May 12, 2025 • 11 mins
More people could be set to fly Jetstar due to ongoing angst around aviation prices.
This comes following a Commerce Commission complaint from a man who was stunned by the cost of an Air New Zealand direct flight to Wellington.
The airline defended its prices, saying their fares reflected the 'true cost of flying'.
Jetstar CEO Stephanie Tully told Mike Hosking travel remains important to people, and they play an important role.
She says most people are feeling a cost of living pressure, and that's where Jetstar becomes a good choice.
It’s also seen an uptick in reliability.
Tully says that based on their operational performance report, they were more reliable than Air New Zealand in March.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Last week one of the listeners to the Greek Foreign
Interview were the good folks at Jetstar four and is
on his way out. Of course, some of the changes
on problems he faced in his time, he claimed, will
be sort of by the time he leaves in October.
The debate remains. They are around pricing and especially regionally
in this country, with the Finance Minister keen on the
market studying the Prime Minister not so much. Jet Star
is the cheap alternative, of course, it also the airline
with a reputation that isn't that reliable. It also picks
(00:22):
the roots it competes on, reminding us that a population
of five million, maybe maybe one of the bet airlines
is all we can basically handle. Anyway, let's talk aviation
CEO of jet Star out of Australia this morning, and
Stephanie Tully, who is with us. Very good morning to
you morning, Mike.
Speaker 2 (00:37):
Are you doing very well?
Speaker 1 (00:38):
Indeed, I've been reading some interesting reports out of Australian
aviation that was I think what they referred to as
a white paper, and that we're talking about the border
security in the last couple of days. Is there an
angst in general terms? Around aviation and Australia, the price
of tickets getting from A to B, getting in and
out of the country, and all of that. Post COVID.
Speaker 2 (00:58):
Oh look, I think there's a cost of living pressure
so that everyone's feeling both in Australia and New Zealand.
And I guess that's where jet Star becomes a great
choice because you know, everyone at Jetstar works together to
make travel more affordable and accessible. And I think what
we've seen with Jetstar and with our operational performance and
our brand improving over the last few years, we've seen
(01:20):
a lot more people choosing jet Star. So I think
there's always that pressure in the environment when you've got
higher inflationary pressures. But you know, that's where jets Star.
I think our whole purpose for being becomes very relevant
because consumers still want to travel. We've seen since COVID
people you know, prioritizing travel over spend on other things
after what they went through. So I think travel remains
(01:42):
really key for Australians and New Zealanders because of where
we're placed in the world, and I think it's in
our DNA to want to travel. So I think that's
why we think Jetstar plays such an important role.
Speaker 1 (01:52):
Some of the American airlines I note, and some of
the cruise lines are now suggesting that the post COVID
madness is peaking or has peaked. Are you seeing any
of them?
Speaker 2 (02:03):
Yeah, I mean, I think we went through a very
big peak post COVID of just you know, demand out
stripping outstripping supply as airlines got back on their feed
and consumers were desperate to travel not only for holidays
but to see family and friends that they had not
been able to do during COVID. We still see it
heightened from pre COVID levels, So we think there's been
(02:25):
a structural change. And I think for New Zealanders and Australians,
you've got you know, you're far away from from the
rest of the world, You're essentially Irelands. So I think
that is not only historically in our in our DNA
to wanna travel, but I also think COVID might have
structurally changed that that you actually prioritize that travel and
you're mailling to spend on travel than you know, consumer
(02:46):
goods and other things. We see that in our insights
and we think that that's still heightened.
Speaker 1 (02:51):
Is your model the same internationally? It is as it
is domestically in terms of it is cheap.
Speaker 2 (02:58):
Yeah, how we want to be low fares leader in
the markets we operate. We are focused on our cost
base wherever we can to make sure we can keep
you know, delivering low fares. It's absolutely what we're trying
to do in New Zealand. We've been working really hard
as a team. I think, you know, we employ over
four hundred people over there to just make sure that
we're reliable so that people want to fly Jet Star
(03:21):
and I think what people are looking for is great
value and Jet Start. Really it's about offering low fares,
being reliable, and also giving people choice in the way
they travel, so they can choose the extras if they want,
but they don't have to if they don't want, So
you've got that option. And I think we don't see
ourselves MIC is half an our line. We see ourselves
as a full air line, you know, offering a real choice.
(03:43):
We don't take for granted that Kiwi's every time they
travel have a choice of who they fly with. So
we want to be in that. In that choice consideration,
whether you're traveling for work or for leisure.
