News: UK passengers penalised

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British travellers planning to fly around New Zealand are being penalised by the country's national airline for having the wrong credit cards. Air New Zealand has introduced very low "Smart Saver" domestic fares. But they are available only to people with credit cards issued in New Zealand.

Research by The Independent Traveller shows that New Zealanders typically pay two-thirds less than UK visitors for the same domestic journeys. With the right card, a typical five-flight circular itinerary covering Auckland, Napier, Wellington, Christchurch, Queenstown and Auckland would cost £150 when booked well in advance for off-peak travel through www.airnz.co.nz. Bought via the UK-based website, www.airnz.co.uk, the cost for identical flights is £508.

The airline offers a "South Pacific Air Pass" that would cover the sample journey for £157 - but only if you fly from the UK on Air New Zealand. Travel on any other airline and the price of the air pass more than doubles to £325.

A spokeswoman for Air New Zealand said: "We have completed a review of the domestic fares available on our UK website and will be adjusting them in line with the levels available on the New Zealand site."

Air New Zealand has also made drastic changes to its frequent-flyer programme, to which one in four of the nation's population belongs. At present, the Airpoints scheme is based on distance travelled; from 16 November it will be replaced by a programme that rewards passengers for the amount they spend. The change benefits frequent business travellers in Australasia, at the expense of those travelling on cheap long-haul tickets. The airline owes NZ$250m (£80m) in travel credits to its customers.

Also, from November, any member who fails to take an Air New Zealand flight within 12 months will have to pay the equivalent of £10 to remain in the frequent-flyer programme. In a separate move, the airline has announced a weekly link between Rarotonga and Christchurch, on the South Island, offering visitors the option of avoiding Auckland.

* Virgin Blue, Australia's leading no-frills airline, is to axe flights between the nation's capital, Canberra, and its largest city, Sydney, from today. Sir Richard Branson's company says passenger numbers have been "unsustainable", and blames a "slow take-up by many government agencies". Qantas, the national airline, has a 95 per cent market share of flights between the two cities. On its surviving routes, Virgin Blue has increased its fuel surcharge to A$10 (£4) per sector.