Virgin, Pacific Blue Announce New Domestic Airline
MEDIA RELEASE
Virgin Blue and Pacific Blue Announce New NZ Domestic Airline With “Pay a Visit Not a Fortune” $39* Fares
Thursday 23 August 2007: Virgin Blue Airlines and its three year old New Zealand subsidiary Pacific Blue today announced major plans for a new domestic airline for New Zealand with NZD$39* fares on sale from today for flights commencing in November 2007. Initially the carrier will fly on New Zealand’s key trunk routes Auckland-Wellington, Auckland-Christchurch and Wellington-Christchurch from 15 November 2007^.
The decision to enter the New Zealand domestic market comes in the wake of strong support and lobbying from the New Zealand community for Pacific Blue to bring its service style and competitive fares to internal New Zealand flights in the same way it has done on the trans-Tasman and South Pacific routes.
Virgin Blue Group of Airlines Chief Executive, Brett Godfrey, said, “The decision was not taken lightly as it is a major investment and a long term commitment to keeping the “air fair” in New Zealand. The time is right to bring some much needed competition to the existing duopolistic market and we are excited to be opening up new travel opportunities for both the people of New Zealand as well as inbound tourists.”
Brett Godfrey continued, “When Richard Branson visited New Zealand in January this year to celebrate Pacific Blue’s third birthday, he promised that domestic services were something of interest to us under the right circumstances and at the right time. We are confident the circumstances are now right and there is room for competition and an obvious need for market stimulation. Pacific Blue is well positioned to give the existing players a good run for their money, particularly on the monopolistic Wellington-Christchurch route.”
Virgin Group Chairman, Sir Richard Branson said, "I am absolutely delighted to announce that Pacific Blue will soon be shaking up the New Zealand domestic market and bringing its unmistakable fun, flair and affordability to travel within New Zealand. I enjoyed a wonderful trip to New Zealand earlier this year, where I saw first hand the great enthusiasm and support for Pacific Blue. I am thrilled that we can further enhance our commitment to the local market with the launch of our domestic operations. We look forward to Pacific Blue spreading its wings and bringing long term domestic bliss, perhaps not for the competition, but certainly for locals and visitors travelling within New Zealand."
The airline will take delivery of two Boeing 737-800 aircraft to join the Pacific Blue fleet and operate both international and domestic New Zealand routes. The routes are tailored to suit the needs of the market in terms of frequency and schedule:
Auckland–Wellington
Five direct daily return flights from 15 November. A special sale fare has been launched of $39* one way on the Internet. The sale fare is available now until 16 September 2007 or until sold out and is for travel from 15 November 2007 through 29 February 2008. Fair fares will start from $69 one way on the net, 22% lower than the existing fares available on the same route.
Auckland–Christchurch
Two direct daily return flights from 15 November. A special sale fare has been launched of $39* one way on the Internet. The sale fare is available now until 16 September 2007 or until sold out and is for travel from 15 November 2007 through 29 February 2008. Fair fares will start from $79 one way on the net, 30% lower than the existing fares available on the same route.
Wellington–Christchurch
Three direct daily return flights from 15 November. A special sale fare has been launched of $39* one way on the Internet. The sale fare is available now until 16 September 2007 or until sold out and is for travel from 15 November 2007 through 29 February 2008. Fair fares will start from $69 one way on the net, 12% lower than the existing fares available on the same route.
To ensure maximum benefit for Guests travelling for pleasure as well as business, the internal flights will complement Pacific Blue’s existing international services, providing convenient connections from within New Zealand to Australia, Samoa, Tonga and the Cook Islands.
Adrian Hamilton-Manns, General Manager Commercial, said, “The people of New Zealand have supported Pacific Blue in its quest to bring true low fares, genuine competition and fun and flair to trans-Tasman travel and that very support has given us the motivation to bring the same product and affordability to the domestic market where it is much needed.
“It is no secret that the existing domestic duopoly results in higher fares and half-hearted competition and we very much look forward to challenging that and championing affordability for local travel.”
Domestic flights are now on sale and can be booked via the website (www.flypacificblue.com), by calling 0800 670 000, or by contacting a travel agent. Members of the Velocity Loyalty program will also be able to earn and redeem points when they fly domestically in New Zealand.
Pacific Blue plans to double its staff numbers over the next three years as it ramps up domestic operations. New Zealanders interested in joining the dynamic Pacific Blue team in a range of roles can email pacificblue.jobs@flypacificblue.com.
About Pacific Blue, Polynesian Blue, and Virgin Blue Airlines
International airlines Pacific Blue and Polynesian Blue, along with Australian domestic airline Virgin Blue, operate a fleet of 53 modern Boeing 737 aircraft flying to eight international and 22 Australian destinations including New Zealand, Fiji, Samoa, Tonga, Vanuatu and the Cook Islands.
^ subject to regulatory approval
* All fares are one-way for flights booked on the internet, $15 more by phone. Seats are limited and fares may not be available on all flights or during peak periods. On sale until 16 September 2007 or until sold out for travel from 15 November 2007 through 29 February 2008.
ENDS
A Pacific Blue Boeing 737-800 at Auckland International Airport. 
Virgin Blue has announced that it is to start offering domestic flights within New Zealand starting November. The third commercial flight company in New Zealand will start by focusing on New Zealand's three major cities, Auckland, Wellington and Christchurch.

