Pacific Blue axing NZ domestic flights

[Ian Warren]

http://www.nzherald.co.nz/travel/news/arti...jectid=10666453

QUOTE

Pacific Blue is to stop flying domestic routes in this country and redeploy its New Zealand-based aircraft on to the trans-Tasman and medium haul international routes. The decision is included in the first phase of a network review by the Virgin Blue Group of Airlines.

Virgin Blue chief executive officer John Borghetti said passengers holding forward bookings on New Zealand domestic routes from October 18 would be provided with re-accommodation and refund options.

The company was adding capacity to routes with strong revenue potential and removing capacity from services which were underperforming, Mr Borghetti said today.

Increasing capacity on trans-Tasman routes would lead to a rise in New Zealand-based staff.

Pacific Blue now employed around 450 New Zealanders at crew bases in Christchurch and Auckland and its head office in Christchurch. The increase in international flying meant up to 100 new jobs would be created.

Under the changes Pacific Blue's Brisbane-Hamilton service will increase from three to four flights a week, Brisbane-Dunedin services will increase from three to four flights per week, and the Christchurch-Melbourne frequency will increase from four flights per week to a daily service.
- NZPA[/quote]

Last edited by Chairman on Mon Aug 16, 2010 12:31 pm, edited 1 time in total.

[IslandBoy77]

Good - NZ is far too small a domestic market for so many to be playing in...

[HercFeend]

QUOTE (IslandBoy77 @ Aug 16 2010, 02:13 PM) <{POST_SNAPBACK}>

Good - NZ is far too small a domestic market for so many to be playing in...

Disagree - there's always room for competition and completion is what makes the player play nice. Look at the dramatic drop in prices when Pac Blue (or was it Jet Star - either way) entered the domestic market.......

[IslandBoy77]

The problem is thus: too much competition means that the value of the market drops. Once the value drops, everyone is having to scrape just to make a profit. Once that happens, either the service drops or you get "stealth taxes". Once push comes to shove, and the market is basically "not for profit", players begin to exit the market and then the price goes back up. And we must ask ourselves " Do we really want to be flying on the lowest-bidder"? After all, there are "set" components of operating an airline which do not reduce - and rubbish like the ficticious ETS, RMA & next GST just put more pressure on pricing, which means airlines are tempted to cut corners wherever they can. You can see this principle in spades in the computer industry - those of us in it now have to work twice as hard to make the same living as we did 10 year's ago. And all that ends up generating is a host of box-movers (Noel Leemings, Harvey Norman et al) who add nothing more than show-room value, and producers like Dell, HP et al who produce PCs loaded down with paid-for crapware that most people don't know they can or SHOULD get rid of. And while that's "good" for me to make money out of fixing, peeps buying crapware-loaded PCs pay a "stealth tax" after their purchase instead of paying a higher price for the RIGHT PC at the front. We already see overseas airlines charging all manner of "extras" for stuff that was part of the price 10 or 15 year's ago. We don't need "more competition", we need NZers who stop thinking "cheap" all the time then moaning about poor service, quality etc afterward. The QTP principle is a universal "law" that can't be broken - Quality, Time, Price: pick 2, and the 3rd is the "negative" result you're left with. e.g. If you want Quality Now, you get high price.

[andrewb]

Not too surprised - the macarena ads were awful, I'm sure they were single-handedly to blame for the downfall of PacBlue's domestic business.

[Daniel]

Only a matter of time before this happened. New Zealand can not take three airlines, all flying jets. The main issue I think was the choice of aircraft. The 737 800 (which Pac blue has decked out with about 190 seats) is simply too big for off peak services. If they had of brought over there Embraers, they could have done a much better. It also would have allowed regional services to destinations like Hamilton, Rotorua, Tauranga etc

[IslandBoy77]

QUOTE (Daniel @ Aug 16 2010, 05:34 PM) <{POST_SNAPBACK}>

Only a matter of time before this happened. New Zealand can not take three airlines, all flying jets. The main issue I think was the choice of aircraft. The 737 800 (which Pac blue has decked out with about 190 seats) is simply too big for off peak services. If they had of brought over there Embraers, they could have done a much better. It also would have allowed regional services to destinations like Hamilton, Rotorua, Tauranga etc

Agreed. So, they've got Embraers, eh? Yep, they would have made an interesting sight - always wanted to see one those in real-life. The military variants are certainly very maneuverable from the few clips I've seen of them performing...

