Reply To: ANZ flat beds in economy

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MichelAngelo: you’re absolutely right about Economy being all about economy. It’s remarkable how many (particularly but not exclusively) leisure passengers willingly go for a £20/2.5% round-trip saving but lumber themselves with a 7 hour or 9 hour connection that they only regret when it’s too late.

Lots of them, of course, are on once-in-a-lifetime trips when the Antipodes are involved, and the chances of them making another trip like that in the short term are limited – though admittedly growing as the years pass and propensity to travel grows – so repeat custom, recommendation and referral is less of an issue/risk.

The snag for NZ in this market is, and has always been, that it can’t compete with the cost base of the Asian and Mid East carriers to Asia and points West and, to a certain extent, with the US ones going the other way. Their lower-cost, outsourced Zeal crews only operate A320s, not long haul. So, accepting that their fares were always going to be higher in Y than MH, TG, EK and even SQ and CX, they went down the route of a clear differentiator with 34″ pitch.

This then marks quite a significant change for them – perhaps the way that they’ve crunched the numbers apes BA’s model slightly more, and majors on premium yields to support effectively subsidised Y fares.

I still think that the Skycouch is PR-spin and little more though. TV3 in NZ are reporting a likely fare of 7000NZD (3000GBP) AKL-LHR for a couple. That’s 1500GBP each, when EK are selling Y at 687GBP and CX at 699GBP this year.

I wish NZ well, and I’m really impressed by the potential of the PE cabin in particular, but were I a shareholder I’d seriously question any significant revenue forecasts being pinned on Skycouch.

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