Air New Zealand has confirmed it is not underwriting transtasman flights from Rotorua despite comments to the contrary from chief executive Rob Fyfe.
In an email sent a Dunedin customer earlier this month, Mr Fyfe said the Rotorua community had made a financial contribution to ensure the success of its new Rotorua to Sydney service.
"If the Dunedin community wanted to have a similar discussion with us about underwriting the cost of any losses Air New Zealand would make operating a year-round service, we would be happy to have that discussion."
Last week, Air New Zealand's Tasman Pacific general manager Glen Sowry told the Daily Post in Rotorua it was common for a financial package to be put in place when airlines started new routes.
There was no underwriting in place for the Rotorua service, but "incentives" were offered.
Mr Sowry declined to elaborate on those incentives, citing commercial sensitivity.
Seeking clarification whether the Rotorua flights had been offered "incentives", as per Mr Sowry's comments, or the "underwriting the cost of any losses", as per Mr Fyfe's comments, a spokesman confirmed no underwrites were in place.
In regards to Mr Fyfe's comments on "underwriting", the ODT was referred to his comments in the original email.
"In the case of Rotorua, the local community has been prepared to work with us and make a financial contribution to the service to help ensure its success, on the basis of the benefits to the region from a direct transtasman service," Mr Fyfe said.
Questions whether the airline had been offered incentives to fly into Dunedin, how much it would cost to underwrite flights to the city and whether the airline had indicated to the Dunedin community it should underwrite flights, were declined - with the airline citing commercial sensitivity.
Air New Zealand short haul airlines group general manager Bruce Parton in a letter sent to the ODT last week said the airline was committed to the Otago region and will increase services when demand improves.
"We are not seeing that increase in demand at present."
Fewer people were travelling due to the current economic climate, and capacity across the network had been reduced by 10%, he said.
"Dunedin already has transtasman services which are sustainable on a seasonal basis, but to increase again to year-round in the current environment would require a sharing of the financial risk if they were to continue and be operated at a loss."
