Dunedin flights axed in fee fight

A row has erupted between independent airline Origin Pacific and Dunedin International Airport over ground-handling charges and debts.

Origin claims the airport's charges are disproportionate and cite that as its reason for quitting Dunedin.

The airport claims it has been threatening the withdrawal of services to force Origin to pay its bills.

The extent of the falling-out came to light just hours after the final Origin Pacific aircraft left Dunedin airport on Wednesday.

Mike Pero, a 25 per cent Origin shareholder, blamed the airline's departure from Dunedin on the airport company. Origin had "constantly negotiated" over the ground-handling charges, but the airport "wouldn't budge".

"The operating costs out of Dunedin ... are considerably more expensive than any other airport," said Pero. "If the cost was reasonable, we'd still be there."

But airport chief executive John McCall said he was "seriously concerned" about Origin's financial state and whether it would be paid.

In May last year, Origin just managed to stave off receivership or liquidation proceedings.

It owed more than $11 million, including more than $50,000 to Dunedin airport.

Its creditors agreed to write off 60 per cent of losses in return for payments on the balance over five years.

McCall claimed Origin had not met its arrangements covering the creditors' agreement.

He defended the ground-handling charges, saying Origin's schedules meant aircraft spent longer than other carriers on the ground, so the airport had to pay more to contracting staff.

- NZPA