Speaker 1 (03:55):
You would concede though that you cheery pick the roots,
and you cheery pick the roots that you think you
can make. That's fair, isn't it?
Speaker 2 (04:01):
Here? Absolutely absolutely, because we have had experience in the past,
so we've operated on some of the thin roots and
we just were losing money, you know, and it's difficult
with a strong national carrier you're competing against. But we
I mean, we definitely see room for more growth over there.
We're concerned about some of the cost pressures over there,
(04:23):
particularly Auckland Airport, but you know, we see there's room
for potentially us putting more aircraft over there. We've had
a lot of growth on the trans Tasmin. We've got
you know, three new routes launching a couple of weeks
to Hamilton and Dunedin, and we're excited for more growth there.
We've just got to make sure that you know, we're
getting the best cost environment that jet stuck and.
Speaker 1 (04:43):
Keep Auckland dearport aside. I don't excuse Auckland report as
far as I can get. No one likes Auckland Airport,
but cost pressures that going. Are we doing something cost
pressure wise wrong in this country? That needs to be
attended to.
Speaker 2 (04:57):
Yeah, I mean I think there's a couple of things
where we're on I think, you know, the airport costs,
particularly Auckland, as you say, are high. We think their
development is overdone. So it's good that it's you know,
the prices we're reduced following the Commerce Commissions report, but
we think it's still overspect and overdone. And I think
you've got to be really careful, you know, with infrastructure
spend that you're spending the right amount. You know that
(05:20):
travel still remains affordable whilst delivering what you need. So
where we think New Zealand's tourism sector is still recovering,
we think there's more we can do with the government
around some of your fees. So we're working with the
government on how, you know, how we make sure that
New Zealand's tourism sector thrives like it should. I think
there's some disproportionate fees in place, and we want to
(05:40):
make sure that particularly the gateway between Australia and New
Zealand and some of that more short haul Pacific Island
travel is not disproportionately affected by fees compared to some
of the longer haul travel as well. So there's things
we're working on to try and make mark that environment better.
Speaker 1 (05:56):
Just reputationally speaking, Stephan, I don't expect you necessarily coming
on in New Zealand, but you'll be well aware of
how many New Zealanders view in New Zealand at certain times,
and sometimes it's their fault and sometimes it isn't. Compare
it with Quantus, who's gone through something similar. Our airlines
just easy targets for people to get angry with.
Speaker 2 (06:16):
And I think people are passionate about airlines. It's something
people love to do, is to fly and travel, and
therefore they love to talk about it. So I think,
you know, it happens. I think you've just got to focus,
you know, on your own race, and we've been focusing
in New Zealand particularly on just being good and being
a good competitor and making sure that any history New
(06:40):
Zealanders have with the Jet Star brand, we can prove
that we are a reliable, great offering and a choice.
So I think, I mean, I think it is just
something people love to talk about, and you've got to
take not take that for granted.
Speaker 1 (06:51):
You would say that, wouldn't you, because you're the CEO,
But have you hand on heart, genuinely gone through that
it's in the past. Jets are a bit une liable.
Not many planes may turn up, might not.
Speaker 2 (07:05):
I think so if you look at our operational performance
like the last six months, we're pretty much equal to
a New Zealand. In fact, in March we were more
reliable than them and we had a really low cancelation
ratear I'm proud of everything everyone's done over there to
just be focused on it, and I think we see
it in our insights that you know, our brand has
improved and people are seeing it as a genuine choice.
(07:26):
And there's lots of commentary online. I can see, for example,
for the next three months that we're usually around fifty
percent cheaper, and I think that's it's hard to ignore
and it's a genuine option for New Zealanders, and I think,
you know, with the precious people are feeling, it's it's
I think we've become a great alternative and a great
option to fly with it, and the reliability is much
(07:47):
stronger than it was historically. So we'll keep working at
that because you know, we know that's so important to
people when they're flying us.
Speaker 1 (07:54):
Can you make money doing what you do. The reason
they asked that question as Emmerates came out the other
day and they're making record profits for the third year
in a row. Quantas are making huge profits, Singapore making
massive profits. Is that is that? Is that a model
based thing or can any align if they do it right,
make money?
Speaker 2 (08:11):
Yeah, you can. I think, I mean, Jetstar is on
track for a record result this year. And I think,
you know, for us, it's harder because the margins are
thinner with low cost carriers. You've got to be really
focused on keeping your cost based low. But we also
you know, don't offer sort of all the bells and
whistles that cost money to airlines. So there's proof around
(08:32):
the world that that that both models, the full service
model and the lo cost model can be very successful.
