Mayor angered by Air New Zealand’s denial over planned cuts, but John Key says it's not all bad news

Prime Minister John Key says plans to scrap some regional flights around the country is generally good news, a point many of the affected communities dispute.

Air New Zealand announced yesterday it would close services from three towns -- Kaitaia, Whakatane and Westport -- and shut down subsidiary Eagle Airways as part of a revamp of its regional services.

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The airline would invest an additional $100 million in planes for more popular routes and would introduce a range of new regional fares which promised to cut the cost of travel by an average of 15 per cent.

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Mr Key, who is also the Tourism Minister, said overnight it was " a somewhat bitter sweet announcement", but overall it was good news.

He told reporters in Beijing that on the one hand there would be a lot of frustration for those in Whakatane, Kaitaia and Westport.

"On the other side of the coin, what Air New Zealand have announced is a significant fare reduction programme which is permanently enshrined.

"If you're taking a couple of regional sector flights, I think the maximum you can pay at any one time is $250 so that's good news.

"And they are going to fly bigger planes, which will be more capacity and the high likelihood they will have lower prices.

"So overall for the regions, it is a pretty good news story. But for those three particular areas I think they will be quite disappointed."

Mr Key said that while it would be disappointing news for three sectors, Air New Zealand was listening to concerns from the regions about high prices - "the likes of Kerikeri to Gisborne having to pay $800 for a fare."

Mr Key said he was briefed by Air New Zealand last week it was going to happen.

The decision has angered Whakatane mayor Tony Bonne, particularly after the council and the Government had jointly invested $180,000 on new airport lighting following the airline's request.

Mr Bonne said the national carrier had previously denied having any plans to cancel flights from the district.

"It is a blow to business, to us, our council. But our council has got the attitude when one door closes another door opens ... This was a well-oiled propaganda machine that has been working on this for the last 18 months without coming clean."

Sir Michael Cullen, who lives in Ohope, travels to Wellington several times a week for work.

He said he would now have to travel to Tauranga Airport to get a direct flight to Wellington.

"Without wanting to sound the least paranoid, Air New Zealand has been pricing the flights out of Whakatane at such a level that a number of people going to Wellington have already been driving over to Rotorua or Tauranga because the flights are much cheaper from there," Sir Michael said.

Blow to region

Kaitaia father-of-six Campbell Crooks, 54, flies to Auckland regularly for work.

As a member of JNL's Northland Mill management team, he used Eagle Air's Kaitaia regional service about once or twice every fortnight.

News the Far North service would be cut was disappointing, he said.

"It's just inconvenient. We have to travel to Kerikeri then."

The drive to Kerikeri took just over an hour, with a 40-minute flight to Auckland, Mr Crooks said.

While the extra travelling would mean less time with his family it was the potential damage to the Far North region which really concerned him.

"There has to be some balance in terms of maintaining some reasonable infrastructure in communities of this size."

The Crooks have lived in Kaitaia for about 13 years.