New Zealand Airline Vs Qantas
Air New Zealand Limited (ASX:AIZ, NZX: AIR, Air New Zealand) is a scheduled passenger airline based in Auckland, New Zealand, and the national flag carrier. Its focus is on Australasia and the South Pacific, with services to Europe, North America and Asia, and it is a Star Alliance member. Its main hub is Auckland Airport
1) External environment
All the factors that are external of the companies or organisations are known
as “external environment”. External environmental factors such as the PEST
those are political, economic, social, and technological. These factors
influence marketing decisions.
A PEST analysis of the external environment of the NZ airline:
The overall and determining objective of New Zealand's international air transport
policy is to maximise economic benefits to New Zealand, including trade and tourism,
consistent with foreign policy and strategic considerations. New Zealand therefore
seeks to conclude with other countries the most liberal and flexible air services
arrangements possible, as a means to securing enhanced quantity, quality and breadth
in our international civil aviation links.
Last year, Prime Minister of the New Zealand Helen Clark leaded a large New
Zealand delegation to China’s capital Beijing for events associated with the
signed of the New Zealand-China Free Trade Agreement (FTA). The trading
agreements will impact Trade Transportation between New Zealand and China.
More people and goods will be transited by NZ airline. More profit will into
the airline market.
By last year, the international financial crisis made the large change of
international financial exchange rates. The exchange rate between NZD and
CNY has dropped 30%, this mean is $1 NZD change ;6 CNY became $1
NZD change ;4. Also Chinese oil price is cheaper then international oil
price, so the planes of NZ airline always oiled in China. By this reason, on NZ
airline the plane ticket price was increased then last year.
After 2008 Beijing Olympic Games, an image of new Chinese was exhibited to the world and travel china also was become easier. But here only have five city (Hong Gang, Guangzhou, Beijing, Shanghai and Macao) was based on NZ airline. Consumer needs easier to travel other city in china, like Chengdu and Tibet. Consumers maybe choose the air company that who can contact more cities in china.
Consumer want take the faster, more comfortable and safer plane. The Boeing 787 Dreamliner is a mid-sized, wide-body, twin engine jet airliner currently under development by Boeing Commercial Airplanes. It will carry between 210 and 330 passengers depending on variant and seating configuration. Boeing stated that it will be more fuel-efficient than earlier Boeing airliners and will be the first major airliner to use composite materials for most of its construction. Boeing featured its first 787 in a rollout ceremony on July 8, 2007, at its Everett assembly factory, by which time it had become the fastest-selling wide body airliner in history with nearly 600 orders. Originally scheduled to enter service in May 2008, production has been delayed and it is currently scheduled to enter into service in late 2009. Thinking a company who earlier own the new plane can be make bigger market share.
2) Competitive environment
Qantas Airways Limited (IPA: /ˈkwɔntəs/) (ASX:QAN) is the national airline of
Australia. The name was originally "QANTAS", an acronym for "Queensland and Northern Territory Aerial Services". Nicknamed "The Flying Kangaroo", the airline is based in Sydney, with its main hub at Sydney Airport. It is Australia's largest airline and is the world's second oldest continuously
operating airline (behind KLM) and the oldest in the English-speaking world.
Qantas is headquartered in the Qantas Centre in the Mascot suburb of the City of Botany Bay, Sydney, New South Wales
In April 2001 a key rival in the form of Qantas started flying domestic routes in New Zealand. Qantas is lower price than Air NZ in all Oceania airline. Because of polity reason Air NZ has more advantage in NZ. December 2002 marked a key development in the New Zealand air travel industry, when Air New Zealand and Qantas submitted applications to both the New Zealand Commerce Commission (NZCC) and the Australian Competition and Consumer
Commission (ACCC) for the formation of a 'strategic alliance'. This, in effect, would have monopolised the New Zealand passenger air travel market.
In February 2007, Air New Zealand, followed by Qantas, reduced their domestic fares. In a
press release on 19 January 2007, Air New Zealand announced that "fares will fall by up to
26%". A week later Qantas announced that it was also lowering its airfare structure, a move
analysts said was in response to Air New Zealand's fare cut (Keown, 2007). The fare cuts
could have been seen as an attempt to stimulate demand in a rather static market. After all in December 2006, Qantas had announced that declining passenger numbers was a factor in them stopping their Wellington to Christchurch service.
6) A SWOT analysis of Air New Zealand
Air New Zealand Limited (ASX:AIZ, NZX: AIR, Air New Zealand) is a
scheduled passenger airline based in Auckland, New Zealand, and the national
flag carrier. Its focus is on Australasia and the South Pacific, with services to
Europe, North America and Asia, and it is a Star Alliance member. Its main hub
is Auckland Airport.
Air New Zealand has 3 major international routes that are Europe,
Asia&Australasia and Americas. Its plane can be nonstop to those main cities
in the world. Air New Zealand has the excellent honour of services.
Air New Zealand has higher price than some smaller airline. Its routes has not
contact any middling cities.
Not long ago, The Helen Clark signed of the New Zealand-China Free Trade
Agreement (FTA) with China. It is a opportunities for Air New Zealand to
extend the Asia routes.
Asia routes are very seasonal. The most people go to Asia from September to
next year January. Because by this term, the international student get holiday,
Chinese, Korean and some Southeast Asia’s people need to celebrate Chinese
new year. So other time, can be less the flying times every weeks. The study finds that shorter distance routes have average fares per kilometre significantly greater than longer distance routes. It is also established that monopoly routes have average fares up to 20% greater than on a duopoly with Qantas offering fares on average up to 22% lower than those offered by Air New Zealand. Further, the analysis finds that shorter distance routes have a substantial price premium for peak time and sold-out flights compared to
longer distance flights. There is also evidence of a negative relationship between competition and price dispersion, consistent with the conventional textbook treatment of price discrimination. This paper also provides verification of a fall in average fares in 2007 compared to 2006, following an announcement of lower Air New Zealand and Qantas fares in early 2007.