Wellington unlikely to be carved out of code-share agreement – report from TRENZ
Air New Zealand chief executive Rob Fyfe, speaking at the NZ Tourism Industry Association’s TRENZ conference in Christchurch, said that a lack of competition from other airlines was unlikely to result in Wellington being dealt with separately under the proposed code-share with Qantas.
The Australian Transport and Regional Services Department said last month, that Air New Zealand and Qantas could be forced to continue competing on trans-Tasman flights out of Wellington if an agreement to share flights was approved.
Opponents in Wellington, including local MPs, business groups and tourism operators, fear the move will result in less competition, fewer services and higher prices, with the deal giving the airlines a near-monopoly of routes between Wellington and Australia.
Mr Fyfe was also confident of the airlines’ chances of getting regulatory approval, saying Air New Zealand would not have started down the path if it did not think the code-share had a decent chance of being approved.
In April, Air New Zealand and Qantas announced they were looking at entering a code-share agreement in an attempt to cut costs.
Mr Fyfe said he had been travelling New Zealand talking to interested groups and most areas understood airlines could not continue to fly non-profitable routes and that he had spent a lot of time in Wellington talking to business and community leaders and Wellington International Airport, telling them what Air New Zealand did to promote the region.
He said, “We’re doing everything we can to pump tourism value into the region but we can’t keep flying empty aircraft.”
The agreement would reduce Wellington’s number of flights from 50 a week to 44, with nine flown by Air New Zealand and the rest by Qantas.
In the past, there had been a suggestion that Wellington could be separated out of the agreement because of a lack of competition from other airlines.
Yesterday, Mr Fyfe said this was unlikely because routes from Wellington were interlinked with other centres in Australia and New Zealand, which could then also claim special treatment.
Though not speaking specifically about Wellington, Mr Fyfe said that if the code-share did not go ahead, the only option would be to cut flights to save money, price rises were unlikely.
He expected the ACCC to make initial decisions late next month or in early August.
Report by The Mole
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