Air New Zealand Defends Pricing Policy

Air New Zealand Defends Pricing Policy

Air New Zealand strongly rejects claims that the airline’s pricing policy has contributed to the financial challenges facing Origin Pacific.
The facts are:
Pricing
• The cost of an everyday standard fare on Air New Zealand is undercut by Origin on the routes where we compete. The simple reason is that Air New Zealand recently put up its fares by 10% to recognise the high cost of fuel.

• Air New Zealand’s domestic promotional fares and the recent Grab A Seat initiative, which allow customers to pick up cheap fares to our 26 destinations within New Zealand, involves both competitive and non-competitive routes. The Grab A Seat campaign is stimulating demand on all routes we fly, including those Origin fly.

New Routes
• Air New Zealand’s introduction of non-stop services Nelson-Hamilton and Nelson – Palmerston North is part of a considered expansion to better serve the market. Air New Zealand is carrying exactly the same number of people on these routes directly as previously we were carrying indirectly over Wellington.

• The Nelson to Hamilton and Palmerston North routes represent less than 10 percent of Origin capacity. Origin has carried more people on these routes this year than at the same time last year as the total market has grown due to our initiative.

Support for Origin Pacific
• Air New Zealand (as one of several creditors) supported a restructure plan to keep Origin operating in 2005. Air New Zealand forgave 60 percent of debt and deferred payment of another 40 percent of debt as part of this rescue package.

• Air New Zealand contacted Origin today to discuss what support could be provided to its passengers if any services were cancelled as a result of efforts to reposition the regional carrier.

ENDS

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