Less aggressive stance gets credit for Jetstar NZ profit

Jetstar plans to add four regional routes to its domestic network by the end of the year.

Jetstar plans to add four regional routes to its domestic network by the end of the year.

A less aggressive approach to gaining market share may have helped Jetstar New Zealand to its first profit.

Qantas Airways said on Thursday that the New Zealand unit of Jetstar was in the black for the first time.

The Jetstar group, posted an operating profit of A$230 million (NZ$255.9m) in the year to June 30.

That follows a loss last year of A$116 million.

Financial details for Jetstar New Zealand were not disclosed.

Jetstar spokesman Luke Enright said the result had been helped by improved customer satisfaction, a marked increase in business customers and improved service reliability.

Jetstar is expected to make an announcement soon on which four New Zealand regional centres will be added to its network.

Nelson is believed to be a front-runner.

READ MORE: 
Jetstar asks Kiwis which regional routes it should fly to
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 Qantas profit jumps to A$975 million

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Infometrics economist and aviation analyst Benje Patterson said Jetstar's market share in New Zealand had plateaued.

Jetstar carried 15.9 per cent of New Zealand's domestic airline passengers in the June 2015 year, down from 16.2 per cent last year, and from a peak of 17.7 per cent in the 2013 year, he said.

"Rather than taking an aggressive market stance they seem to have been working to strengthen their existing operation," Patterson said.

He said falling market share could also be due to pressure from Qantas to improve profit margins.

Qantas as a whole posted an annual profit of A$557 million, turning around an A$2.8 billion loss the previous year.

Chief executive Alan Joyce said it was the best first-half result in four years and the best second-half result in the company's history.

 - Stuff

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