Good on them, more competition on domestic air routes. It reminds me again of the debates in the 1980s when old Labour (yes before 1984) fought AGAINST deregulating the domestic airline market - and then in power opened it up to 100% foreign owned competition.
Something Jim Anderton and Winston Peters opposed vehemently, because they loved old fashioned state owned Air NZ. Of course Air NZ is new fashioned mostly state owned now (albeit a publicly listed one).
The domestic airline market has gone through a full cycle. Before 1987 and Ansett NZ, there was next to no service and fares were expensive. Ansett saw more discount fares, but also saw airline lounges, airbridges, business/first class and hot meals appear on domestic flights. I recall a column by Chris Trotter who saw domestic business class being some sort of class divider between the "haves" and "have nots". I never figured why people who flew were ever "have nots". On top of that, who the hell ever flew domestic business class unless they were:
a. Connecting to a long haul business class flight, so it was part of the ticket;
b. Using a free upgrade voucher which you got as a Gold/Gold Elite airpoints member; or
c. A politician (Rodney Hide used to say he had to fly Business Class to meet his constituents, but Laila Harre also regularly flew business class between Auckland and Wellington).
Then Ansett became Qantas NZ, then Qantas before Air NZ dropped business class and hot meals a few years ago, to go no frills. Qantas followed suit. Now Pacific Blue is coming in with no frills, Air NZ is responding by introducing a few rows in the front with around 4-5 inches more legroom for "premium customers " (likely Gold Elite/Gold status frequent flyers, full fare passengers and passengers connecting to business class international flights). Qantas has also announced it is upgrading NZ domestic lounges and installing upgraded interiors, more food service and a free evening bar service on flights.
S0 you might get a good deal on Pacific Blue, but frankly I'm looking forward to sitting at the front end of Air NZ with international long haul economy class legroom, or getting fed for free again on domestic flights. No doubt Chris Trotter will bemoan this as representing a new bastion of the class struggle!