Submission Opposing Virgin Blue/Air NZ Alliance Proposal

NZ Airports is opposed to the authorisation of the proposed alliance.  It is the strong view of NZ Airports and its international airport members that the interests of the flying public on both sides of the Tasman are best promoted by encouraging competition and independent carriers, not by sanctioning anti-competitive arrangements such as the alliance.

In NZ Airports’ view, there are real and substantial benefits to the flying public from promoting greater competition in the trans-Tasman air passenger services market.  Where there is real competition on a trans-Tasman route, passengers have benefited from lower fares and more convenient services.  That competitive dynamic should continue.

It is the experience of our international airport members that increased competition in the trans-Tasman market leads to increased passenger numbers, lower fares and improved services.  In particular, the existence of an independent operator can be critical to the provision of competitively-priced trans-Tasman services.

The proposed alliance will inevitably reduce or eliminate that hard-won competition on the trans-Tasman services flying into and out of New Zealand’s airports.  Market power will enable price to be increased, demand will therefore decrease and capacity will reduce.  Without competitive choice, incumbents can route passengers through other ports, reducing the service levels offered to passengers.

The NZ Airports submission contains clear examples of the risks to passengers and the NZ economy.