Flying Kiwis lose options as Pacific Blue quits NZ

Flying Kiwis lose options as Pacific Blue quits NZ domestic routes

by Paul McBeth

Aug. 16 (BusinessDesk) – Pacific Blue (NZ) Ltd., the local unit of Richard Branson’s Virgin Airlines, is quitting New Zealand’s domestic routes in October, as it prepares to code-share on the Tasman with Air New Zealand.

Virgin Blue Group of Airlines chief executive John Borghetti said the airline had completed the first part of a review, and is “removing capacity from services which are underperforming” and lifting capacity in areas with “strong revenue potential.”

Pacific Blue will concentrate on international short and medium-haul routes between Australia, New Zealand, the Pacific Islands, and South East Asia.

“Pacific Blue will cease flying New Zealand domestic routes and redeploy its New Zealand-based aircraft on to trans-Tasman and medium haul international routes,” Borghetti said in a statement. “These changes will maximise yields, increase aircraft utilisation and also provide a more attractive schedule for the business market, including better integration of our international and domestic schedules.”

Virgin Blue and New Zealand’s national carrier, Air New Zealand Ltd., are seeking regulatory approval for an alliance on trans-Tasman routes to offer lower fares, code sharing and reciprocity on loyalty schemes and airline lounges.

The tie-up has been widely attacked as heralding a loss of competition for consumers, and today’s announcement leaves the field clear to only two mainstream domestic airlines, Air New Zealand and Qantas budget carrier Jetstar.

Pacific Blue has been flying New Zealand’s local routes since November 2007.

The Air New Zealand share price rosen 2.6% this morning to $1.17.

(BusinessDesk) 12:49:09

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