Origin staff face job losses, passengers in limbo

Origin Pacific has operated in regional centres since 1997. Picture / Mark Mitchell

Regional airline Origin Pacific last night suspended passenger operations, leaving most of its 260 staff without jobs and travellers uncertain whether their tickets will be honoured.

Airline staff and unions were given the news at a meeting in Nelson.

Managing director Robert Inglis told his workers that "the hoped-for capital injection had not been concluded in time to avoid suspending the passenger service".

The company's freight operation would continue to operate, he said.

"I am gutted I have to make this announcement. Any employer would be proud of what has been the most loyal, hardworking, professional group of people," Mr Inglis said.

Origin had been providing passenger services to centres including Auckland, Hamilton, Tauranga, New Plymouth, Wanganui, Palmerston North, Napier, Wellington, Blenheim, Nelson and Christchurch since 1997.

Several factors were behind the suspension of passenger services, Mr Inglis said, but he did not propose "to enter into recriminations".

The airline would do its best to provide staff with all that it could.

"Work and Income have been contacted and will be offered facilities at the airline's Nelson base to provide staff with guidance and advice."

The company said Air New Zealand would assist its stranded passengers, but the bigger airline last night rejected that claim as "premature".

Air New Zealand said Origin had yet to agree to arrangements for the carriage of its customers.

"Air New Zealand's current terms of trade with Origin are payment in advance," it said in a statement. "Once receiving confirmation of continuation of this arrangement, Air New Zealand will be in a position to reaccommodate Origin's customers on our services."

Air NZ chief financial officer Rob McDonald said it was sad to see Origin Pacific's passenger services suspended, particularly after Air NZ, and other creditors, forgave 60 per cent of its debt and deferred payment of the other 40 per cent as part of a rescue package in 2004.

"With fuel increases of around 80 per cent in the past two years and the demand for travel starting to soften, it was always going to be difficult for Origin to run a profitable passenger business," Mr McDonald said.

Engineering, Printing and Manufacturing Union national secretary Andrew Little said last night that the layoffs had been a shock for many employees.

"We will meet with Origin Pacific [today] to make sure the people who lost their jobs will get their final pay entitlements and redundancies ... and we need to find out if there will be issues with that."

Mr Little said it was difficult to know how long the company had been in financial trouble.

"We were told a few days ago to delay negotiations of renewal of the collective agreement," he said, "so it's been brewing."