For immediate release

Tuesday, 26 November 2002

Dunne calls on Air NZ to put its money where its mouth is

United Future New Zealand leader, Peter Dunne, today challenged Air New Zealand and Qantas to back their words with real action should the merger of the airlines go ahead.

"We have heard lots of words about air fares and freight rates remaining low and 'competitive' and we have also heard that the merger will result in many millions of dollars of savings from synergies and economies of scale," said Mr Dunne.

"What that means is that the airlines should be able to offer written guarantees to the travelling public and exporters that they will not use their virtual monopoly to hike air fares and freight rates unreasonably.

"Already we have heard whimpering from airline executives that they cannot do that because of fluctuations in the exchange rate and the price of oil. It is difficult to believe this is a real objection since, in the past, airlines have rushed to raise their charges when the dollar falls and oil rises, but they have been extraordinarily slow to lower their charges when the reverse applies.

"The chairman of Air New Zealand has raised the bogeyman of the taxpayer being forced to pump more money into the airline if this deal does not go ahead. This is just a variation on the old cry of 'There is no alternative'. There was an alternative with Singapore Airlines, but Qantas conspired to sabotage that deal, and we have no evidence that any real effort has been made by the airline to seek capital on the local or overseas markets."

Mr Dunne said it was difficult not to conclude that what we are seeing is the surreptitious takeover of Air New Zealand by Qantas and that the end result will be extremely bad for the New Zealand consumer.

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