Air NZ fares overhaul about flexibility, profit

Air New Zealand is overhauling its Seats to Suit products on short-haul international routes to give passengers more affordable flexibility — and drive more revenue for the airline.

It will offer cheaper ways to buy more flexible tickets and at least snacks and seat-back entertainment for all passengers.

It is, however, doing away with options for a neighbour-free seat and the opportunity to buy food on its short-haul flights across the Tasman and to the Pacific Islands.

The changes start for new bookings from June 11.

The airline says it expects the changes to generate more revenue as more passengers buy tickets offering more flexibility. Only 2 per cent of passengers were buying the current works deluxe — which provided a path to full flexibility and included an empty neighbouring seat option and up to two checked-in bags.

Under the new scheme, the cost of upgrading from a basic seat to worksflexi (which has refundable fares) is $100.

New flexibility means the change fee is waived (although a fare difference will apply) and refundable fares.

The previous works deluxe fare was a $140 upgrade from a basic seat and passengers had to pay even more for flexibility.

Entry-level fares will come with inflight entertainment (currently switched off for the most basic fares), the option to buy a bag for $30, a snack and tea, coffee, water or juice.

The next level, theworks, has a checked-in bag, full beverage service and meal for an additional $40 on top of a seat fare.

Seats to Suit was introduced in 2010 and was a game-changer for the airline, which was facing hot competition on the Tasman.

In effect, this allowed Air New Zealand to match low-cost carriers on headline fares on price by cutting back the standard offering and getting them to pay at different levels for bags, entertainment and food.

Air New Zealand general manager short haul Jeremy O’Brien said it was reconfiguring bundles in response to customer demand.

Qantas keeps it simple on the Tasman. Every passenger gets a checked-in bag and a meal.