Shareholder bags regional Air NZ fares

17:00, Sep 27 2013

Air New Zealand was forced to defend its regional airfare pricing to shareholders at its annual meeting in Auckland, even as it announced more regional routes are on a "watchlist".

An airline spokesperson said there were still some underperforming routes on the regional network, "which need to improve to have a future. In particular Auckland-Kaitaia, which is on a watchlist."

The airline would not specify any other routes on the watchlist.

At yesterday's AGM, shareholder Peter Hastings asked the company's chief executive, Christopher Luxon, to explain the regional cutbacks, particularly the scrapped Auckland-Masterton service.

Luxon said the higher regional airfares were a result of the aircraft used. "High prices are a perception out there. The reality is, the per seat cost is much higher in a 19-seater," he said.

Luxon also said the airline was the only one in world that serviced 100 per cent of its country's towns and cities with more than 20,000 residents.

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Despite the cutbacks, Luxon said regional customers were connected and well-served.

The airline was also attacked yesterday by New Zealand Airports Association chief executive Kevin Ward for hurting regional businesses. He claimed the airline was abusing its monopolistic position by cutting regional scheduling and increasing prices.

"Businesses in these centres and others need the vital connection to the main centres to stay viable. Already, we are seeing the provincial economies suffer," he said.

An airline spokesperson said that to further stimulate regional growth, the airline was this year offering more than two million seats around New Zealand for under $100.

" The addition of new, larger turbo-props into the fleet will facilitate growth in capacity through upgrading to ATRs on well-performing routes."

The airline said it anticipated growth from upgrading of B1900Ds to Q300s on such routes as Auckland-Blenheim, Auckland-Rotorua, and Auckland-Gisborne. Fairfax NZ

BusinessDay