More Blenheim Disquiet

In recent days there has been a bit of flak from Sounds Air about Jetstar's pricing tactics and how this is eroding their Nelson flights. Now Blenheim people are saying they want the same fares Jetstar and Air NZ are offering out of Nelson. The point forgotten is no one makes a profit on the super cheap fares. They are part of a wider strategy to get people flying and fill empty seats. In the end the airline has to make a profit to survive. When an air fare war is going on airlines will take a hit to keep market share. However, there is a unrealistic presumption that Air NZ, in particular, has to offer loss making fares all the time, everywhere over its domestic network. This is simply unrealistic. So what do you make out of this piece?

Marlborough residents feeling short-changed by the cost of air fares have vented their frustration at Air New Zealand. The national carrier was accused of charging exorbitant prices, with many at a fiery public meeting sharing stories of the 90-minute drive to Nelson in search of cheaper fares. But a representative for the airline said the pricing structure in Blenheim was no different to other parts of the country, and fares were cheaper than they had been. Air New Zealand phased out the use of its 19-seat Beechcraft 1900D aircraft last year, months before pulling direct flights between Blenheim and Christchurch. Air NZ head of government and industry affairs Duncan Small said phasing out the smaller aircraft meant residents should be seeing lower prices. "I can say that you are experiencing significantly lower fares now than you were when we were running into Marlborough with the 19-seater aircraft," he said. The remark drew a murmur of objection from the more than 70-strong crowd on Tuesday. "It's almost like we've offended Air New Zealand somehow and they're making us pay," one man said. Blenheim woman Helen Smale said she felt the airline was paying lip service to the regions, but had not stepped in to reinstate direct flights to Christchurch after the earthquake. "Our region was affected quite badly in the earthquake. New Zealanders all pull together when things get tough, and you're certainly not doing that for us," she said. Her husband Tony Smale claimed flights between Blenheim and Auckland were roughly two-and-a-half times more expensive than flying from Nelson, which was also serviced by Jetstar. "It looks to us like we are subsidising the competitive nature of that route, because the differences are astonishing," he said. "Auckland is really important for us and we are just getting bowled over by it. It's just ridiculous that we can take time and expense to drive to Nelson and it's still cheaper." Smale came to the meeting armed with print-offs comparing the price of a return flight to Auckland from Nelson and Marlborough airports, leaving August 9 and returning August 11. The cheapest fare leaving Marlborough was $139; coming back was $159. The cheapest fare leaving Nelson was $59; the same price as the returning flight. However, Small refuted the claim prices were two-and-a-half times more expensive, saying the amount of lower price fares was down to capacity, and there was more capacity between Nelson and Auckland. "Your fares are not differently structured or out of whack, and your loadings are not out of whack with anywhere else in the country," he said. He was also emphatic that Air New Zealand would not be reinstating direct flights to Christchurch, saying they did not want to create uncertainty for other operators by jumping in and out. Attendees also spoke of the impact of air fares. One man claimed an exporting business was considering relocating to Christchurch because of the cost of flights in and out of Marlborough. Another said high air fares meant tourists were more likely to bypass Marlborough. "I hear what the room is telling me," Small said towards the end of the meeting. "You haven't offended us, and I can promise you that we're not going anywhere out of this market. We fly more seats into Marlborough now than ever before."