Singapore drops Air NZ service after price wrangle

A price wrangle has led to Singapore Airlines falling out with Star Alliance partner Air New Zealand over ground handling at Auckland and Christchurch airports.

Air NZ has the ground-handling contract for many airlines at Auckland, including some of its big rivals, such as Qantas. For the past 30 years it has done this job for Singapore Airlines.

But from August 9, Singapore Airlines- one of the biggest carriers to fly to New Zealand after Air NZ and Qantas - will use the rival Menzies group to service its planes and look after its passengers on the ground.

Singapore Airlines flies 12 times a week into Auckland and seven times a week to Christchurch. The value of its ground-handling contract with Air NZ is thought to be less than $10 million a year.

Airlines sign ground-handling contracts with companies such as Menzies and Air NZ so they do not have to employ their own staff at different airports.

The handlers are paid to turn the aircraft round, do cleaning and maintenance, check in customers and load cargo.

"Following a review of its ground-handling services, Air New Zealand Terminal Services advised Singapore Airlines of its decision to terminate their current agreement unless the rates were increased," the airline said.

Singapore Airlines general manager NZ, Sak-Hin Chin, said it would be business as usual for its passengers.

"We are working towards a seamless transition between Air New Zealand and Menzies Aviation on our ground-handling services.

"We are confident that Singapore Airlines travellers will continue to receive the same high-quality service the airline is known for."

He said Singapore Airlines had valued "the relationship and the excellent job Air New Zealand Terminal Services has performed".

An Air NZ spokesman said the airline had given Singapore 60 days' notice about the change. "Simply, the airlines were unable to reach agreement on price."