And I think, you know, we were the first low
cost carrier into Australia. We are the only low cost
carrier in New Zealand. And I think it's you know,
I think it's there's been a lot of growth for
demand for that type of travel and we can. I mean,
I commute between Melbourne and Sydney. Over here, I see
(08:53):
every week people flying for the first time ever because
of Jetstar, and I think it's you know, it's unlocked
travel for people that otherwise wouldn't be able to afford it,
which is just we're really proud to play that role
to be able.
Speaker 1 (09:04):
Well, which is interesting because there's no shortage of reading
from major airlines who cannot spend enough money at the
other end of the plane front loading business and first
and upgrading you to caviat and showers and massages, and
there's clearly money in that, there's margin in that, and
you're arguing your model works as well.
Speaker 2 (09:22):
Yeah, I think they both can. I see it working
for a Jill Brown carrier with Quantus, but the different
you've got to work on different things. I think for
Quantis it's about, you know, how do you deliver value
that allows it allows the premium. For jet Star, it's
how do you manage your costs so you can keep
fares low which drives demand at this end of the market.
So I think, you know, they're different business models, but
(09:45):
both can be successful if done well.
Speaker 1 (09:47):
I know you didn't like the half airline. What I'm
suggesting to you and you've seen it Australia, Quantus, Jetstar,
Virgin Rex is gone. Is that Australia. That's what Australia
can handle. Therefore, in New Zealand at an ear New
Zealand and the JIT Star, that's about it.
Speaker 2 (10:02):
Yeah, I mean, I think the thing you need to
do as airlines is balanced the demand for travel with
the supply of the airlines that provide that travels. So
you know, I think if you outstrip supply versus demand,
there's going to be economic problems for airlines. So I
think you know, they're not big countries, you know, and
(10:22):
so probably in New Zealand two carriers feels right in
Australia similar but I think you know, we want to
be over there just a genuine second carrier and provide
options where we can. And we are looking Mike for
growth where we can as well, because we think there's
there's opportunity and if you look at it, you know
(10:43):
trans Tasman, you know there's opportunity for growth there, we
think in Pacific Island as well. So we'll keep looking,
you know, for opportunities to do that, like we've done
with christ Church and Hamilton and Dunedin as well.
Speaker 1 (10:55):
Great Stuff's definitely good to have you on the program.
Appreciate your time. Go well Stiffane Tully, who is the
Jetstar ce oh with us out of Sydney this morning.
For more from the Mic Asking Breakfast, listen live to
News Talks at B from six am weekdays, or follow
the podcast on iHeartRadio
Last week one of the listeners to the Greek Foreign
Interview were the good folks at Jetstar four and is
on his way out. Of course, some of the changes
on problems he faced in his time, he claimed, will
be sort of by the time he leaves in October.
The debate remains. They are around pricing and especially regionally
in this country, with the Finance Minister keen on the
market studying the Prime Minister not so much. Jet Star
is the cheap alternative, of course, it also the airline
with a reputation that isn't that reliable. It also picks
(00:22):
the roots it competes on, reminding us that a population
of five million, maybe maybe one of the bet airlines
is all we can basically handle. Anyway, let's talk aviation
CEO of jet Star out of Australia this morning, and
Stephanie Tully, who is with us. Very good morning to
you morning, Mike.
Speaker 2 (00:37):
Are you doing very well?
Speaker 1 (00:38):
Indeed, I've been reading some interesting reports out of Australian
aviation that was I think what they referred to as
a white paper, and that we're talking about the border
security in the last couple of days. Is there an
angst in general terms? Around aviation and Australia, the price
of tickets getting from A to B, getting in and
out of the country, and all of that. Post COVID.
Speaker 2 (00:58):
Oh look, I think there's a cost of living pressure
so that everyone's feeling both in Australia and New Zealand.
And I guess that's where jet Star becomes a great
choice because you know, everyone at Jetstar works together to
make travel more affordable and accessible. And I think what
we've seen with Jetstar and with our operational performance and
our brand improving over the last few years, we've seen
(01:20):
a lot more people choosing jet Star. So I think
there's always that pressure in the environment when you've got
higher inflationary pressures. But you know, that's where jets Star.
I think our whole purpose for being becomes very relevant
because consumers still want to travel. We've seen since COVID
people you know, prioritizing travel over spend on other things
after what they went through. So I think travel remains
(01:42):
really key for Australians and New Zealanders because of where
we're placed in the world, and I think it's in
our DNA to want to travel. So I think that's
why we think Jetstar plays such an important role.
