TAANZ On Air NZ Fare Changes - Press Kit

Key Points For Media

- TAANZ welcome cheaper domestic fares for the travelling public and are concerned that once down, these fares stay down. This will only happen if the consumer has choice.

- Over the last two years, with minimal competition, Air New Zealand has been hiking its fares. They are only reducing fares now because competition is on the move.

- Air New Zealand’s focus is on it’s own survival and market dominance, not TAANZ customers. Air New Zealand don’t want consumers to have choice, they want them to have Air New Zealand.

- Air New Zealand’s withdrawal of agent’s commission is presumably to save the consumer cost. Actually, we believe the underlying intent is to reduce our influence with the domestic consumer and reduce choice.

- Air New Zealand will entice consumers to deal with them directly, particularly via the internet, with the claim of the cheapest deal - but all they will offer is Air New Zealand, not real choice..

- Research by Carlson Wagonlit in the US shows that when compared with the internet, travel agents accessed the cheapest fare in 94% of corporate travel cases.

- Recent US research has found that despite the internet and withdrawal of travel agents’ commission, 78% of US travellers still use a travel agent. This drives the airlines crazy.

- Travel agents offer choice and are advocates for the travelling public, providing personal service, knowledge and expertise, independent advice on all available fares, real value for money, and above all, genuine choice.

- Active choice stimulates competition, which is always good for the consumer. Reduced choice will inevitably result in higher travel costs for the consumer.

- Our message to Air New Zealand is “you fly the planes, let us look after the customer”.

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What Do Travel Agents Offer A Consumer?

What is the role of the travel agent?

The travel agent is the advocate for the travelling public. As experts in understanding the intricacies of the travel business, travel agents provide guidance and expertise, independent advice, best fares, best value for money and above all genuine choice.

To provide convenient one-stop shopping to travellers. Travel agents save consumers time and money by handling all aspects of travel, from air tickets, to car rentals, coach and train reservations, accommodation and activities.

What value does a travel agent provide?

The best value for money. Travel agents tell you about all available choices, about special promotions and advise on the quality and value of a particular product.

Maximum choice. Travel agents give you a wide variety of travel options and quotes from competing travel suppliers.

What are the implications of the Air New Zealand announcement to consumers?

We encourage customers to seek the level of service, and therefore the type of agent, that suits their needs.

There’s no doubt that this will have an impact on our industry, but our members are ready for this and we believe it will result in a strong industry with a stronger sense of customer service and advocacy. In saying that recent US research has found that despite the internet and withdrawal of commission, 78% of travellers still use a travel agent.

Why should a consumer continue to use a travel agent?

Travel agents are focused on the needs of the consumer, not the airlines or any other travel supplier and therefore provide unbiased information. Buying travel is a complex business. There are all sorts of conditions around discounts and fare availability changes by the day, the hour and even the minute.

Travel agents are there for the consumer, their only objective is to get the best value for the consumer.

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Taanz Fact Sheet

Travel agents enjoy strength in numbers through their industry advocate, TAANZ - The Travel Agents Association of New Zealand. Almost every travel agent in New Zealand is a bonded TAANZ member.

TAANZ is one of the world’s strongest travel agents’ associations. It represents the interests of the whole industry, consulting widely with members and their groups. It is completely independent and supports all retail travel agents in their relationships with principal suppliers, customers and the wider tourism industry. TAANZ is the voice of industry with Government and other industries.

TAANZ also works for the best interests of New Zealand travellers, by securing the best arrangements and protection possible and, with its members, by promoting a Code of Ethics and Practice. Through its Bonding Protection Scheme, TAANZ provides consumer protection against a member’s failure to properly account to suppliers or intermediaries for monies received.

TAANZ works with the Aviation, Tourism and Travel Training Organisation to train staff in the skills required for the 21st century - customer relations, selling skills, e-commerce, new technology, the law and the travel industry.

TAANZ was founded in 1969 and represents 611 full member locations - retail travel agents, tour operators and their branch locations. A further 121 suppliers to the travel industry - such as airlines, hotel chains, tourism organisations and rental car companies - are allied members of TAANZ.

The TAANZ Board is made up of elected representatives of its members, and operates a Secretariat based in Wellington. The current President is Mr James Langton.

What does TAANZ Offer its Members?

- Independence Unbiased representation.

- Negotiation With supplier groups, tourism industry decision makers, Government.

- Advice On how to set up an agency, implement fees for services, handle

risks, manage relationships, and deal with ethical, legal and financial issues.

- Consultation A strategy group of industry leaders advises TAANZ on issues

affecting agents.

