Qantas doubles down on New Zealand with biggest investment as rival cuts back
A Qantas Boeing 737 takes off from Sydney. The airline and its Jetstar stablemate have been stepping up New Zealand services. Photo / David Gray, AFP
Qantas says its biggest-ever investment in New Zealand is under way.
And its biggest charm offensive might be too.
Chief executive Vanessa Hudson is expected at a Wellington party tonight with the Prime Minister and other guests.
The cocktail event is on while Qantas’ rival Air New Zealand bleeds money and starts cutbacks.
Hudson acknowledged the pressures airlines were facing.
“Fuel costs are elevated,” she said.
“The situation in the Middle East continues to affect routing and costs for airlines globally. When you run an airline, uncertainty is never far away.”
Qantas has not been immune to Middle East war impacts.
Last month it said exposure to jet fuel price volatility was to blame for fare hikes and capacity changes.
The airline mentioned strong demand for flights to Europe but was cutting domestic services.
Hudson today indicated Qantas was doubling down on New Zealand.
“What we’ve learned over more than a century of flying is that when conditions are difficult, you back the relationships that matter most.
“What the Qantas Group is committing to New Zealand right now is the biggest investment we have ever made in this market.”
Her remarks were shared with the Herald before the event.
Guests from across the aviation sector and MPs are expected to attend tonight’s function, which Hudson said PM Christopher Luxon was co-hosting.
Hudson said Qantas and Jetstar had added more than 800,000 transtasman seats over the past 12 months.
The Australian airline made a $1.098 billion profit after tax in the six months to December 31.
Air NZ lost $40 million in the same period.
More recently, Qantas was ranked second highest in the OAG major airline category for April punctuality, and 16th in the world.
The aviation analytics provider said Qantas had 87.77% on-time performance.
OAG ranked Air New Zealand 56th in the world with 82.34% on-time performance.
Jetstar was ranked 101st with 75.84% on-time performance by OAG.
Hudson said Jetstar was undergoing its biggest-ever expansion in New Zealand.
She said the low-cost carrier had launched seven new domestic and transtasman routes over the past two years.
Hudson said nearly 400,000 Jetstar customers travelled on transtasman flights for under $200 last year.
She said Jetstar’s average domestic fares were “consistently 40-50% lower than the competition”.
Hudson also mentioned the new Qantas Airbus A220, which started flying from Wellington to Brisbane in February.
But while the party tonight might be in Wellington, the CEO lavished praise on Auckland.
“We’re investing in Auckland because we see its potential, and we want to be the airline that realises it.”
The new Qantas lounge at Auckland Airport opened in December.
That occasion was used to announce new year-round Qantas services from Auckland to Samoa and the Gold Coast from June.
Qantas international and freight chief executive Cam Wallace, who spent 19 years at Air New Zealand, was among those at that event.
“Auckland is becoming an increasingly important eastern hub for us,” Hudson said this evening.
“Our new Auckland to Perth service is part of that, giving Kiwis direct access to Western Australia and opening up connections across our broader international network.”
The Australian airline was also using Auckland as a springboard to North America.
Hudson said the Auckland-New York service was one of the airline’s most popular international routes.
“It is increasing to daily next month,” she added.
She also pointed to the Economy Plus class being added to Boeing 737 services to New Zealand.
She said those seats gave customers up to 40% more legroom, priority boarding and overhead baggage access.
“Taken together, these are not incremental changes. They represent a meaningful shift in what flying with Qantas in this part of the world feels like.”
She said the group deliberately used a “dual brand” approach.
“Qantas and Jetstar serve different parts of the market, and together we make sure that whether you’re travelling for work or travelling on a budget, there’s an option for you.”
Hudson also said the airline group had 1800 employees based in New Zealand.
“It’s one of the very few places in the world where we have a base outside of Australia.”
Hudson said Qantas now had more than one million Qantas Frequent Flyer members in New Zealand.
They were the airline’s largest frequent flyer cohort outside Australia.
Andrew Glance, Qantas Loyalty chief executive, in March told the Herald the airline brought more clarity to the ways members could advance through to the next frequent flyer tier.
“We are seeing strong engagement and activation across that audience,” he said of Qantas’ New Zealand frequent flyers.
“This country isn’t just a market we fly into. It’s a place we’re genuinely part of,” Hudson said this evening.
She said the airline group wanted to work more closely with the New Zealand Government.
Politics and airline rivalry aside, Hudson indicated the airline hoped to achieve some things the public might care about even more.
“More routes, more access, more affordability.”
John Weekes is a business journalist covering aviation. He previously covered consumer affairs, crime, politics and courts.
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