Air New Zealand confirmed to the Otago Daily Times it was behind the website, www.saverjet.com, a fictitious airline which charges customers to place feedback, has unavailable flights, and charges hidden fees.
The airline's marketing manager, Jules Lloyd, said the "tongue-in-cheek campaign" was designed to raise awareness of the hidden fees that low-cost carriers charge.
"We think this is a humorous and light-hearted way that would get people thinking about the real cost of a 'cheap' flight prior to the booking."
However, one budget carrier spokesman slammed the campaign, labelling it a waste of taxpayers' money and "a bit try-hard".
"It's definitely over the top and a bit rich coming from an airline that till recently operated the low-cost carrier Freedom Air. So in many ways the joke's on them," said Phil Boeyen, of Pacific Blue.
"It's surprising to see how much taxpayers' money they are spending on this."
Mr Boeyen said the airline appreciated the joke as much as anyone but it was clear Pacific Blue was "getting under their skin".
Jetstar Airways spokesman Simon Westaway said the airline was aware of the campaign and "found it funny" but questioned its relevance.
"Why would the major airline in New Zealand spend hard-earned revenue in times of economic difficulty . . . we question where their main focus is."
Air New Zealand declined to say how much they spent on the campaign, citing commercial sensitivity but said "it was created on a shoestring budget".
Asked whether it was appropriate for the national carrier to take potshots at other carriers on the competitive transtasman market given recent announcements over the suspension of flights from Dunedin and Hamilton, the airline said it was.
"Yes, we believe it is entirely appropriate. We are currently in a hearty battle on the Tasman with low-cost carriers and think it is important that consumers are informed that the price they see advertised may not be the fare they actually end up paying," Ms Lloyd said.
Only after watching the video on the website, which has had more than 13,000 hits since it debuted last week, is Air New Zealand's involvement in the campaign revealed.
