadian city to Brisbane.
United Airlines, Air New Zealand's Star Alliance partner, last month announced it was planning to return to New Zealand operating a three times weekly 787-8 service between San Francisco and Auckland from July, moving to daily services with a larger 787-9 aircraft from next November.
United pulled out of flying to New Zealand in 2003 after it was forced into what was then the airline industry's biggest bankruptcy.
Air New Zealand operates a daily service from Auckland to San Francisco, 18 return services per week from Auckland to Los Angeles, four services per week to Vancouver and four services per week to Honolulu, Hawaii.
From December 15 the airline will also start direct services from Auckland to Houston five times per week
Air New Zealand has announced it is in the final stages of evaluating two new long haul flights - but where to exactly?
"We look forward to putting our brand and that of our nation on the map in at least two new international destinations for the airline next year," spokesman Stephen Jones said.
Expecting to make an announcement on the first route before Christmas, he said he is confident that Kiwis will really embrace it.
House of Travel retail director Brent Thomas said the long-haul flights might be somewhere in the Pacific Rim.
"Air New Zealand is building an airline that's servicing the Pacific Rim and point-to-point flying," he said.
He expects the airline would have done a significant amount of study to make sure the routes would be viable, purely based on the cost of setting them up.
Speculating on where it might be going, he said it could be a seasonal flight like their flights to Bali - but we would all just have to wait and see.
With more international carriers coming into New Zealand bringing passengers, he said passenger growth had increased by five per cent.
Air New Zealand was looking for different routes to grow their passenger base and also bring more people into our "beautiful country", Thomas said.
Air New Zealand's Buenos Aires and Houston services commence operations next month.
New Zealanders can expect a "major announcement" from alliance partners Qantas and American Airlines on Wednesday.
Both Qantas chief executive Alan Joyce and American Airlines chief executive Doug Parker will visit Wellington for the announcement which Transport Minister Simon Bridges will also attend.
House of Travel commercial director Brent Thomas said there were rumours the two Oneworld airlines could be launching a direct codeshare service from New Zealand to the United States.
Air New Zealand has a monopoly on direct flights from Auckland to Los Angeles and San Francisco and, from December, Houston.
It also flies Auckland to Honolulu along with Hawaiian Airlines.
When new carriers entered a route on which there was no competition previously consumers benefited through lower airfares and greater choice of products, Thomas said.
From July 1 United Airlines will also start flying three times a week from San Francisco to Auckland with a 242-seat 787-8 aircraft.
In December Qantas launches a new flight between Sydney and San Francisco and American Airlines launches flights between Sydney and Los Angeles.
Air New Zealand has also said it was in the final stages of evaluating two new long haul routes, one of which was expected to be announced before Christmas.
Centre for Aviation analyst Blake Moore said he expected American Airlines to announce it would fly its 787 Dreamliner on the Auckland to Los Angeles route as part of its alliance with Qantas.
Thomas said it would be interesting if American Airlines and Qantas launched a service on a route which Air New Zealand had a monopoly on, such as Los Angeles.
"Los Angeles is a gateway for New Zealanders to mainland USA," Thomas said.
Increased capacity on a route encouraged more people to travel, he said.
"Airlines have to price at a level that creates the demand to fill certain parts of the plane."
Thomas said it was also possible Qantas and American Airlines would announce a trans-Tasman codeshare service.
More Americans were travelling to this part of the world as the US dollar strengthened against the kiwi and aussie dollar, he said.
That meant more American tourists would be visiting Australia and wanting to cross the Tasman to New Zealand on their trip as well.
Air New Zealand's decision to buy 15 new ATR72-600 aircraft will result in lower regional airfares.
Air New Zealand chief executive Christopher Luxon said the new 68-seat planes would replace the airline's 11 older ATR72-500s.
The purchase would increase Air New Zealand's total ATR fleet by four to 29, adding an additional 600,000 seats into regional New Zealand each year.
Luxon said to fill those seats Air New Zealand would need to stimulate demand in the regions by lowering prices and driving tourism through events.
"The bottom line is it's going to be a very good deal for customers," Luxon said.
At list prices the new aircraft are collectively valued at US$375 million (NZ$569m).
In 2012 the airline announced it would buy 14 ATR72-600 aircraft - seven have been delivered with the remaining seven due to join the fleet by mid-2016.
The additional 15 aircraft would begin arriving from late 2016.
Air New Zealand also operates 10 19-seat Beech 1900D and 23 50-seat Bombardier Q300 aircraft.
It has been flying ATR aircraft since 1995 and the ATR72-600 is the third model it had flown, Luxon said.
"They're just perfectly designed for New Zealand."
The company would sell its ATR72-500 fleet, Luxon said.
In April Air New Zealand made major cuts to its regional network, ending services to Kaitaia, Whakatane and Westport. Whangarei to Wellington, Taupo to Wellington and Palmerston North to Nelson routes were also scrapped, with Hamilton to Auckland ending in February.
The routes, which were served by Beech aircraft, were losing $1 million a month.
As a result of the cuts Air New Zealand would be looking to sell its Beech fleet.
Luxon said the airline would not be revisiting those regions with ATRs.
"The structural economics of those towns and those regions means that we have committed that we will not be going back into those towns."
On routes which were previously serviced with Beech aircraft but were now serviced with a Q300 Air New Zealand had achieved a lower cost per seat, resulting in a 15 per cent fare reduction, Luxon said.
"We've already had several towns make that transition."
Air New Zealand shares closed up 4 cents on Thursday at $2.84.
ATR chief executive Patrick de Castelbajac said the ATR-600 delivered good economics.
It also featured improvements for passengers including overhead compartments which held 30 per cent more luggage than the ATR-500s.
Cabin noise had also been reduced by improving the synchronisation of the twin propellers resulting in less vibrations, he said.
The other big difference was in the cockpit, which de Castelbajac said described as one of the most modern in aviation.
Avionic improvements allowed the aircraft to perform a range of approaches which could save on fuel, he said.
Prime Minister John key, who was at the announcement at Air New Zealand's Engineering and Maintenance base at Auckland Airport, said tourism in New Zealand was booming with about 3 million tourists visiting each year.
The new ATRs would benefit regional New Zealand because more international and domestic tourists would be willing to fly to the regions with increased flight frequency and more affordable fares, he said.
A model Jetstar plane during Jetstar big expansion announcement earlier this year. Photo / Getty Images
Air New Zealand will cut flights between Christchurch and the Kapiti Coast, due to a lack of demand.
Cheaper flights will tempt more Kiwis to visit Disneyland.
Make no mistake; the gloves are definitely off again in the transtasman battle between Air New Zealand and Qantas which now has the biggest airline in the world to do some heavy hitting.
