Australian carrier starts prising open New Zealand air monopoly

Jetstar, the budget offshoot of Australia's national carrier Qantas, on Monday began a price war in its opening salvo to crack open the near monopoly that Air New Zealand has over New Zealand's regional routes.

Jetstar announced it would expand its New Zealand operations with four new regional destinations -- Napier, New Plymouth and Palmerston North in the North Island, and Nelson in the South Island -- from December.

When ticket sales opened Monday with prices as low as 9 NZ dollars (5.78 U.S. dollars), the amount of interest reportedly crashed Jetstar's website temporarily.

Economic Development Minister Steven Joyce and Transport Minister Simon Bridges welcomed increased competition in the regional aviation market.

"It's great to see increased air competition into some of our key regional centers. Transport linkages are crucial for regional development and these new air linkages will help boost business and tourism traffic into regions," Joyce said in a statement.

Bridges said the announcement was one of a number of new international and regional air services announced in recent months.

"These new services are a real vote of confidence in our aviation sector and the future prospects of regional New Zealand," Bridges said in the statement.

The Tourism Industry Association New Zealand said the five new services -- one each between the three North Island destinations and Auckland, and services from Nelson to Wellington and Auckland - - would provide a strong regional distribution option for international visitors flying Qantas as well as Emirates, China Eastern, China Southern, American Airlines and their other partners.

Jetstar, which is fully owned by Qantas, launched trans-Tasman flights in 2005 and established domestic operations between New Zealand's major cities in June 2009.

Qantas Group CEO Alan Joyce said in June that New Zealanders had been calling for more choice and lower fares on regional routes because there was a lack of competition.

Air New Zealand, whose majority shareholder is the state, saw a public backlash in April after it pulled out of services to three of its smaller destinations.