- Alliances Powerful relationships with international groups like UFTAA (the

world body), and UAPA (Asia Pacific region).

- Agreements With airlines and accommodation providers, securing benefits for

TAANZ members.

- Indemnity Insurance and legal defence against supplier collapse and default.

- Education Standards, qualifications, workshops and professional development.

- Mediation In members disputes with customers or suppliers.

- Networking For travel agents, tour operators and suppliers.

- Technology Links to the TAANZ Net web site and access to computerised

reservation systems.

- Discounts Credit card merchant fees, telecommunications, fuel, medical

insurance, the international Travel Agents Card.

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Carlson Wagonlit Travel Publishes White Paper:

Examining Web Fares in Corporate Travel (6/28/2002)

Carlson Wagonlit Travel (CWT) Solutions Group-- North America-- has recently released a white paper examining the ever-growing issues surrounding the use of Web fares in the corporate travel arena.

With travel concerns in corporations today and the constant battle of managing costs, many business travelers and travel managers alike are looking for ways to reduce travel

expenses. Web fares have proven to be at center of the debate. Airlines have aggressively advertised Web fares as having lower prices for travel to popular destinations. However, airlines also have the discretion to make these fares accessible to only certain non-GDS sites and to load "private" fares into GDS-powered sites.

The findings of the white paper brought out issues for business travelers such as accessibility, travel patterns, and requirements of corporate policy. The overall findings conclude that the GDS is still the best choice for corporate travel when searching for the lowest fare within an established travel policy. In fact, when traveling within the normal

business policy parameters, the travel agency GDS showed a lower fare in 94 percent of those searches.

Another compelling issue surrounding the issue is the fact that with preferred supplier discounts and looking only through the GDS, travelers were still seeing a substantial savings over Internet fares. Other qualitative benefits identified in the use of corporate travel agencies include the ability of corporations to track, and have access to their

travelers' schedules at any given time.

Steve Shook, Vice President of CWT Solutions Group, says the response from clients has been overwhelmingly positive. "Many of the travel mangers we work with have expressed appreciation for the extensive work completed; allowing them to make a truly informed decision. Others have told us they have passed the information on to their CFO's to provide the quantifiable data they need."

The white paper was a collaborative effort of the CWT Solutions Group. "The team has a wealth of experience in gathering and analyzing data, corporate fairing and Internet searches." Shook said. The data used was collected from Internet searches, airline interviews and client surveys. Each data collection method was geared towards its respective audience¡Xasking specific questions revolving around such things as new trends, competitive issues, policy, and web strategies. Shook added, "We will continue to watch the issues surrounding the use of Web fares in the corporate travel environment. We will periodically refresh our analysis to confirm the findings reflect current market conditions."

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AIR NEW ZEALAND FARES AS OF 31 JULY, 2002

Routing Y M H Q7RT

Auckland/Wellington/Auckland $ 795.60 $ 737.59 $ 637.60 $ 396.59

Auckland/Christchurch/Auckland $ 1,051.60 $ 971.59 $ 839.58 $ 501.59

Auckland/Hamilton/Auckland $ 417.60 $ 391.59 $ 341.59 $ 218.59

Auckland/Rotorua/Auckland $ 551.59 $ 487.59 $ 423.60 $ 281.59

Auckland/New Plymouth/Auckland $ 557.59 $ 535.59 $ 465.59 $ 289.59

Please Note: All above return airfares include insurance levy and GST

Class Approx

Discount One Way Return Refundable Upgradeable Advance Purchase Other Conditions

D - Yes - Yes - No (Business Class)

Y - Yes - Yes - No -

M 10% Yes - Yes Yes No Changes permitted free of charge, subject to class being available.

H 30% Yes - No Yes No Changes permitted free of charge, subject to class being available.

LRT 43% No Yes No Yes No Must be issued 24 hours after booking. Minimum stay 1 Saturday night.

Q7RT 50% No Yes No Yes 7 days Must be issued 24 hours after booking. Minimum stay 1 Saturday night.

V 65% No Yes No Yes 10 days Must be issued 24 hours after booking. Minimum stay 1 Saturday night.

W 70% No Yes No Yes 14 days Must be issued 24 hours after booking or 21 days before departure whichever comes first. Minimum stay 1 Saturday night.

T21OPR 77% No Yes No Yes 21 days Ticket processed 24 hours after booking

Flights must depart either between midday Saturday - midday Sunday , and/or between midday Tuesday - midday Thursday

LBIZ 42% Yes - Yes Yes No Short life fare valid until 31 May 2002. Ticket processed 7 days after booking.

Changes permitted free of charge, subject to class being available.

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