Air New Zealand Marketing Strategy

Topics: Air New Zealand, New Zealand, Airline Pages: 11 (3373 words) Published: July 25, 2008
Air New Zealand Limited was incorporated in 1940 registered in New Zealand, initially founded as Tasman Empire Airways Limited. Air New Zealand is a government owned airline based in Auckland; the exterior design of the aircraft carries the national flag. It provides air passengers international and domestic transport services to 48 destinations. Focus cities include Wellington International Airport, Christchurch International Airport, and Los Angeles International Airport.

“Air New Zealand also encompasses business units providing engineering and ground handling services. Subsidiaries extend to booking systems, travel wholesaling and retailing services.” (Air New Zealand, 2008).

Market Analysis:
Market Demand:
In February 2008, it was reported that Air NZ had a strong load factors for long-haul flights that was up 2.7% to 82.5%, but short-haul flights were down by 12% as a result of strong domestic and trans Tasman competition. The United States’ economic slowdown impacted on the airline industry. Demand is growing with Air NZ, increased passenger demand by 4-5% and increased in freights by 2-3%, but slowed down from the previous year of 7.4% increase for passengers and 4.3% for freight (Bradley, 2008). Market/Product structure analysis

Air New Zealand (Air NZ) offers international and domestic transportation, cabin crews provide comfort orientated hospitality to ensure consumers are well looked after on their journey. Their products standard in most of the airlines but Air NZ offers extra lower prices tickets for domestic, Pacific and Tasman routes.

Price list from the lowest - the Smart Saver fares, Flexi Saver fare, Flexi fare then to the more expensive Premium Economy and Business Class are available for domestic, Tasman and Pacific routes. In addition, the long-haul passengers may choose the service price range from Global Saver fares, Global Flexi fares, Premium Economy Fares and the Business Class fares (Air New Zealand, 2008). Air NZ also have 5 wholly-owned subsidiary airlines; Air Nelson based in Nelson, Eagle Airways based in Hamilton, and Mount Cook Airline based in Christchurch which serve secondary destinations in New Zealand (Wikipedia, 2008). Zeal 320 was introduced to help combat increasing labour costs. Air New Zealand operates its trans-Tasman fleet under the Zeal320 brand.

Relevant market – current primary demand

Air NZ originally holds around 80% of the domestic market before the entry of Pacific Blue. Pacific Blue currently owned by Virgin Blue in UK enters Australia - the competition market in 2000, and now merges to the New Zealand domestic, Pacific and Tasman market. Besides Qantas, Virgin Blue would be the price rival of Air NZ; as it is offering discounted fares such as the $39 specials. This was reported to have saved passengers more than $4 million in the day after it hit the market with this first batch. Low airfares has became available since the entry of Pacific Blue, meanwhile Air NZ has resisted to get drawn into a “full-blown price war”, nevertheless the saver fares and discounting on 10% of seats are a scheme to assist in retaining their valuable customers.

The Smart Saver fares are lowest available tickets for domestic, Pacific and Tasman routes. It is non-refundable and non-chargeable on the day of travel. Flexi Saver fare is a mid-range flexible option. With the additional service fees and change penalties, it is open to change flight sup until the day before departure. And Flexi fare is allows passengers to change, cancelled or refund the ticket at ay time, given that a service fee and fare upgrade may apply (Air New Zealand, 2008).

Long-haul destinations include North America, the UK, Europe, Asia, Japan, New Caledonia and Tahiti. Global Saver offer year-round low-priced fare, however there are limited offers and consumers will need to book these in advance. In the case of change of booking, service fees and change penalty are...
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