Richard Thomson’s comments come amid a wave of discontent being expressed in the South about the national carrier’s charging system, which many believe is inequitable.
"We’re very sympathetic to the fact that consumers who themselves find themselves in a disposable income crunch are also having to pay more for airfares.
"But there’s equally ... no point in us pricing airfares at less than the cost of delivering the service."
At least two Dunedin sports organisations told the Otago Daily Times that costly fares could spell the end of national tournaments for the South.
Dunedin Netball general manager Lee-Anne Anderson was particularly disappointed with Air New Zealand’s approach.
"We were lucky to host the Netball New Zealand open champs in 2023 and under-18 champs last year.
"But with a rotation cycle of tournament allocation and the significant increase in cost of travel to and from Dunedin, we are concerned this will reduce, if not eliminate, the chance of hosting national tournaments at the Edgar Centre again."
Basketball Otago general manager Jodi Brown shared the netball community’s concerns.
Players, coaches and supporters were "constantly burdened" by the high cost of travel to attend national sporting tournaments, she said.
"National sporting bodies are often reluctant to allocate major tournaments to Dunedin. One of the biggest reasons for this is the high travel costs involved for visiting teams.
"As a result, our region is unfairly overlooked and our local athletes are repeatedly the ones paying the price — both literally and figuratively."
Mr Thomson said he could not comment on specific examples.
"We do have commercial agreements in place with a lot of large sporting teams or sporting teams across the country, and that’s knowing the vagaries of whether you’re getting into semifinals or finals or where you might be playing ... So we’ll be as flexible as we can to accommodate the vagaries of all that.
"But the costs of air travel are going up."
It had seen as much cost price inflation in the past three years as it would normally see over a decade, Mr Thomson said.
"We are motivated to deliver the very best service that we can, at the best price we can that covers the cost of delivering the service in question."
Asked whether having more competitors enter the market would force Air New Zealand to drop its prices, Mr Thomson said it was "not as simple as that".
"We’re a complicated island nation with complicated geography about the size of Japan, but we’ve got a population of 5.3million people, which is basically the population of Sydney.
"We’re trying to connect everybody, and we work our damnedest to do this."
The international market had also affected the high increase, factors including labour costs, airport levies and passenger levies across the network, he said.
"We are very hopeful and optimistic that price increases will start to moderate as we move into a less inflationary environment than we’ve had.
"We’ll keep doing our very best to keep people connected at the lowest price we can offer."
The issue has caught the attention of the government.
Acting Transport Minister James Meager acknowledged as an isolated, sparsely populated island nation, air travel was particularly important.
"Ultimately, pricing will come down to how much competition there is in the airline market, and the increased costs airlines are facing as they continue to recover from the damage caused by Covid-19.
"What government can do is make sure airlines are competitive, regulations and costs are limited and necessary for safety of passengers and that we support infrastructure investment in airports and airfields to make it easier for airlines to operate."
