Air New Zealand (ANZ) plans to remove business class seats from its Airbus A320s that its operates to Australia and the Pacific islands due to falling demand in the premium travel sector.
These aircraft will be converted to an all-economy class cabin with 171 seats, says the Star Alliance carrier.
"Demand for business class seats out of Wellington and Christchurch has been diminishing to the point where just one of the eight seats is being sold on average per flight," says ANZ's group general manager short haul airline, Bruce Parton.
"This is predominantly due to companies and government departments in these cities cutting back on spending and adopting a policy of economy class travel."
ANZ will retain business class seats on flights out of Auckland on widebody aircraft "at prime times that meet the needs of corporate travellers and those business premier customers connecting with our long haul services", adds Parton.
The move to drop business class seats is part of ANZ's plan to transform its trans-Tasman and Pacific operations later this year in order to be more competitive.
It plans to introduce different fare types to passengers, similar to what some low-cost carriers have rolled out. Travellers will get to choose from four different fare types, from a package with a seat and one carry-on bag to a full package with check-in luggage and lounge access.
ANZ will also cut fares and reduce airport waiting time by streamlining check-in processes, says the carrier.
Christchurch will be the first market to receive the new product offerings in late August, says Parton.
"For more than a year, we have had a team gaining a better understanding of what customers want in these highly competitive markets and the innovative changes we are going to introduce are based on what they have been telling us," he adds.