Qantas To Expand NZ Domestic Services

October 9, 2007

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Qantas, Australia's largest airline, said it would expand its operations in New Zealand and offer new business services, as competition for air travel on domestic routes intensifies.

Qantas said it would re-start a Wellington-to-Christchurch service, add another Boeing 737 to its New Zealand domestic fleet and invest at least NZD$3 million in passenger facilities.

Regional manager New Zealand Grant Lilly said Qantas' introduction of the Citiflyer brand was part of a strategy to target the business traveller.

"The changes reinforce Qantas' commitment to the New Zealand market," Lilly said in a statement.

Pacific Blue, a subsidiary of Australia's Virgin Blue, said in August it would begin flying New Zealand's main domestic routes from November, and offered a range of cut-price fares.

National carrier Air New Zealand responded by cutting its fares and reconfiguring its domestic services.

Both Qantas and Pacific Blue will fly between New Zealand's three largest cities, Auckland, Wellington and Christchurch. Qantas had scrapped its Wellington-Christchurch service earlier this year.

Lilly said the Citiflyer brand would include refurbished passenger lounges and aircraft, as well as in-flight meals and quicker check-ins. Adding another aircraft would take its New Zealand fleet to five.

Analysts expect the increased competition to eat into Air New Zealand's profitable domestic operations.

(Reuters)