The Prime Minister’s take on Virgin Australia’s dividend is a 100 per cent correct. The travelling public (half of them samoans) that travel to Samoa from Auckland and Sydney are getting completely ripped off.
Virgin Australia’s deal with Air New Zealand is completely against the spirit of the original 2004 deal the government made with Virgin - the whole point of the deal was for lower airfares for people travelling to Samoa. That is why the government did a deal with a budget airline like Virgin.
Yet all these years later, the airfares are sky high and a lot of that is because Air New Zealand have gone and done a deal with Virgin. This smacks of monopolistic behaviour on these routes. Air New Zealand want to keep airfares higher on the Samoa routes so they can go to war with Qantas on the trans-tasman routes. We all know the ridiculously low prices that Air NZ comes up with on the transtasman routes, all in a bid to undercut Qantas. What is happening is that the travellers to Samoa are subsidising the transtasman travellers.
Samoa needs to put a real competitor to Air New Zealand.
Virgin was supposed to be that, but they’ve sold out. So I reckon Samoa needs to get Qantas involved in the Samoa routes to really take it to Air New Zealand. Qantas are more interested in Fiji at the moment though. They have a big share in Fiji Air.