Air NZ has 'obligation' to keep prices low after Jetstar bails on regions, Shane Jones says

Source: 1News

NZ First MP Shane Jones says Air New Zealand has "an obligation to look after Kiwis" and that he'd be disappointed if the company hiked up prices following Jetstar's announcement yesterday it plans to drop regional flights.

However, National Party deputy leader Paula Bennett jumped in to defend the national carrier, saying the company had done the right thing yesterday by committing to keeping prices low - at least temporarily - to accommodate affected passengers.

Up to 20,000 people have been affected after Jetstar announced a proposal to withdraw from regional flying in New Zealand at the end of November.

Air New Zealand offered discounted airfares to Jetstar customers. They would be able to purchase an Air New Zealand seat-only fare for the same route on the same day, schedule permitting, for up to $50 each way.

The routes affected are from Auckland to Nelson, Napier, New Plymouth and Palmerston North, and Wellington to Nelson.

"I'm disappointed that choice has been stripped out of those regions," Mr Jones told TVNZ1's Breakfast today, adding that "the Aussies" had "turned their back" on those areas.

"They've made their own commercial decision. My message to our national carrier [Air NZ] is that there's a lot of brand equity in their name, there's a lot of goodwill - do not use this as an opportunity to gauge the day-to-day travellers, the business travelers.

"I don't think they'll be surprised to hear me say this, but hey, I'm a retail politician and I've always stuck up for provincial New Zealand," he said.

But when asked by Breakfast host Hayley Holt if it would just be "capitalism at work" if the brand was to increase prices after competition dropped out, Mr Jones said capitalism also failed Air New Zealand in the past.

"You and I, or our parents, as taxpayers bailed them out when they were on the brink of insolvency," he said. "So we should never ever forget we are substantial owners of Air New Zealand.

"They have an obligation, in my view, to look after the Kiwis - not just down at the bottom of Queen Street, but throughout the provinces. I want Air New Zealand to look after our people."

But Ms Bennett jumped in saying, "to their credit Air New Zealand have said they'll keep prices low at least to the end of 2020 and that they would pick up those fares of Jetstar passengers that get let down."

She hoped they would keep prices down and run regular flights, but said it was an example of the impact of cost of living going up and the economy "tanking".

"People can't afford the kind of travel and it's the effect it has on somewhere like Jetstar so it really is a shame, not just for those in the regions."

Ms Bennett said competition is good, so yesterday's announcement would have an economical affect.

She took a stab at Mr Jones saying, "it really is a bit of a blow, and one that it's a shame that the economic development champion of the regions hasn't been able to keep that kind of competition there and see them thrive".