[andrewb]

Well they trialled an Embraer from their Aussie fleet at several NZ airports didn't they? But it never went anywhere as I recall...

http://nzaviation.com/magazine/2009/05/pac...-arrives-in-nz/

[Daniel]

QUOTE (IslandBoy77 @ Aug 16 2010, 05:55 PM) <{POST_SNAPBACK}>

Agreed. So, they've got Embraers, eh? Yep, they would have made an interesting sight - always wanted to see one those in real-life. The military variants are certainly very maneuverable from the few clips I've seen of them performing...

QUOTE (andrewb @ Aug 16 2010, 05:57 PM) <{POST_SNAPBACK}>

Well they trialled an Embraer from their Aussie fleet at several NZ airports didn't they? But it never went anywhere as I recall...

http://nzaviation.com/magazine/2009/05/pac...-arrives-in-nz/

Yeah they have the E-170 (78 seats I think), and the E-190 (104 seats I think). I have seen a E-190 painted up in Pac Blue colours in Sydney before which looked pretty good.
What customers want is frequency. Instead of operating the 190 seat 738 on three daily services between AKL and CHC, why not put 6 E-170 services. You could have say a 7.30am, 9.30am, 11.30, 1.30pm, 3.30pm, 5.30pm and 7.30pm. Sure it would cost more to operate but you are likely to attract more customers, including business travellers (which the Virgin group is trying to attract). The 170s would also allow some new services to the regional ports, eg a twice daily ROT to CHC

[HercFeend]

I'll guarantee prices will start to creep back up now....... The whole world wants cheap, not just kiwis and I'm certainly one of them. Certain standards drop or services reduce as a result but I, like many others I'm sure, don't care about a complementary meal or a few free beers on a one hour flight to Auckland or a 30 min flight Wellington. It's no different to getting on a bus - you wouldn't want to be forced to pay extra for frills, food and drink etc on a coach trip - you just want them to get you there! Safety standards are not an area where anyone will allow standards to drop.

It's a mute point anyway - time will give us the answer one way or the other.........

[d3fai13r]

QUOTE (Daniel @ Aug 16 2010, 05:34 PM) <{POST_SNAPBACK}>

Only a matter of time before this happened. New Zealand can not take three airlines, all flying jets. The main issue I think was the choice of aircraft. The 737 800 (which Pac blue has decked out with about 190 seats) is simply too big for off peak services. If they had of brought over there Embraers, they could have done a much better. It also would have allowed regional services to destinations like Hamilton, Rotorua, Tauranga etc

Im not to sure, but it depends how good economics of E-jets are. Especially E170(IIRC there was some talks on anet about DJ not really happy with 170). DJ 738 in NZ are same capacity as the JQ 320(both are 180 all Y), so its maybe something different(cuz JQ reported profits just after few monthes of operation on domestic market) than aircraft choice. Im pretty sure they are looking for destinations like AUS ex WLG, Palmerston North etc.
BTW its not really representative, but when i was looking for flights(usually 2 weeks before trips), DJ seems to be either the most expensive or just a bit cheaper than NZ, but always more expensive than JQ. However again, its not representative stats.
Anyway DJ have done good job in dropping fares and pulling QF out of the market(ironically that JQ now pulled DJ out)

[pilotgallagher01]

Bit of a shame but as Daniel said, three airlines domestic flying jets isn't needed.
Good to see them increasing Tran Tasman runs though getting rid of the domestic runs is a bit of a shame.

