Air New Zealand plans fare changes

FINDING FARES: Air New Zealand is understood to be planning major changes to its regional fare structure.

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Air New Zealand is understood to be planning major changes to its regional fare structure, including deep discounts in return for an annual fee to attract more business fliers as the economy recovers.

Leisure travellers would also benefit through a doubling in the number of super-cheap seats to the provinces through the airline's grab-a-seat website. This would make an extra 50,000 seats a year available from as low as $1 each.

Senior management has held a series of workshops around the country involving about 5000 key customers, businesses and local politicians to canvass options.

It is understood that central to the plan is an annual discount card which would be sold for between $1000 and $1500 in return for a discount of between 20 per cent and 35 per cent on any regional fare.

The discount card would also include Koru lounge membership, worth about $600, and all fares would continue to earn airpoints.

To improve the value of the Koru membership lounges would be added to some smaller airports, and existing lounges upgraded.

The changes were aimed at businesspeople and staff of large organisations who regularly travelled to one of the main centres either for business or weekly commutes to work.

The airline sees the changes as a way of significantly stimulating the regional market.

It was expected that up to a third of regular flyers in the regions would take up the offer, codenamed Project 21, reflecting the number of provincial centres on the network that did not have jet services.

A one year nationwide trial of the system was expected to be announced next month and launched before September.

House of Travel retail director Brent Thomas said the initiative was surprising given that Air New Zealand held a monopoly on the regional network.

The airline could also be taking pre-emptive action in anticipation of new competition, he said.

Air New Zealand could be looking to capitalise on an uplift in travel this year after the recession and encourage a return to more normal company travel policies.

Including the Koru Club membership as part of the package could be aimed at enticing businesses back into the lounges. However, the annual fee for the discount card "does seem like a lot of money" for all but the most frequent travellers.

"I don't think there will necessarily be a huge take-up, would be our initial view," Mr Thomas said.

South Canterbury Chamber of Commerce chief executive Wendy Smith said the deal would encourage more business people to fly from Timaru Airport rather than driving up to Christchurch to take advantage of much cheaper fares.

Fares from Timaru to Wellington regularly cost more than $250 each way.

- © Fairfax NZ News