Scoop has an Ethical Paywall
Impact of Tasman alliance on Wellington
Wellington Airport concerned about impact of Tasman alliance on Wellington
Wellington Airport has submitted to the Australian Competition and Consumer Commission (ACCC) on the Air New Zealand / Virgin Tasman alliance outlining its concerns about the potential impacts on competition and the Wellington economy.
The information available in the airlines’ application suggests the alliance will be strongly negative for Wellington as it effectively seeks to remove the vigorous competition that has developed on the Tasman over the last few years.
“We are concerned about the potential competition affects of the alliance based on the lessons of the past, and the likely impact on tourism and the Wellington economy posed by a concentrated market,” said Wellington Airport CEO, Steven Fitzgerald.
Only three airlines operate scheduled trans-Tasman services from Wellington. If the Alliance was to proceed, the number of competitors on the Wellington-Sydney route would fall from three to two, and the Wellington-Brisbane route would have no competition. The potential for additional competition from “5th freedom” carriers is limited in the Wellington market
Historically, reduced competition on Wellington’s Tasman routes has led to airlines reducing capacity and increasing the lowest available fares.
“Whilst the alliance proposal states potential benefits for business travellers such as better connectivity, schedules and lounge access, reduced competition will most adversely affect the price-sensitive traveller.
“Affordable travel is critical to the wellington region’s economy, and a reduction in passengers on the Tasman would have a direct impact on the tourism industry, especially on inbound tourists who are very sensitive to price and are critical to Wellington’s economy,” added Mr Fitzgerald.
Wellington Airport is also concerned that the New Zealand regulatory approach is not set up to properly assess the alliance application against the impact of a loss of competition.
In Australia, the ACCC will go through a test which weighs competition and the net benefits claimed by the airlines. However, in New Zealand, the Civil Aviation Act exempts at least part of these arrangements from assessment under competition law – and does not have any net benefits test.
“That New Zealand operates differently than most other OECD countries in the area of competition law, by not performing a net benefits test, means the potential adverse impacts on the travelling public will not be properly scrutinised,” said Mr Fitzgerald.
Wellington
Airport’s submission to the ACCC can be viewed at
http://www.accc.gov.au/content/index.phtml/itemId/927433/fromItemId/278039/display/submission
ENDS
Wellington Airport
Wild at Heart
Wellington Airport provides a world class airport for visitors, the Wellington region and New Zealand. It's international terminal, The Rock, is ranked 4th best in the World. Being very close to the CBD saves 5.4 million travellers plenty of time and makes Wellington a more attractive place to visit. The Airport won the Wellington Gold Awards for Safety and is a major supporter of local events, attractions and community groups.
Gordon Campbell: On Why We Can’t Survive Two More Years Of This
NZ Government: Drive Safely This Summer
Northland Inc: Game-Changing Investment For Northland - Resilience Fund Allocates $250,000 To Health Simulation & Training Centre
Interchurch Bioethics Council: Church Bioethics Agencies Express Dismay at the Rushed Consultation Period for Submissions on the Gene Technology Bill
New Zealand Police: More Than $2.5m Worth Of Assets Restrained In Undeclared Tobacco Case
SPCA: Survey Shows Government Lacks Mandate To Repeal Live Export Ban
Peace Action Ōtautahi: Bridge Of Remembrance Peace Protest
