The managing director and I have today witnessed a rare and unusual event. While sitting in the departure lounge at Queenstown we observe what appears to be a group of fare paying passengers boarding a Jetstar flight and actually taking off. Of course, we have no way of knowing if the flight is on schedule or the umpteenth rescheduled attempt. Given recent stories regarding experiences with Jetstar I’m betting on option B. Here’s a recent review from a colleague who, because he is careful with his money (polite definition for tight arse) has been a loyal and long suffering Jetstar customer:

We were in Bali recently and received a cancellation notice midway through our trip. Fortunately, this didn’t relate to our return leg (that cancellation and notice came later) rather it was for a trip we had booked to Japan which was supposed to depart Boxing Day. The flight had been cancelled and our options were a full refund (sorry kids no holiday, have fun getting refunds for accommodation and ski trips booked and paid for) or a flight on either the 11th of December or 11th of January.

8 hours before the scheduled return leg from Bali we got the first cancellation notice despite the airline advising the media that all their issues had been resolved.

It is not the fact our return flight got cancelled (twice), it is the complete lack of care shown by the airline about the predicament that this leaves you in. Staff are obviously provided with a script and told deliver this and nothing else. There was no effort made at providing assistance for accommodation, other flights, other airlines or even using capacity on Qantas flights.

We’ll never fly Jetstar again


One would wonder if there is a tipping point where a business’s reputation for unreliability and poor service turns away consumers, regardless of price. I guess there will always be people who will need or want the cheap and not so cheerful option. The challenge for business is to decide where they sit in the market. I think we could be seeing a trend where more businesses will move, either willingly or by economic force, to the Jetstar model.

More on that later, but first, a bit about recent experiences on our month long study trip to NZ. Study trip, ski trip, booze and eating the wildlife trip……it’s all a blur!

I can confirm that the South Island is just as beautiful as it was pre-Covid, maybe even more so. Flying into Queenstown and picking up a hire car is super easy, the roads are pretty good and Wanaka remains my version of Noosa with snow. The natives are friendly and it’s all pretty relaxed.

How relaxed ? Well, I backed my enormous 4×4 into a blokes equally huge vehicle the other day. Passenger gets out and we chat about my general ineptitude. He’s not the owner but his mate who is will be back shortly. We are no sooner approached by a heavily muscled and equally tattooed gentleman who identifies himself as said owner. I apologise. He says “no worries bro….I can’t see a mark on mine so all good”. As luck would have it, I can’t see a mark on mine either so we high five and I’m gone!

How relaxed? The MD and I are tootling along on the way to Milford Sound. We overtake a bloke towing a trailer at 90kph in a 100 zone. A short distance later we see a police car with lights on by the side of the road. We tootle past. Another short distance and I observe the police car behind me with lights still on. That’s odd. We’ve had the cruise on 100kph and anyway this bloke’s been in front of us. We pull over and a relaxed and friendly chat with the copper ensues. He’s a nice bloke with zero attitude. He tells me that vehicles with trailers are restricted to 90kmp in NZ and highway patrol cars have speed cameras in the back. He picked me up from 500m in front of me when I got out to pass the car and trailer. The MD decides to debate the merits of overtaking at 100kph when the 118 we were doing seemed imminently safer. The result of that debate sits before me in the form of yet another NZ driving award. $120 bucks seems fair.

We stay in a variety of lodgings over the course of the trip and speak with many accommodation and tourism operators. No one can get staff and in fact the situation in NZ seems even more dire than in Oz. In Queenstown it looks like only half the venues and restaurants are open on any given day and many fine dining establishments are only open for dinner, if at all.

It seems clear talking to hotel and accommodation managers that Covid has driven some pretty big changes in guest profiles. Domestic tourism demand, particularly in the upper end market, is up. So is Australian demand at all levels and the Americans are back big time in the luxury lodge market. The people from the States that we spoke to seem to see NZ and OZ as a joint destination, which makes sense. Perhaps some joint marketing might not be a bad idea. There’s some serious money around looking for bucket list experiences in both countries and it’s a long way to travel to not see both. The exchange rate is not hurting demand either. How much money is around you ask? We met an elderly gentleman at Blanket Bay Lodge and ended up having a few drinks. He was from Texas and a lovely guy. The MD and he really hit it off and when asked what he did for a dollar he confided that he dabbled in oil!

Interestingly the operators at Blanket Bay took a no charges, full cancelation refund policy during Covid. I know because we had cancelled twice due to travel restrictions. The goodwill this generated, at significant cost to the business, has been returned in spades according to management. We were certainly on a mission to support the operators who took this approach during Covid.

Most operators report a significant drop in demand from China, no great surprise given ongoing Covid restrictions in that country. Interestingly, the general consensus seems to be a sense of relief that NZ has diversified its visitor demographic and not placed too much emphasis on one market. I got the distinct impression that Australia and America were the preferred target markets.

Anyway, enough free advertising for our Kiwi comrades, back to Jetstar.

Here’s a theory. Interest rates are up, inflation is up, cost of living is up and no bugger wants to work. Bottom line and service outcomes are under pressure and businesses of all sorts must surely being surveying the landscape and wondering what to do. It’s crunch time and operators in all sectors will be forced to make a choice. Maintain service and reliability standards to the possible detriment of the bottom line or go with the Jetstar model.

I’ll leave the closing words of wisdom to the manager of a beautiful historical house based lodge in Queenstown. They were having so much trouble getting reliable housekeepers that they were forced to make a choice. Open all the rooms and risk an unsatisfactory guest experience or close rooms and restrict operations to the capacity of those housekeepers they could rely on. To their absolute credit they chose option 2 as risking the reputation they’d built over many years just wasn’t worth it.

That’s why Hulbert House will be our first stop next time we stay in Queenstown. It’s a cracker !

BTW……we flew with Qantas and not a glitch from check in to arrival. I see they’ve recently announced a profit upgrade which will be driven by improved efficiencies. That’s corporate speak for flogging the staff a bit harder. Let’s hope they don’t kill the golden goose, or golden roo in this case.

BTW #2…..if you have a bucket list without Blanket Bay Lodge on it may I suggest your list is incomplete. It seems expensive until you get there and then, to quote the KFC ad, shut up and take my money! Go in winter or spring. Hell, just go.

BTW #3…..I’m not a mission to trash Jetstar. They are perfectly capable of doing so without my help.

Mike Phipps | Director | Mike Phipps Finance

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