Earlier: Yesterday it was reported that Air New Zealand would be slashing domestic airfares by up to 50 per cent as part of a strategy to stimulate its domestic market.
New Zealand First MP Shane Jones has welcomed news that Air New Zealand will be slashing prices, but warns it may not make a difference.
"There's no point having a very cheap fare at 11:30am or 13:30pm in the middle of the day and the fares continue to be horrendously large when most enterprises and people need to travel," Jones told the Herald today.
"It's no good having a cheap fare for Nana to visit the whānau whilst the day-to-day business [people] are choking with excessively high airfares."
Yesterday it was reported that Air New Zealand would be slashing some domestic airfares by up to 50 per cent as part of a strategy to stimulate its domestic market, especially the regional routes, since it announced a profit downgrade last month.
The airline is set to make the formal announcement soon and is currently teasing the coming news on its Facebook page.
Slashing their domestic fares will bring their prices in line with what Jetstar offers on some local routes.
Jetstar flies regularly flies to Christchurch, Dunedin, Napier, New Plymouth, Nelson, Palmerston North, Wellington and Queenstown, often a substantially lower fare compared to Air New Zealand.
Today, Jetstar's homepage is advertising a range of domestic flights for as low as $32 one-way.
Jones, the Regional Economic Development Minister and an advocate for the provinces and regional New Zealand, said Air New Zealand's move would boost productivity and enable businesses to flourish in the regions if the price drops are across all flight times.
"I want to be sure that it improves the productivity and the affordability of people who have to go in and out of the provinces very early in the morning and in the evening," he said.
Jones said the move to lower domestic fares was overdue - and the regions had been getting a rough deal for quite some time.
"Economic activity has diminished in New Zealand but if these fares do make it more efficient and add to productivity the this is what I've always expected from New Zealand's national airline."
He said it was Air New Zealand's duty to offer affordable airfares for Kiwis.
"Those duties are not just about whizzing people about in and out of Chicago, it is about far more tedious matters of enabling people to travel at an affordable level out into the provinces and regions."
Shane Jones is hopeful cheaper Air New Zealand domestic airfares will increase productivity in the regions. Photo / Northern Advocate
Jones has long been a critic of Air New Zealand, calling out the airline last year for ending regional flights.
Jones went on to call for executives to step down from their roles at the airline.
These strong words were subsequently described as "a step too far" by Prime Minister Jacinda Ardern.
Commenting in media today Ardern said the Government played not part in Air New Zealand's decision to cut regional prices.
Air NZ last month slashed its full-year earnings forecast.
It cut pre-tax earnings guidance to a range of $340-$400 million for the June year due to slower-than-expected revenue growth. The company's share price has slumped since the move and the stock is currently trading at $2.65.
The cut sent shockwaves throughout the tourism industry that its golden run was coming to an end.
The Herald has approached Air New Zealand for comment.
