Dunedin and air services

Dunedin has battled poor air services on and off for decades. But the level of business and community frustration about the perceived recent fall in service is reaching new peaks.

The opening of Dunedin International Airport's second air- bridge by former Labour cabinet minister Richard Prebble more than 20 years ago was hailed as a major step in bringing competition - and the promise of lower fares - to the city.

The impending arrival of another airline to the city was genuinely seen as the start of a major change for travellers from the South. However, airlines have since come and gone - some through bankruptcy and liquidation, and some just because they can leave and set up somewhere else with ease.

Commercial decisions are always difficult to make, but the fact some major business organisations are calling Dunedin's air services a ''flying shame'' is a call to action. Dunedin is being seen as a difficult city with which to do business.

The city council, Otago Chamber of Commerce, Otago Southland Employers Association and business leaders have for years feted Air New Zealand, which has kept faith with the city through times of competition. Privately, the airline has in the past told business leaders keeping regular flights between Auckland and Dunedin - a key route for those seeking to do business in the two cities - was totally dependent on passenger numbers.

As such, to many it beggars belief the direct flight about 7pm from Auckland was cancelled, given there never seemed to be many spare seats available on those flights. Now, Dunedin people are faced with either leaving for Auckland on the night before a meeting, and paying accommodation costs, or stopping over in Wellington, or having a four-hour window in which to arrive in Auckland, conduct a meeting, or meetings, before departing direct for Dunedin. Ridiculous.

Air NZ is one of the world's most profitable airlines, on basis of scale, and has for years provided good returns for its shareholders, with the Government still retaining a majority shareholding after selling down part of its stake in the asset-sale process. While recognising the need for profitability, given the billions of dollars the airline will soon spend on a new fleet, being called a national carrier comes with some responsibility.

Jetstar provides limited services between Auckland and Dunedin but its flights are not suited for business travellers on a tight timetable. Virgin has cut its direct flights between Dunedin and Sydney and Melbourne this summer, which means services to other centres, such as Christchurch, are now essential for those wanting to link by plane to overseas flights.

It should also be remembered Air NZ has increased its stake in Virgin Australia to 25.99%, the maximum allowed under that country's foreign investment rules. Air NZ formed a partnership with Virgin, providing links with its flights into Australia, after the failure of Ansett in 2001. Virgin's other major shareholders are Virgin Group and Singapore Airlines.

A call on Wednesday by Outram farmer and cafe owner Fred Doherty for the city to ditch major airlines and launch a local air service providing international flights has this week generated many emails, letters and phone calls to this newspaper, overwhelmingly in support. But there are, no doubt, problems with the proposal. After all, convincing 1000 people to donate $1000 each to fund the first stage of ''Otago Air'' is the easy part. Mr Doherty has tapped into the rising levels of frustration within this community. A suggestion a Dunedin-based flight could swoop into Invercargill, picking up passengers before flying to Australia, will also be popular.

But as the failures of airlines flying into Dunedin in the past has shown, this is a tough business. Larger, more established carriers have the ability to hurt smaller competitors. Air NZ was stung by the collapse of Ansett. Now, the airline has joined forces with Virgin and Singapore Airlines to take on Qantas in its home territory.

Mr Doherty's idea is one which has provoked much comment. It may well not fly, but at the very least it will hopefully produce some kind of action.

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