S28 May 2002

The Government airline's decision to return to a coffee and dry biscuit culture must lead to more competition on domestic air routes, says National's Transport Spokesperson Belinda Vernon.

"Air NZ's plans to cut in-flight service in return for cheaper fares and better frequency creates the climate for competition, and travelling New Zealanders will be the beneficiaries if competition results.

"The last thing New Zealanders want is a return to the bad old days of a state- owned operator dominating domestic air services.

"Air NZ's move creates opportunities for those at both the top and the bottom end of the market. It's up to other air operators to grab the opportunity and give New Zealanders real choice. The lucrative business market will certainly be looking for it.

"The big question is whether the Government will allow a true no-frills operator like Virgin enter the market and provide real competition to the state-owned airline.

"Air NZ's move to a no frills service is good for travellers provided other operators give New Zealanders the choice to decide what sort of carrier they want.

"New Zealanders are used to competition and high levels of service on domestic routes. The last thing passengers want is to be in a captive market where there is no choice.

"Air NZ says it is responding to consumer demand. They better be right. The test will be if prices come down, frequency improves - and the customers buy Air NZ tickets," Belinda Vernon said.

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