Speaker 1 (01:52):
Some of the American airlines I note, and some of
the cruise lines are now suggesting that the post COVID
madness is peaking or has peaked. Are you seeing any
of them?
Speaker 2 (02:03):
Yeah, I mean, I think we went through a very
big peak post COVID of just you know, demand out
stripping outstripping supply as airlines got back on their feed
and consumers were desperate to travel not only for holidays
but to see family and friends that they had not
been able to do during COVID. We still see it
heightened from pre COVID levels, So we think there's been
(02:25):
a structural change. And I think for New Zealanders and Australians,
you've got you know, you're far away from from the
rest of the world, You're essentially Irelands. So I think
that is not only historically in our in our DNA
to wanna travel, but I also think COVID might have
structurally changed that that you actually prioritize that travel and
you're mailling to spend on travel than you know, consumer
(02:46):
goods and other things. We see that in our insights
and we think that that's still heightened.
Speaker 1 (02:51):
Is your model the same internationally? It is as it
is domestically in terms of it is cheap.
Speaker 2 (02:58):
Yeah, how we want to be low fares leader in
the markets we operate. We are focused on our cost
base wherever we can to make sure we can keep
you know, delivering low fares. It's absolutely what we're trying
to do in New Zealand. We've been working really hard
as a team. I think, you know, we employ over
four hundred people over there to just make sure that
we're reliable so that people want to fly Jet Star
(03:21):
and I think what people are looking for is great
value and Jet Start. Really it's about offering low fares,
being reliable, and also giving people choice in the way
they travel, so they can choose the extras if they want,
but they don't have to if they don't want, So
you've got that option. And I think we don't see
ourselves MIC is half an our line. We see ourselves
as a full air line, you know, offering a real choice.
(03:43):
We don't take for granted that Kiwi's every time they
travel have a choice of who they fly with. So
we want to be in that. In that choice consideration,
whether you're traveling for work or for leisure.
Speaker 1 (03:55):
You would concede though that you cheery pick the roots,
and you cheery pick the roots that you think you
can make. That's fair, isn't it?
Speaker 2 (04:01):
Here? Absolutely absolutely, because we have had experience in the past,
so we've operated on some of the thin roots and
we just were losing money, you know, and it's difficult
with a strong national carrier you're competing against. But we
I mean, we definitely see room for more growth over there.
We're concerned about some of the cost pressures over there,
(04:23):
particularly Auckland Airport, but you know, we see there's room
for potentially us putting more aircraft over there. We've had
a lot of growth on the trans Tasmin. We've got
you know, three new routes launching a couple of weeks
to Hamilton and Dunedin, and we're excited for more growth there.
We've just got to make sure that you know, we're
getting the best cost environment that jet stuck and.
Speaker 1 (04:43):
Keep Auckland dearport aside. I don't excuse Auckland report as
far as I can get. No one likes Auckland Airport,
but cost pressures that going. Are we doing something cost
pressure wise wrong in this country? That needs to be
attended to.
Speaker 2 (04:57):
Yeah, I mean I think there's a couple of things
where we're on I think, you know, the airport costs,
particularly Auckland, as you say, are high. We think their
development is overdone. So it's good that it's you know,
the prices we're reduced following the Commerce Commissions report, but
we think it's still overspect and overdone. And I think
you've got to be really careful, you know, with infrastructure
spend that you're spending the right amount. You know that
(05:20):
travel still remains affordable whilst delivering what you need. So
where we think New Zealand's tourism sector is still recovering,
we think there's more we can do with the government
around some of your fees. So we're working with the
government on how, you know, how we make sure that
New Zealand's tourism sector thrives like it should. I think
there's some disproportionate fees in place, and we want to
(05:40):
make sure that particularly the gateway between Australia and New
Zealand and some of that more short haul Pacific Island
travel is not disproportionately affected by fees compared to some
of the longer haul travel as well. So there's things
we're working on to try and make mark that environment better.
Speaker 1 (05:56):
Just reputationally speaking, Stephan, I don't expect you necessarily coming
on in New Zealand, but you'll be well aware of
how many New Zealanders view in New Zealand at certain times,
and sometimes it's their fault and sometimes it isn't. Compare
it with Quantus, who's gone through something similar. Our airlines
just easy targets for people to get angry with.
Speaker 2 (06:16):
And I think people are passionate about airlines. It's something
people love to do, is to fly and travel, and
therefore they love to talk about it. So I think,
you know, it happens. I think you've just got to focus,
you know, on your own race, and we've been focusing
in New Zealand particularly on just being good and being
a good competitor and making sure that any history New
(06:40):
Zealanders have with the Jet Star brand, we can prove
that we are a reliable, great offering and a choice.