[IslandBoy77]

QUOTE (HercFeend @ Aug 16 2010, 06:24 PM) <{POST_SNAPBACK}>

It's no different to getting on a bus

Except the bus driver hasn't spent many tens of thousands of dollars getting his license, having to meet rigorous safety / health / proficiency checks on a regular basis, and have the ability to kill many hundreds of people (think aircraft crashing into built-up area) in 1 fell swoop. Pilots deserve to be paid well, and cutting the guts out of airlines just to keep people "happy" is false economy. Worse, I think it's socialist ideology gone mad. My brother flies for BA on the "milk runs" around Europe & the Med. I'm not at liberty to discuss what he has told me about what's going in inside BA, but suffice it to say that the ridiculous price wars in the UK are having a very serious impact in all operational areas. Flying domestically might be a "bus trip" in terms of it's "importance" and value, but the boys who do the flying - and all the many support people who make it happen - are not bus drivers. As such, we do us and them a disservice by expecting prices to be in line with a bus ticket...

[pacblue]

QUOTE (IslandBoy77 @ Aug 16 2010, 02:13 PM) <{POST_SNAPBACK}>

Good - NZ is far too small a domestic market for so many to be playing in...

not good = i have been made redundant (as of October)

[Ian Warren]

QUOTE (pacblue @ Aug 17 2010, 01:42 AM) <{POST_SNAPBACK}>

have been made redundant (as of October)

September 9th is a level 1 in my work , pack ya bag and walk on your Option , next batch required - Me , cheapest off site to sent early next year ... depends on ya so call skills - how your labeled ,

Pac , good luck Matey , we have been and always will be just numbers ,

HEY , WE WILL BE BACK

[HercFeend]

QUOTE

Except the bus driver hasn't spent many tens of thousands of dollars getting his license[/quote]
We freely choose to spend the money on getting our licences - what this has to do with ticket prices I don't know! [baffled]

QUOTE

Pilots deserve to be paid well, and cutting the guts out of airlines just to keep people "happy" is false economy.[/quote]
Yeah they/we do, but don't. If you intend getting into this game thinking you're going to get rich flying for a middle eastern airline on a couple of hundred grand a year, a house and subsidised schooling you're dreaming....... Pilots (on the whole), like so many other professions, don't make particularly good money especially in the early years.......and any potential aviator with half a brain (which you'd want him to have) would know this before their first CPL lesson! Nothing p**ses me off more than someone who enters a profession knowing (or not having checked) the pay isn't great and then proceeds to whinge about it. We can make choices in life - if you don't like what you're doing.......do something else or quit whining!!!!

QUOTE

Worse, I think it's socialist ideology gone mad.[/quote]
I think you're getting your ideologies mixed up here my friend. If it were socialism there would only be a need for one airline which would be state owned and operated, all ticket prices would be the same and pilots, crew and staff would probably be on about the same. What we're seeing is Capitalism - free market trade and competition which results in price wars (in all industries, not just in the air) to attract a finite number of customers to your product.....this results lower prices for the consumer and the knock on is that you must operate lean. Do you honestly think if ticket prices went up pilots, crew and other staff would benefit? Executives (for doing a great job!!) and shareholders would benefit that's all.
We live in a capitalist society - that's the way it is and unless there's a revolution, which I sincerely hope there isn't, that's the way it will be!


I think we'll just have to agree to disagree on this one anyway Islandboy, or risk spending the rest of our days discussing something we have no influence over!

Very sad to hear some of you guys are being directly affected by this 'operational change'. Hope you find something else soon. Good luck.

HercFeend

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[IslandBoy77]

QUOTE (pacblue @ Aug 17 2010, 12:42 AM) <{POST_SNAPBACK}>

not good = i have been made redundant (as of October)

Sorry to hear that. The news article made it sound like there would be no job losses and that there would in fact be a staff increase. What job do you do? I've been made redundant once before myself - never a fun time, especially having to retrain for something different (in my case, from using Mainframe computers @ Databank to DTP on desktop PCs). All the best.

