PMR joins other centres unhappy with Air Fares to Provinces

Source : http://www.stuff.co.nz/manawatu-standard/news/3569321/Air-travellers-fed-up-with-costly-flights

Manawatu residents – forced to drive to Wellington to catch domestic flights or pay "a premium" to travel from Palmerston North – have had enough. It can cost twice as much to fly from Palmerston North to Auckland or Christchurch, compared with leaving from Wellington. And business and elected leaders are saying the situation is hurting Manawatu's economy. The Manawatu Chamber of Commerce has said the region is effectively subsidising a price war on the main airline routes, to the detriment of everyone. The Windturbine Company general manager Clint Dunstan is one of a number of businesspeople choosing, when possible, to bypass Palmerston North Airport to pick up cheaper flights on offer from Wellington. Mr Dunstan said he and a work colleague tried to book a return flight from Palmerston North to Auckland next week, which would have cost $469 each. Instead they drove to Wellington, flew from there, at a total cost of $360, including $50 petrol for the drive. He said Manawatu was "hamstrung" by a lack of competition to push flight prices down – Air New Zealand is the only airline offering passenger services out of Palmerston North International Airport. Chamber of Commerce Paul O'Brien said the prices being charged were impacting all of Manawatu and surrounding provinces. Palmerston North International Airport was easily accessible, but people were put off by the cost of flying, which businesses have labelled "ridiculous". "We noticed that we were being used to fund the price war that was going on between Air New Zealand and other airlines." Families, sporting groups and the elderly were all faced with the same hassle as businesses. The three-way price war between Air New Zealand, Pacific Blue and JetStar on the country's main routes between Auckland, Wellington, Christchurch and sometimes Queenstown ad seen one-way prices drop to as low $20. Prices on regional routes are significantly higher. Deputy mayor John Hornblow, who runs a leadership consultancy, said for business flights, time was important and the extra costs of flying from Palmerston North could not be avoided. Personal flights were different. "The fact that Air New Zealand charges a premium for regional [flights] I find disgusting. I think it's unjust to have a monopoly and abuse it." He said it cost more to fly from Palmerston to Queenstown to visit one set of grandchildren than it cost to fly from Wellington to Brisbane to visit the others. "That's the price of being in a provincial area." Ad Feedback One high school often driving the well worn highway to Wellington is Palmerston North Boys' High. Rector Tim O'Connor said the 1st XV rugby team, on its way to Australia, flew from Wellington as the fares to Auckland were half the price. The team did the same thing for its flights to play Auckland Grammar recently. It would be "crazy" not to take advantage of the cheaper flights out of Wellington, he said. The reputation of Palmerston North as an appropriate centre for conferences and similar events could suffer if travel costs were too high, local MP Iain Lees-Galloway said. "I think the cost of domestic flights in and out of Palmerston North is one of the biggest handbrakes on our economy," he said. "People look at the cost of flying here and are immediately put off." For personal travel, Mr Lees-Galloway was another looking at flights out of Wellington. Palmerston North Mayor Jono Naylor had heard stories of many people driving to the capital to catch domestic flights. Palmerston North International Airport chief executive Gary Goodman said Air New Zealand had had a monopoly on domestic flights from Manawatu since Origin Pacific folded in August 2006. Prior to that, Qantas New Zealand went bust in April 2001. "That's really the last time there was any substantial alternative available for domestic flights." Pacific Blue had shown an interest in expanding its domestic coverage last year, but had since gone quiet. All airports charge landing fees for inbound passenger flights. Mr Goodman said a typical landing charge for a flight from Auckland to Palmerston North would be between $210 and $267 – about $5.20 per passenger. Air New Zealand spokeswoman Tracy Mills said the company's fares were based on a number of factors including volume, demand and capacity. "Pricing on the main trunk domestic jet routes will generally be lower due to the much higher volume of seats making the operational cost per seat lower. "We continue to reduce the cost of travel from all of our domestic ports, including Palmerston North. "As part of the regional fare reductions announced in October 2009, fares between Palmerston North and its destinations were reduced." She said lead-in fares from Palmerston North to Auckland and Christchurch were reduced to $79, and Palmerston North to Wellington was reduced by 5 per cent. Ms Mills said information about passenger capacity and volumes in and out of Palmerston North was "commercially sensitive".

Palmerston North is the latest centre to get on this band wagon... See also:

http://3rdlevelnz.blogspot.com/2010/03/cook-strait-air-fares.html
http://3rdlevelnz.blogspot.com/2010/02/demand-for-westport-flights-drop.html

It is one thing to run a cut price model with 737s. The big question is how to run a cut price model on ATRs, Q300s and most difficult of all Beech 1900s???