So I think, I mean, I think it is just
something people love to talk about, and you've got to
take not take that for granted.
Speaker 1 (06:51):
You would say that, wouldn't you, because you're the CEO,
But have you hand on heart, genuinely gone through that
it's in the past. Jets are a bit une liable.
Not many planes may turn up, might not.
Speaker 2 (07:05):
I think so if you look at our operational performance
like the last six months, we're pretty much equal to
a New Zealand. In fact, in March we were more
reliable than them and we had a really low cancelation
ratear I'm proud of everything everyone's done over there to
just be focused on it, and I think we see
it in our insights that you know, our brand has
improved and people are seeing it as a genuine choice.
(07:26):
And there's lots of commentary online. I can see, for example,
for the next three months that we're usually around fifty
percent cheaper, and I think that's it's hard to ignore
and it's a genuine option for New Zealanders, and I think,
you know, with the precious people are feeling, it's it's
I think we've become a great alternative and a great
option to fly with it, and the reliability is much
(07:47):
stronger than it was historically. So we'll keep working at
that because you know, we know that's so important to
people when they're flying us.
Speaker 1 (07:54):
Can you make money doing what you do. The reason
they asked that question as Emmerates came out the other
day and they're making record profits for the third year
in a row. Quantas are making huge profits, Singapore making
massive profits. Is that is that? Is that a model
based thing or can any align if they do it right,
make money?
Speaker 2 (08:11):
Yeah, you can. I think, I mean, Jetstar is on
track for a record result this year. And I think,
you know, for us, it's harder because the margins are
thinner with low cost carriers. You've got to be really
focused on keeping your cost based low. But we also
you know, don't offer sort of all the bells and
whistles that cost money to airlines. So there's proof around
(08:32):
the world that that that both models, the full service
model and the lo cost model can be very successful.
And I think, you know, we were the first low
cost carrier into Australia. We are the only low cost
carrier in New Zealand. And I think it's you know,
I think it's there's been a lot of growth for
demand for that type of travel and we can. I mean,
I commute between Melbourne and Sydney. Over here, I see
(08:53):
every week people flying for the first time ever because
of Jetstar, and I think it's you know, it's unlocked
travel for people that otherwise wouldn't be able to afford it,
which is just we're really proud to play that role
to be able.
Speaker 1 (09:04):
Well, which is interesting because there's no shortage of reading
from major airlines who cannot spend enough money at the
other end of the plane front loading business and first
and upgrading you to caviat and showers and massages, and
there's clearly money in that, there's margin in that, and
you're arguing your model works as well.
Speaker 2 (09:22):
Yeah, I think they both can. I see it working
for a Jill Brown carrier with Quantus, but the different
you've got to work on different things. I think for
Quantis it's about, you know, how do you deliver value
that allows it allows the premium. For jet Star, it's
how do you manage your costs so you can keep
fares low which drives demand at this end of the market.
So I think, you know, they're different business models, but
(09:45):
both can be successful if done well.
Speaker 1 (09:47):
I know you didn't like the half airline. What I'm
suggesting to you and you've seen it Australia, Quantus, Jetstar,
Virgin Rex is gone. Is that Australia. That's what Australia
can handle. Therefore, in New Zealand at an ear New
Zealand and the JIT Star, that's about it.
Speaker 2 (10:02):
Yeah, I mean, I think the thing you need to
do as airlines is balanced the demand for travel with
the supply of the airlines that provide that travels. So
you know, I think if you outstrip supply versus demand,
there's going to be economic problems for airlines. So I
think you know, they're not big countries, you know, and
(10:22):
so probably in New Zealand two carriers feels right in
Australia similar but I think you know, we want to
be over there just a genuine second carrier and provide
options where we can. And we are looking Mike for
growth where we can as well, because we think there's
there's opportunity and if you look at it, you know
(10:43):
trans Tasman, you know there's opportunity for growth there, we
think in Pacific Island as well. So we'll keep looking,
you know, for opportunities to do that, like we've done
with christ Church and Hamilton and Dunedin as well.
Speaker 1 (10:55):
Great Stuff's definitely good to have you on the program.
Appreciate your time. Go well Stiffane Tully, who is the
Jetstar ce oh with us out of Sydney this morning.
For more from the Mic Asking Breakfast, listen live to
News Talks at B from six am weekdays, or follow
the podcast on iHeartRadio
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