23 April 2004

Origin cuts back after Labour meddles

Cutbacks in air services and staff by Nelson-based Origin Pacific are the result of Government meddling in the aviation industry and will hit provincial New Zealand hard, says Nelson MP Nick Smith.

Origin announced today that it would be making cutbacks.

"These cutbacks can be directly linked to Qantas switching its code share agreement from Origin Pacific to Air New Zealand on April 1 as part of that anti-competitive alliance," Dr Smith says.

"This relates back to the Government's decision to derail the Singapore Airlines-Air NZ deal in 2000. The billion-dollar taxpayer bail-out of Air NZ, and the Government's encouragement of an Air NZ-Qantas alliance, have forced these cuts.

"The way this Government has treated Origin Pacific is disgraceful.

"Air NZ tried to drive Origin out of business by predatory pricing on provincial services, but when Air NZ went broke it was bailed out by the Government.

"Now, the Government is encouraging an anti-competitive alliance between Air NZ and Qantas that could drive Origin out of the skies.

"Origin Pacific is absolutely critical to keeping airfares to provincial New Zealand affordable. A return flight from Wellington to Gisborne is $500 because there is no competition. Where Origin competes, fares are much lower. I fear for the impact on fares in regions which don't have a choice of airlines.

"The needs of the public and independent airlines like Origin have been forgotten by this Government with its interest as the major shareholder in Air NZ. It has also overlooked the economic importance of provincial tourism.

"The Government must change tack or we will end up with a monopoly state-owned airline like in the 1980s when the travelling public and tourism industry were very poorly served," Dr Smith says.

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