I find it rather funny that people believe that Air NZ should do nothing when someone else starts competing with them. At the end of the day they are a business and no business is happy when people spend their money with someone else doing the same thing.
The CEO and board will ultimately have to explain themselves to the shareholders if profitability goes up in smoke because someone else competes and the CEO and board do nothing about that.
And get over the whole Government Investment. Yes they bought 75% of the company some 14 years ago, this has now reduced to 52%. They have no responsibility to the NZ Government other than providing income to the Government in the form of both taxes and dividend payments.