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Government still in talks with Air NZ

NZ Newswire logoNZ Newswire 10/02/2017 Paul McBeth

Air NZ had been the sole supplier for domestic routes but has since faced increased competition from an expanded Jetstar offering and the introduction of several smaller regional airlines. © AAP / Angela Brkic Air NZ had been the sole supplier for domestic routes but has since faced increased competition from an expanded Jetstar offering and the introduction of several smaller regional airlines.  

The government is still negotiating with national carrier Air New Zealand in a cross-agency air travel contract that will add a number of new airlines to the list of approved flyers.

Former Economic Development Minister Steven Joyce asked for the contract to be retendered last year as heightened competition prompted a review of the benefits from all-of-government procurement, which had delivered $37 million in savings for the Crown.

The new contract comes into effect next month, and the airlines already on the list include Emirates, Etihad, LATAM, Lufthansa and Austrian and Swiss airlines, Qantas Airways for international routes and Jetstar on domestic, Singapore Airlines, Sounds Air, United Airlines and Virgin Australia.

"We are still in discussions with other air travel suppliers, including Air New Zealand, with a view to including them on the panel," a Ministry of Business, Innovation and Employment collaborative procurement spokesperson said in an emailed statement.

The contract is currently shared by national carrier Air NZ, Emirates, Lufthansa, Qantas and Singapore Airline.

Air NZ had been the sole supplier for domestic routes but has since faced increased competition from an expanded Jetstar offering and the introduction of several smaller regional airlines.

Jetstar group chief executive Jayne Hrdlicka said her airline provided up to 500 flights a week across 11 routes and nine destinations and its low-fare model made economic sense for the government.

"Government officials and employees will now be able to travel with Jetstar's low fares for domestic and regional flights," Ms Hrdlicka said.

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