New Zealand had three aviation companies in the 1920s, based in Auckland, Christchurch and Timaru, that wanted to provide passenger and mail services, according to Te Ara. But the small population, the often-poor economy and government reluctance kept them grounded as passenger services. Instead they gave joyrides to a clamoring public and by 1924 all folded.
In 1934, the leading supplier of coastal and international passenger shipping, The Union Steam Ship Company of New Zealand, put money into National Airways of New Zealand, which became Union Airways. The following year the government granted it a license to fly from Palmerston North in the North Island to Dunedin in the South Island--via Blenheim and Christchurch. The government also licensed Great Pacific Airways to fly a main trunk route from Auckland to Dunedin. Smaller regional airlines served smaller provincial towns.
Great Pacific Airways did not start up and Union Airways picked up the Auckland routes. As Te Ara notes. "the licensed monopoly of a single airline in the main trunk remained a distinctive feature of New Zealand's domestic air transport until the 1980s"--July 1987 to be exact and the arrival of the Australian airline onto the domestic scene.
Governments throughout the world took an interest in aviation in the 1930s, but New Zealand's first Labour Government of 1935 went farther than most. It decreed only one airline could profitably serve the main trunk and profits from it would subsidize secondary routes to the provincial towns. The National Airways Corporation (NAC) came into being under the New Zealand National Airways Act 1945 and started flying in 1947--using much of the Union Airways equipment, timetables and personnel. It struggled at first but did well from 1951 onward, until the forced merger with Air New Zealand in 1978.
Pan American Airways (Pan Am) began the first United States to New Zealand link with a San Francisco to Auckland flying-boat service in December 1937. A mid-air explosion suspended flights for three years, and then World War II, specifically after the Japanese attack on Pearl Harbor in 1941, ended them altogether.
The New Zealand, Australian and British governments formed Tasman Empire Airways Ltd (TEAL) in 1937, for a flying-boat service between Australia and New Zealand. In 1940, the first flight from Auckland to Sydney carried 10 passengers and took 10 hours. TEAL became Air New Zealand in 1965 and the company expanded with flights to London. Air New Zealand and NAC, both government-owned, merged in 1978. The 1984 Labour Government began privatizing Air New Zealand and completed the process in 1989.
In 1987, Australian domestic carrier Ansett took advantage of air industry privatization and brought direct competition to the main trunk routes. Ansett gained as much as 30 percent of the Air New Zealand domestic market and forced Air New Zealand to make service upgrades, like air-bridges, to compete. In the deregulated market of the 1990s Air New Zealand acquired all of Ansett Holdings. Australia's Qantas took over the Ansett operation from 2000 as Qantas New Zealand.
