Press release for immediate release: Wednesday, October 29, 2008

Air New Zealand Using Bully Tactics In The Pacific, Oxfam Says

Air New Zealand´s threat to cut a vital link to US markets for small Pacific Island nations if they refuse to pay steep increases in subsidies goes against the New Zealand Government´s commitment to support economic development in the Pacific, international development agency Oxfam says.

"It is incredible that Air New Zealand, a company three-quarters owned by the New Zealand Government, is threatening to cut vital services to our Pacific Island neighbours," Oxfam´s Executive Director Barry Coates says.

"This revelation calls into question the coherence of New Zealand policy. While a high proportion of the Government´s aid budget is focused on the Pacific region, our government-owned national airline is demanding millions of dollars from developing Pacific countries if they are to continue to trade internationally and entice tourists to their shores."

According to TVNZ, Air New Zealand has told the Samoan, Tongan and Cook Island Governments that the weekly links to Los Angeles from Auckland via Tonga and Apia, and another via Rarotonga, are now in question.

The weekly Los Angeles flight is crucial for Island nations´ trade and tourism. Cutting it will cost millions of dollars in revenue. Tuna exported to the US would have to instead travel via Auckland.

Air New Zealand reportedly told the Cook Islands Government their present subsidy of $2 million for its weekly Los Angeles flight needs to increase to $8 million if these stopovers are to continue.

At a recent election debate hosted by Oxfam, there was a commitment from all parties to focus New Zealand´s international aid on the Pacific, and a general consensus from party representatives that New Zealand should be doing all it can to help Pacific countries use trade to assist their economic development.

"At the same time that the New Zealand Government is encouraging its Pacific neighbours to grow their economies through tourism and trade, a New Zealand Government-owned company is undermining those efforts," Coates added.

"It is unacceptable for Air New Zealand to demand steep increases in payments from New Zealand´s Pacific neighbours at a time of economic turmoil and uncertainty."

ENDS

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