Grant Bradley: Air New Zealand’s $1037 transtasman today fares risk pushback

OPINION:

The aviation industry has been chomping at the chocks to get flying across the Tasmanand airlines may be about to find out how much people will pay to do it.

An announcement on the timing of the proposed bubble will be on April 6, but Air New Zealand has already loaded scores more flights into its website, Virgin Australia says it will come back from the dead on the Tasman in June and Qantas is eagerly waiting in the wings.

Seat only pricing today on Air New Zealand is $1037 return between Auckland and Sydney on April 20 – the first week its anticipating quarantine-free travel on both sides of the Tasman.With these fares the airline risks further pushback from customers who also have had a tough year.

The cheapest one-way Auckland to Sydney flight through its website starts at $447 according to the airline’s website on April 20.Compare that to the $79 the airline was selling the same flight for a year ago as it was faced with collapsing travel and desperately was trying to stimulate travel.Then border closures brought it to a halt.

Air New Zealand has endured its worst year commercially and nobody has to be an accountant to work out why it will want to charge what it can to try and right the balance sheet.

It says the schedule on its website after April 19 is a continuation of its pre-Covid schedule while until then it is running its Covid schedule which reflects lower demand and border closures.

”Pricing is higher than normal reflecting the high costs of operating such a reduced schedule.Pricing and the schedule will change once the Government announces a start date for the transtasman bubble and we load more flights for sale,” a spokeswoman says.

The airline – 52 per cent owned by the Government on behalf of the taxpayer – has not only suffered financially during the past year but been roasted for how it has treated passengers.They have hundreds of millions of dollars in credits as Air NZ didn’t refund across the board as others did and initially, at least, found it very difficult to even track them down.

The airline rectified the call centre and system issues, apologised several times but its brand took what Opinion Compare said was an ”unthinkable” hammering in a survey last year.

As at June 30 last year the airline had $726 million in passenger revenue in advance – fares it collected but hadn’t provided the service for. Many will burn up the credit they have with the airline on the Tasman and is the airline banking on those passengers not worrying too much about what they pay?

They will be grateful to just get on a plane and enjoy an international travel experience, even if it is short-haul.

There will be other passengers so desperate to reunite with family and friends they’d pay almost anything.

It’s now been 12 months since the 600,000 New Zealanders living in Australia and 75,000 Australians in New Zealand have easily been able to fly to see each other.

Air New Zealand has come unstuck before when its pricing algorithms took over from common sense – an example being $800 round trips to Christchurch following the March 15 terror attacks.

And many leisure travellers will baulk sky-high transtasman fares. They’ve learned to find their way around New Zealand happily and the road trip is well in vogue.Airlines have also got to work hard to get business travellers back on board and although the price was less of an issue before the pandemic, companies have learned how Zoom can save them a fortune.

Virgin Australia is back on the Tasman from June 20 with one-way fares starting at $308.

That’s more like it.

Consumer NZ says based on prices being advertised by major airlines, consumers hoping to travel to Australia when the bubble opens will be paying a lot more than they used to.

Those with airline credits from cancelled overseas trips and keen to book a flight across the ditch may find their credits don’t go very far, a spokeswoman said.

”Big players with significant market share, such as Air New Zealand, have to be careful they don’t take advantage of their position. We’d expect the company to ensure its pricing structure is fair and reasonable.”

Air New Zealand is restoring its network across the Tasman, even adding a non-stop flight to Hobart, which is fantastic.

And look out for some promotional fares if the long delayed two-way bubble comes to fruition.It will certainly need to offer a range of fares.

But at $1037 return to Sydney available today it looks to be starting at the top.

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