Air New Zealand AU and NZ Price Discrepancy

When booking Air New Zealand flights across the Tasman I have noticed that there is often an observable price difference when booking the same flight on the NZ or AU websites. Even when taking the exchange rate in to account there is sometimes a significant difference.

The situation is particularly bad at the moment because the Australian website has a deal on Sydney to Auckland/Wellington flights. For example, booking a flight from Sydney to Wellington current costs AUD231 on the Australian website and NZD333 on the New Zealand website. Using today’s exchange rate of 1NZD->0.92AUD that works out to be $333 versus $251.09 (in NZD). Thats a difference of NZD81.91. The following two pictures show the difference in price of the same flights.

Note that the flights are specials on the Australian website so they come with less Airpoints and status points. Also note that when you attempt to log in to your Air New Zealand Airpoints account, a message is displayed suggesting that you navigate to the New Zealand website with the higher prices. If you enter the Airpoints number later in the purchasing process, you are still able to get the benefits such as selecting frequent flyer seats, claiming status/airpoints etc. So it would appear that not a whole lot is to gain by navigating to the New Zealand website and paying the higher price.

I would like to see Air New Zealand make the pricing more consistent between the two websites (obviously with some leeway for exchange rate movements).


I received this from Air New Zealand in response to a question asking why the pricing is different,

Hi Joel, thanks for getting in touch. Our Revenue Management department as well as Marketing teams, determine the pricing strategies for the various regions we operate to and from. There are many factors and considerations involved in this pricing. Air New Zealand does not operate a cost-plus pricing strategy that would result in identical pricing across all points of sale. If we did operate a cost-plus pricing strategy, you would not see tactical prices at the levels you see today because these do not recover the cost of operating the flight. Instead, we have a pricing strategy that is driven by market forces dictated by the market in which the sale is made. Market forces unique to each region of sale will determine how much travelers are prepared to pay for travel compared to other goods in their home country and indeed for New Zealand travel compared to other destinations. With this type of pricing strategy, you will see differences between fares available in different sales regions. These can be aggravated from time to time where currency fluctuation occurs. Hope this clarifies things for you.

They are saying that the price difference is to support local marketing strategies for the market. I would argue however that the market is not truly local, given that globally anyone can buy the same ticket from another website (with a different top-level-domain). Having the ability to access the site and purchase with an international credit card with no terms denying international customers turns the market global.

This feels to me like Air New Zealand is using a lower price in their ‘virtual’ local market to compete with competition from air lines commonly used from within that same market. At the same time they are punishing users in a different ‘virtual’ market for not checking elsewhere. The model appears to rely on users in general not bothering to check if the price is cheaper through other entry points. For example, if _all_ users check all of the localised web site prices then they could not use this as a marketing strategy at all.

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A software / web applications developer, living in Hamilton and currently studying at Waikato University.

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