Air New Zealand is looking at its regional pricing structure after a ‘please explain’ meeting with Nelson MP Nick Smith that sought to calm commuters’ fears about airfare hikes.
And Nick says if action isn’t taken, a complaint to the Commerce Commission could be on the cards.
The meeting came on the back of the Waimea Weekly revealing that the airline had lifted its Nelson prices by upwards of 18 per cent year on year, after its competitor Jetstar pulled out of the region.
Nick took those complaints to top Air New Zealand bosses last week to advocate for fairer fares for the region. He is also asking for transparency in how the airline makes its pricing decisions.
“Nelson is an isolated region, geographically, and air services are crucial to our links with the rest of the country.”
He says many small and medium businesses that run out of the region provide nationwide services that can’t compete if they are paying excessively for flights.
“Our tourism sector also relies on competitive airfares.”
Nick says that he made the point about how important air links are to the Nelson and Tasman communities.
“Air New Zealand acknowledged that, with Jetstar’s withdraw, there has been an increase in demand which has increased the average price.”
He says more transparency is needed from airlines, especially from a company where the Government owns 52 per cent of shares.
“In many jurisdictions, like the United States and European Union, airlines are required to disclose average airfares by sector. I think the public has the right to know what the average fare is to know whether you’re getting price gouging.
“I think more transparency is required.”
Air New Zealand told Nick that the airline needed to take on board some of the criticism around prices. Nick is not ruling out lodging a complaint to the Commerce Commission if there are no changes.
“I want to give them a fair opportunity to respond to my concerns.”
I the meantime he is encouraging people to use the services provided by both OriginAir and Sounds Air to give the larger company some competition.
An Air New Zealand spokesperson said that the meeting with Nick was “productive”.
“We have taken on board Nick Smith’s comments.”
According to the data provided by Air New Zealand, seats on Nelson routes have increased by more than 130,000 in the last five years.
Over this period, the average fare on our Nelson services has fallen, while costs per seat have increased.
“Naturally there has been a huge demand for seats on our services post-Jetstar’s exit and we have seen flights fill up faster than usual. We expect this will start to balance out going forward.”