Qantas ‘invades’ NZ with Jetstar

Although long anticipated, this morning’s announcement that Jetstar will invade the tiny New Zealand domestic market means it is backs-to-the-wall time for Air New Zealand.

To summarise bluntly, Qantas has wanted Air NZ either dead or stuffed or under its complete control for a long time. The ’stuffed’ scenario is looking strong today.

Air NZ domestic services have long demonstrated fares that seemed to reflect effective monopoly pricing. This situation was smashed by the launch of Pacific Blue domestic services more recently after parent Virgin blue literally plucked four brand new 737s out of the sky and diverted them to the land of the long white cloud for the exercise shortly before they were supposed to add to its Australian domestic fleet late in 2007.

Between Virgin Blue and Jetstar, trading conditions for the predominantly government owned NZ flag carrier have turned miserable.

One interpretation of this morning’s announcement would be that having failed to get approval to merge with Air NZ Qantas will just kill it. The New Zealand carrier has lots of orders for Boeing 777s too, a jet Qantas really needed years ago. It also has substantial orders and options for Dreamliner 787s, the jet that seems to be in a medically induced coma in Seattle, but at least they can be converted to 777s should Qantas actually succeed in ‘rescuing’ Air New Zealand from the pressures now being applied to it.

Qantas has also done its bit to slow down the process by which Australia’s mineral resources are being snatched from failed local managements by shrewd Chinese entrepreneurs by cancelling services to Beijing from 17 April thus forcing them to change flights on the way.