Competition would help hack fares by up to 30 per cent, increase air traffic by 30-40 per cent, and help the Bay economy by as much as $50 million a year, he suggested: "It would do much more for Hawke's Bay than amalgamation would ever do."
Napier Mayor Bill Dalton said that in previous discussions with Jetstar, the major issue seemed to be its access to turbo-prop aircraft suitable for regional routes. These aircraft are now available and Mr Dalton hopes Napier will be added to Jetstar's destinations.
Hastings Mayor Lawrence Yule said he had written to the region's other mayors and to the Hawke's Bay Airport board saying the Bay must work together to do all it could to ensure the region attracted the new service.
"Air New Zealand run a great service but, in the region, we can never know whether we're paying realistic fares or not without a competitor entering the market."
Mr Yule said Jetstar had the finances to survive a competitive price war "which is what hasn't happened before" in the region.
Responding almost before the announcement was completed in Auckland, broadcaster Bill Ralston, who has a home at Ocean Beach, east of Hastings, tweeted: "Well done Jetstar! Janet & I have just spent nearly $900 booking a return flight to Napier with @airnz. Hopefully it'll be a lot cheaper soon."
Amalgamation lobby group A Better Hawke's Bay said the five Bay councils must work together to ensure the service was secured.
"Jetstar executives are considering Hawke's Bay and will be coming here to meet with airport, local government and tourism officials. We don't have a single mayor or council for Hawke's Bay and we will need to rely on our councils trying to find common ground to make sure Jetstar is confident to invest in coming here," the group's chairman, Rebecca Turner, said.
Tukituki MP Craig Foss said it was "excellent news". It would "also create jobs and make it easier for our exporters to do business," he said.
Hawke's Bay Chamber of Commerce chief executive officer Wayne Walford said the proposal was a sign of "very positive" growth. "They wouldn't come here if there was no opportunity," he said. "It shows things are changing in the region and that we are making a difference. Jetstar will be looking at prospering regions and wouldn't invest otherwise."
Jetstar, established by Qantas in Australia 12 years ago, promises low fares and competition with Air New Zealand which, this year announced a revamp of regional services, including cutting three of its smaller destinations.
Jetstar's announcement was made by Qantas chief executive Alan Joyce, who was accompanied by Prime Minister John Key. The airline said its new flights - due to start in December - would bring "low fares competition to monopoly domestic routes around the country".
Jetstar managers will visit in the next two months to meet airport, local government, business, travel and tourism representatives to determine the first regional destinations.
About Jetstar
•Jetstar was established by Qantas in 2003 to operate domestic services, following the arrival of Virgin Blue.
•Transtasman flights were launched in 2005 and Jetstar introduced domestic services in New Zealand six years ago.
•The company employs about 400 staff in New Zealand including pilots, cabin crew, engineers and ground crew. Its air crew are based in Auckland and Christchurch.
•Nine Airbus A320 aircraft operate up to 240 domestic and 100 international flights a week, through Auckland, Wellington, Christchurch, Dunedin and Queenstown.
•Jetstar will use five 50-seat Bombardier Q300 turbo-prop aircraft on regional routes.
