Trade Minister Todd McClay has urged Air New Zealand and Qatar Airways to settle their differences over a cancelled commercial agreement.

Qatar Airways chief executive Akbar al Baker yesterday blasted Air New Zealand for ending an airline agreement which he said could harm travel to and from this country.

Al Baker, who was in this country to mark Qatar's inaugural service, said Air New Zealand had pulled out of the partnership which makes it easier for airlines to put passengers on each other's planes by offering discount rates.

Al Baker called on this country's government, which owns 52 per cent of Air New Zealand, to act.


"I don't think the New Zealand government should stand and watch this - they should put pressure on their national carrier - they should not do anything that hurts the interests of New Zealand.''

McClay said that while the deal was a commercial matter for the airlines to discuss, he encouraged them to work together in the spirit of co-operation.

"Qatar Airways' new direct Auckland - Doha service was a vote of confidence in the New Zealand economy and will be beneficial to both trade and tourism," he said.

Qatar is a significant trading partner of New Zealand, with annual two-way trade exceeding $330 million. Auckland Airport estimates the daily Qatar service could be generate close to $200m in spending by visitors.

McClay was at Auckland Airport on Waitangi Day to welcome the flight, which has been recognised as the longest in the world.

"As a trading nation, New Zealand relies on effective air services to create much needed connections with the rest of the world,'' McClay said then.

Al Baker, one of the airline industry's most outspoken executives, let rip at Air New Zealand during a press conference yesterday, saying Qatar Airways caused nervousness in the markets where it started up. The home carrier's cancellation of the three year-old commercial deal was proof of this.

And he continued on the theme last night at a gala function at Auckland Museum attended by more than 200 guests who were entertained by dancers and singer Kimbra.

Al Baker said new cabin products that Qatar will reveal next month "will raise many eyebrows'' which he joked would get "Air New Zealand even more worried''.

During the press conference earlier in the day he said Air New Zealand was being pressured by Star Alliance partners to end the deal.

But Air New Zealand fired back saying it had a very limited agreement with Qatar which covered flights between Auckland and Wellington and Auckland and Christchurch only.

"Air New Zealand has a number of commercial arrangements with partner airlines and is under no obligation to offer preferred rates to competitors," a spokeswoman said.

Al Baker said he would try and mitigate the impact of the breakdown in the agreement by forming a stronger relationship with Jetstar.