John Key has moved to reassure concerned travellers about the cost of regional airfares in New Zealand.
Speaking during a visit to Tauranga yesterday, the Prime Minister revealed he had chewed the ear of the national carrier over high prices.
'Yes, I have had another chat with the CEO (Chris Luxton),” says the PM, 'and the point I tried to make is that while Air New Zealand has a monopoly on regional routes, it's very important they have competitive pricing”.
Air New Zealand's fares to regional destinations like Tauranga attracted fierce criticism after the airline announced a $262 million profit in August.
Mr Key says Air New Zealand has 'certainly got the message from us that they need to sharpen their pencil when it comes to regional tourism”.
He called Chris Luxton to account in August, but that did not impact on fares.
Air New Zealand claims its improved annual performance comes from turning around its international business. But profit from regional airfares are down two percent over the past five years.
Mr Key told SunLive that the challenge for Air New Zealand is that it's entitled, as a company, to make a fair return.
'But they need to do it in a way they can reduce their costs as much as possible and bring those fares down,” he added.
'They are very conscious of what we are telling them and I won't let the matter lie.”
7 comments
Appallingly high fares to Auckland
Posted on 17-10-2014 11:19 | By Annalist
Remember when Origin Pacific Airways existed? Funny how the Air NZ fares seemed more cheap when they had competition? I think we're being treated as suckers now. It also doesn't help that the government depts, are probably ok about high fares. They probably get airpoints???
I don't think that word means what you think it means
Posted on 17-10-2014 11:46 | By merry
How can you have competitive pricing when there is no competition? Such as in a monopoly...
Monoploy
Posted on 17-10-2014 14:55 | By Conzar
Stern talking to's do not work on Monopolies. No private industry should be ever allowed to have monopoly; but of course, the end goal for all capitalist companies is to have monopoly.
Time for a change
Posted on 17-10-2014 18:14 | By firemansam01
Maybe the government should alow other airlines to have a shot at the domestic market bring airnz into line
Silly PM
Posted on 17-10-2014 21:12 | By dgk
John Key obviously has no idea what "competitive" actually means.
What a crock!!!
Posted on 17-10-2014 21:40 | By s83cruiser
I flew to Christchurch in March from TGA the plane was full every seat taken. Return flight was the same every seat taken. Cost me over $200 each way. My friends daughter flew Auckland to Christchurch return for $94 each way so how does that work?? Air NZ is just raping the domestic market and the profit figure shows that to a Tee.
Pulling the wool...
Posted on 23-10-2014 16:20 | By penguin
What else would one expect from a monopolistic airline? Yes, there is some 'merit' in the argument comparing large capacity v. small capacity aircraft. But it is hard to accept this completely. Air NZ trumpeted the introduction of the ATR aircraft to Tauranga routes saying that these aircraft were far more fuel-efficient than the Dash 8's. So, why do we not see them in Tauranga (one flight per day?). While the el-cheapo fares may be attractive, the top-end fares are a total rip-off, taking advantage of some people who cannot book a long time in advance. I used to be proud of our national carrier but, alas, its reputation has been tarnished by greed.
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