Qantas claims deal on the Tasman will keep fares low!
Qantas CFO Peter Gregg has claimed that Qantas’ codeshare with Air New Zealand is essential to keep airfares across the Tasman low, insisting the arrangement would not mean fare price hikes, adding that the number of empty seats on the Trans-Tasman route was “not sustainable”.
But aviation analyst Professor Tim Hazledine has warned that fares could rise up to 25% because the plan involves joint scheduling and pricing.
Mr Gregg said, “We believe and we’ve maintained that there is adequate competition on those routes, and if we take too much capacity out, I can bet you next week’s salary or next year’s salary that the opposition will step into that space,” he said. “That’s what happens in our industry. It’s a capacity-driven business.”
However, Prof Hazledine, an economics professor at Auckland University, said his work showed that monopoly situations produced higher fares than the demand created by fewer seats.
His survey of 1,000 flights showed routes without two big independent carriers had fares which were 15% higher. He said, basically it’s fairly simply: the more competition on the route, the lower the price.” “The airlines have successfully run a codeshare arrangement before without coordinating scheduling and prices”.
Mr Gregg said though that the previous codeshare deal had occurred when Qantas was a 25% stakeholder in Air NZ, which he described as “a completely different environment”.
Mr Gregg added, “The Tasman is one of the most liberal markets in the world”. “You have two countries that allow foreign carriers to come in and set up domestic airlines”. “There’s nowhere that I’m aware of anywhere in the world that allows that to occur and those carriers can then compete on the Tasman.”
The airlines are seeking approval from Australia’s competition watchdog, and from New Zealand’s Transport Minister to bypass the Commerce Commission, but they are also receiving little support from the travel industry, with the consensus that the codeshare will result in fares going up.
Report by The Mole
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
TAP Air Portugal to operate 29 flights due to strike on December 11
Qatar Airways offers flexible payment options for European travellers
Airlines suspend Madagascar services following unrest and army revolt
Strike action set to cause travel chaos at Brussels airports
Digital Travel Reporter of the Mirror totally seduced by HotelPlanner AI Travel Agent