Joyce slams Taxpayers' Union call for ministers to fly Jetstar

Steven Joyce has has slammed a claim that cabinet ministers are "too posh" to fly Jetstar.

On Wednesday, the Taxpayers' Union released Internal Affairs figures that showed cabinet ministers were racking up miles on the generally more expensive Air New Zealand.

Duty minister Sam Lotu-Iiga added credence to the TU report by refusing NBR's invitation to comment.

But this morning Mr Joyce returned fire.

The short story: the Crown has an All-of-Government contract with Air New Zealand. The contract includes discounts, but only if government ministers, their staff and staff of other government agencies book most of their travel with the airline and reach a minimum spending threshold.

Jetstar, which only recently expanded to regional routes did not tender to become part of the supplier panel for the current all-of-government contract, but the contract is up for renewal and the Australian-owned airline is expected to participate in the new tender.

The current AoG panel consists of Air New Zealand for domestic flights, and Air New Zealand, Qantas (Jetstar's parent), Singapore Airlines, Emirates and Lufthansa for international routes.

"The government has an all-of-government contract which includes five airlines. As part of this contract agencies receive significant discounts on domestic air travel. So far these savings total $28.2 million," Mr Joyce says.

"Individual agencies within the AoG contract need to have 92% of their travel with Air New Zealand to receive the discount from the contract . However, across all the agencies party to the contract 98% of all domestic travel needs to be on Air NZ. This includes Ministers and their staff, whose travel is covered by the Department of Internal Affairs who fund Ministerial Services.

"Individual agencies spending more than $600,000 with Air NZ receive higher discounts at 97% and 98%. Individual agencies are able to opt out of the AoG contract but don’t receive the discount from Air NZ. It’s important to note that Jetstar chose not to participate last time the tender came up. The tender comes up again this year and MBIE are having discussions with Jetstar and other airlines about how they might be involved."