Qantas and Air New Zealand withdraw Trans Tasman code share applications
With both Qantas and Air New Zealand announcing the withdrawal of their application to code share on the Tasman, claiming current over capacity on the route, it is anticipated that Qantas at least will not take the ACCC’s draft rejection resulting in the withdrawal lying down.
Both carriers have told their respective Australian Competition and Consumer Commission and the New Zealand Ministry of Transport that they were withdrawing their application to form an alliance, as a result of the recent ACCC draft decision rejecting their proposal to co-ordinate routes, aircraft, schedules and fares, which could have resulted in the combined carriers dominance on the Tasman, controlling 80% of the market and claiming to save them over $A20m per annum.
While over capacity may well continue at least in the interim on the route, with Air New Zealand having warned that it would be forced to slash flights on the route if the deal did not go ahead, neither airline has announced any reduction in capacity.
It is anticipated though that Qantas will move to lower its costs on the route by the introduction of increased Jetstar services.
The Mole also reported earlier this week that Air New Zealand may explore a potential relationship with Virgin Blue, with an alliance with the Brisbane based carrier, bringing significant Australian feed networks to the Kiwi carrier with sponsorship of Virgin Blue’s potential entry into the Star Alliance also a possibility.
The ACCC said that draft decision was made because it considered that the airlines application would have resulted in their over dominance on the route, with few resulting benefits for travellers, also bringing about a fundamental change in competition on the Tasman.
Report by The Mole
John Alwyn-Jones
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