[Chairman]

http://www.nzherald.co.nz/nz/news/article....jectid=10666610

QUOTE

Fare rise tipped as Pacific Blue exits

Domestic airfares are likely to increase because of Pacific Blue's departure from New Zealand and despite rival Jetstar's expansion plans, Consumer New Zealand warns.

Pacific Blue said yesterday that it was axing its domestic operations here while bumping up its transtasman flights by five a week.

Consumer New Zealand chief executive Sue Chetwin said the news was disappointing and warned travellers to book far in advance to ensure they got the cheapest tickets possible.

"It goes to show how difficult it is to run two domestic airlines and run them profitably. It's not good news for consumers. It will mean they can probably expect some fees to go up, although there will be some competition on routes. It will mean there is less urgency for Air New Zealand to have deals on those routes when there is not much competition."

Ms Chetwin said it would be interesting to see how successful Air New Zealand's Starfish card would be now there was one less player in the market.

Air New Zealand launched the card last month to offer frequent flyers on regional routes cheaper fares. The card is in a trial phase.

Air New Zealand domestic airline general manager Bruce Parton said Pacific Blue's move was not a surprise as the market could not sustain three airlines.

Mr Parton said Pacific Blue's departure would not increase prices, and if the market demanded additional flights, Air New Zealand would look to increase capacity.

After Pacific Blue's announcement, rival airline Jetstar said it would increase its domestic fleet from three jets to five by this time next year.

These two jets would replace the two the market is losing.

Virgin Blue chief executive John Borghetti said the airline had tried very hard but had failed to make a profit out of New Zealand's domestic market.

"We've been here three years and during that time we have lost a significant amount of money. There is virtually no prospect at all of that turning into profit. Unfortunately, we have had to make a tough decision of pulling out.

"That said we are very proud that we did bring a lot of competition into New Zealand, and we have basically laid the foundation to very competitive fares," Mr Borghetti said.

The company said yesterday that travellers booked on flights from October 18 onward would be provided with re-accommodation and refund options.

Jetstar chief executive Bruce Buchanan is adamant prices will remain low and that there is room for further expansion for the company.

The company's first new jet will join the domestic market in December and the second will enter the market within the next 12 months.

Buchanan said he was very pleased with the company's performance in New Zealand over the past 14 months. Jetstar started flying domestically in June 2009.

"We will continue to deliver low prices. Our focus is on delivering low fares, making airline travel more affordable and accessible."

The Engineering, Printing and Manufacturing Union said Pacific Blue's move from the domestic market could cut up to 200 jobs, despite the airline saying there would be no redundancies and that up to 100 new jobs would be created through increased Tasman flights.

However, national secretary Andrew Little said Pacific Blue was dependent on a number of other service providers and suppliers who would have to scale back their work.

"Once again, a large number of Kiwi workers will pay the price of proving that our domestic aviation market cannot sustain three airlines on the main routes."

-By Kelly Gregor[/quote]

[cowpatz]

NZ domestic can support 1.5 mainstream jet operators. Sure there was/is cheap fares but they simply were/are not sustainable. They were artificially lowered to retain or gain market share. One airline had to lose out big time and Pac Blue was the obvious one. Have a look at the airfares then do the maths. There just isn't the return on the assets.
I am sorry to learn of redundancies but realistically it was always on the cards and this is something to consider when commencing an aviation career or changing airlines.

[pacblue]

QUOTE (IslandBoy77 @ Aug 17 2010, 08:36 AM) <{POST_SNAPBACK}>

Sorry to hear that. The news article made it sound like there would be no job losses and that there would in fact be a staff increase. What job do you do? I've been made redundant once before myself - never a fun time, especially having to retrain for something different (in my case, from using Mainframe computers @ Databank to DTP on desktop PCs). All the best.

thanks mate, and yes apparently they will be expanding the international side of things however that will be predominantly out of AA (just not enough market for it in WN) so it will create more jobs in AA, however at WN its likely there will be more than a few redundancies. i am a dispatcher for pacblue.
cheers mate