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Source: ONE News -
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Travel agents are warning the price of airfares can't fall much further, as a new player takes off on domestic routes.
Qantas subsidiary Jetstar is vowing to beat its rivals by 10% on any similar ticket.
The low cost airline jet star officially launched its multi-million dollar expansion into the New Zealand domestic airline market on Wednesday.
On Wednesday morning it started flying the four main routes between Auckland, Christchurch, Wellington and Queenstown.
The company kicked off its launch by offering 2,000 seats for free and special $19 one-way web fares.
Jetstar CEO Bruce Buchanan says he is confident the company has a product and business model that will work in New Zealand after being successful in the Asia-Pacific region.
"We're very positive about the economy at the moment as far as low cost carriers go. We're seeing trends around the world where value-based brands, whether it be in retail or airlines, are doing exceptionally well," he says.
However, cheap doesn't necessarily mean reliable and some flights ran nearly half an hour late on Wednesday.
Travellers who are flexible are expected to benefit most from Jetstar's low cost fares.
However, aviation experts say competitors may bump up prices for those travellers living off the main trunk routes to compensate for lower fares needed to compete with Jetstar on the main routes.
The airline, which was launched in Australia five years ago, already operates a trans-Tasman service into Christchurch.
"We're seeing a real uplift in international visitors in international visitors in most of the markets we serve."
We've had a slight blip with swine flu over the last six to eight weeks which has obviously caused some angst," Buchanan says.
He says the company sees continued growth long term with many opportunities particularly in south east Asia and trans-Tasman routes.
However, with the airline industry looking at a $14 billion loss this year, how long will these cheap flights last?
"We're at the lowest we have been in decades and I would be surprised if they were to drop any lower throughout the year especially for international travel," says Marie Pilkington from Flight Centre.
And then she says, they are likely to rise again.
"Things like taxes and fuel surcharges will make a difference and these are fluctuating daily," she says.
Like many, she is warning any traveller to check just what is and isn't included in the fare.
Low cost airlines make some of their margin charging extra for the things many travellers have taken for granted like baggage allowances.