Budget airline, Pacific Blue Airlines, which is run by Virgin Blue, already runs flights in New Zealand to international destinations. And, despite only major cities currently being serviced, smaller cities and towns will be considered on November 15.

The service is set to start on November 15, with a special deal currently available of NZ$39 for all services per ticket for one way. This deal will be available until the latest of September 16. The normal online air fares range from $69 for Auckland to Wellington and Christchurch to Wellington. These fares are 22% cheaper than those offered by Air New Zealand. An air fare for Auckland to Christchurch is $10 more expensive at $79.

Virgin Blue Chief Executive Officer, Brett Godfrey, said they expect to face a few hard years while the new services are starting. "We expect actually to lose a little bit as we find our feet but our loss will be the travelling public's gain."

Sir Richard Branson, Chairman of the Virgin Group, said that he was "absolutely delighted" that Pacific Blue is set to enter the New Zealand domestic market, "bringing its unmistakable fun, flair and affordability to travel within New Zealand." It was first rumoured that when Sir Branson was in New Zealand earlier this year that a domestic service was to begin, "Sir Richard Branson promised that domestic services were something of interest to us under the right circumstances and at the right time."

Godfrey describes the new services as a major investment and a long term commitment. "The time is right to bring some much needed competition to the existing duopolistic market."

Due to Pacific Blue starting a domestic service, New Zealand's flag carrier, Air New Zealand, has lost 8.6% on the share market in total this week. The day before Pacific Blue's announcement, Air New Zealand lost $179 million to due to share value drop. Head of research at Forsyth Barr, Rob Mercer, said, "Air New Zealand has fallen $1 billion in value in the last couple of months, yet their earnings have got stronger."

Mercer says, "Call me an optimist but competition can sometimes be a good thing. And if someone really puts in a product that stimulates the market and grows it, it can actually be a good thing, and Air New Zealand being the incumbent can actually be quite a beneficiary out of that environment."

The Chief Executive of the Travel Agents Association, Paul Yeo, describes New Zealand's current airfares as too high, due to lack of competition. Yeo now expects this to change with Air New Zealand and Qantas matching Pacific Blues prices.

Air New Zealand did in fact drop its cheapest airfares to match those offered by Pacific Blue, effective September 1.

For the new flights, Pacific Blue is set to add two new Boeing 737-800 to their existing fleet of 53 Boeing 737s.

Australian aviation analyst Peter Harbison said Air New Zealand could come under further pressure on domestic routes with Singapore-based budget airline Tiger Airways expected to cross the Tasman by the middle of next year. Australian aviation analyst, Peter Harbison, expects Singaporean airline, Tiger Airways, to be operating in New Zealand by mid-2008.