Lobbying lands fairer air deals

ANDREW GORRIE

REGIONAL INCENTIVES: Around 5300 Wellingtonians who regularly fly to regional airports could benefit from Air NZ's loyalty scheme.

Monopoly airfares to the regions will be slashed for frequent travellers prepared to pay up to $800 a year for a new Air New Zealand loyalty card.

Air New Zealand's monopoly on the provincial routes has meant fares to the main centres at short notice were often higher than a fare to Australia.

The airline has launched the Starfish card aimed at small and medium-sized businesses, allowing them to save 30 per cent on any regional air fare for an annual fee of $800. The cards are issued to individual travellers, not to companies.

A cheaper $200-a-year option offers a 15 per cent discount.

The discounts apply to even the cheapest fares and will continue to earn airpoints. Airpoints could also be used to buy fares using the cards.

Air New Zealand head of Australasia Bruce Parton said the airline was under pressure to reduce regional fares.

Travellers will need to spend at least $4000 a year to recoup the cost of a 30 per cent discount card, and $1400 for the 15 per cent card.

Hawke's Bay Chamber of Commerce chief executive Murray Douglas said the region had been lobbying Air New Zealand for about a year to give business travellers are fairer deal.

The regions did not get the benefit from the fare war that existed on the main trunk routes, where standard fares could be as cheap as $50, Mr Douglas said.

Senior airline executives received "a respectful earful from us" during a road show earlier this year, and they have listened, he said.

Business had been badgering Air New Zealand with proposals to make air travel more affordable, including an option to buy 30 tickets in advance for a set price, Mr Douglas said.

Some members felt they were buying the plane every time they bought a ticket at short notice, he said. Mr Parton said the scheme would "lock in the top 10 per cent" of customers who accounted for about a quarter of Air New Zealand's regional revenue.

A total 32,000 frequent fliers were expected to be better off using the cards, if they spent the same amount as last year, including 5300 Wellingtonians who travelled to the regions regularly.

While the initiative was expected to stimulate demand, the fare reduction could cost the airline up to $10m in revenue, he said.

House of Travel retail director Brent Thomas said the card would help stimulate demand for air travel, which had slowed during the recession.

"When you have flights out of Invercargill that are more expensive than a trans-Tasman flight that is a deterrent."

Mr Thomas said most frequent fliers would quickly recoup their $800 fee.

The Starfish cards go on sale at the end of next month, initially for a two-month trial.

All cards sold would be valid for a year.

Flights between the three main centres and to Queenstown were not included in the deal, unless they were part of an itinerary starting or ending at a regional airport.

- © Fairfax NZ News