Associate Minister of Transport James Meager told the NZ Herald that Air New Zealand has not approached him or anyone else in Government about ceasing operations on any regional routes. Meager made the comments after addressing the Aviation Industry Association (AIANZ) conference in Wellington.
Air New Zealand has reduced service frequencies on several routes this year following a spike in jet fuel prices linked to the Iran Israel US war. Meager said the airline had consistently assured him these changes were temporary measures to manage the ongoing fuel crisis. Air NZ posted a $242 million after tax loss in its last financial year, a result driven largely by high fuel costs, aviation system costs, elevated maintenance expenses and jet engine shortages.
Addressing concerns about Air NZ’s market power, with the airline holding an estimated 80 to 85% domestic market share, Meager said having Jetstar in the sector kept Air NZ focused on remaining the premium product. He noted that competition was more viable on major trunk routes such as Auckland, Wellington and Christchurch, but acknowledged the regional market was likely too small to sustain competing carriers.
Meager pointed to the expanded Air Chathams and Air NZ interlining agreement as a positive example of airlines collaborating while remaining competitive, suggesting such arrangements could help sustain routes that are difficult to operate profitably.
He also confirmed Air New Zealand has not requested subsidies for its regional network, despite acknowledging in its annual report that many regional routes remain unprofitable.