A row between Virgin Australia and Samoa over flights from New Zealand has deepened with the island nation's government saying its economy could have been damaged by a "multinational airline".
At the weekend Virgin was told its application to fly five times a week between Apia and Auckland from the middle of next month had been declined.
The airline has said the knock-back came out of the blue but a statement from the Samoan government said the decision should have come as no surprise as a 12-year joint venture deal between them had ended earlier in the year.
Samoa is setting up its own airline to fly to New Zealand with support from Fiji Airways. The six-times a week service is due to start at the time Virgin Australia hoped to start its service.
Thousands of passengers have been caught up in the dispute and will have to rebook on other carriers or seek refunds from Virgin.
Samoan Prime Minister Tuilaepa Lupesoliai Sailele Malielegaoi said its one-aircraft airline was a ''humble'' start in response to Virgin earlier this year indicating it no longer wanted to stay in the Pacific.
"We are an island nation attempting to re-start jet services - we are being treated in this manner by a multinational company in response. We therefore have no choice but to stand against any efforts to destroy that goal for our people."
A government statement said it stood by the decision to decline the approval for Auckland to Apia Virgin flights.
"It was made clear to Virgin that they are free under the license terms to fly direct from Australia to Samoa and return but Auckland is no longer accessible."
Past code sharing with airlines such as Qantas and Polynesian Airlines had facilitated co-operation ''not allowed for rippling economic damage to Samoa in favour of a multinational airline.''
Both Samoa Airways and Fiji Airways would help all passengers currently booked on Auckland to Apia, Virgin flights
The prime minister would also contact the New Zealand government and the Air New Zealand management, to establish if they are able to help with taking on Virgin's Auckland to Apia passengers.
Virgin Australia says it was contacting up to 6000 passengers and would re-route them through the Australian flights that had been allowed or refund them.
Travel agents are working with thousands of customers affected.
They say it is disappointing the option of flying with Virgin from Auckland to Apia had gone and warn prices may go up.
Flight Centre has about 1000 customers affected and Sean Berenson, its NZ general manager product, said Kiwis had a love of Samoa "so it is disappointing from a customer choice perspective that for the meantime direct accessibility from Auckland will be impacted".
It was positive though that the Samoan government has announced Samoa Airways would be picking up this capacity.
Flight Centre was working with customers on alternative travel options including
rerouting via Australia, or organising refunds.
''We have seen continued growth year on year in travel to Samoa, this indicates a very healthy market and a destination our customers love travelling to. We hope to be able to offer plenty of choice for travel up there again soon," Berenson said.
Brent Thomas, House of Travel's commercial director, said the outcome was unfortunate.
"This will reduce competition in the market with limited capacity and may impact pricing to Samoa," he said.
It was common practice for airlines to sell seats without prior approval and before the schedule commenced.
This will reduce competition in the market with limited capacity and may impact pricing to Samoa.
"It is unlucky that on this occasion the new route was not granted."
Processes were in place to support travellers through these amendments and those passengers who wanted to still travel to Apia on Virgin Australia can do so via Brisbane and Sydney services which have been approved.
"This is one of the benefits of collaborating with a travel agent, that you have their expertise and connections to help smoothly rectify alterations during a stressful time."
Virgin's twice-weekly return services from Sydney to Apia and weekly return service from Brisbane will go ahead as planned from November 13.
Virgin Australia had a joint venture deal with the Samoan government for a decade but this ended earlier this year.
The airline has asked the Australian government work to with its Samoan counterpart to reconsider the decision to block flights between Samoa's capital and Auckland.
It is understood any resolution to the impasse could take some time and the airline hasn't reallocated the aircraft deployed to the route because of the appeal.