27 Sep 2010

Air NZ 'has back-up plan' if alliance rejected

6:55 am on 27 September 2010

Air New Zealand says it has a back-up plan if its proposed alliance with Virgin Blue is rejected outright by Australia's competition watchdog, but it admits it's definitely second best.

Both airlines want to collaborate on routes and sell seats on each other's flights to compete more effectively against Qantas and its subsidiary, Jetstar, on trans-Tasman routes.

But in an initial judgement, the Australian Competition and Consumer Commission (ACCC) said the tie-up was likely to reduce competition.

At an annual meeting in Auckland on Friday, Air New Zealand chief executive Rob Fyfe told shareholders that if the plan is rejected, part of plan B is to compete in all parts of the market, from budget to business travellers.

Mr Fyfe says it would also consider ways to use Virgin Blue's network in Australia.

He says it wouldn't go as far as the proposed alliance, but could involve helping utilise their distribution structure in Australia and allowing them to do the same in New Zealand.

Extra service on new long-haul planes

Meanwhile, Air New Zealand is still inventing new ways to attract people to fly with it.

On the airline's new long-haul 777-300 planes, to be delivered from December, passengers will be able to order snacks and drinks between set meal times through touch screens in the back of the seats.

Air New Zealand international airline general manager Ed Sims says this will give travellers more control, and should smooth demand for the flight crew.

He says Air New Zealand has been trialling the system with crew for the past 18 months, and will start the service on its Auckland to Los Angeles route first, then, from April on the route to London.

Mr Sims says travellers will also be able to access YouTube, and news and weather feeds.