Signs that Cathay Pacific will extend its NZ operations to Christchurch

Speculation is growing that Cathay Pacific will announce a seasonal service between Hong Kong and Christchurch.

The airline has a joint venture with Air New Zealand and flies from its Hong Kong base to Auckland but has been under pressure to extend its operations to the southern city from airports and tourism groups.

CAPA Centre for Aviation says the airlines backed away from Hong Kong to Christchurch flights following the approval of the alliance that dates back to 2012.

But Air New Zealand's joint venture with Cathay rival Singapore Airlines had resulted in the Singaporean carrier growing its presence in Christchurch.

''Cathay has been more frugal, and the New Zealand government determined that although the joint venture reduced competition, there was no prospective third competitor, so no harm done. But now that Hong Kong Airlines has entered Auckland, and then expanded, the Cathay-Air New Zealand joint venture faces disbanding,'' CAPA says.

Cathay today said it did not comment on media or market speculation while Christchurch Airport said it was continuing to talk to a number of airlines all over the world about flying to the city as the gateway to the South Island. The airport was unaware of any announcement.

A cabinet paper last year said the 2012 authorisation - which included Cathay taking over Air New Zealand's loss-making Hong Kong-London route - was finely balanced.

''However, it was determined at the time that the alliance was likely to be preferable to the alternative.''

The paper taken to cabinet by Transport Minister Simon Bridges recommending an extension to 2019 said as with any alliance, there was a risk that the applicants would take advantage of their market position by restricting supply or increasing fares.

''The Ministry of Transport also intends to write to the applicants, to set out their concerns and what they expect the alliance to deliver over the next three years.''