Top consumer group fears for Tasman routes
Apr. 03, 2006
Qantas and Air New Zealand are facing opposition from Australia's top consumer group over plans to code-share on flights across the Tasman, if the deal raises fares and reduces competition.
The Australian Consumers Association said it did not want a return to the days when a lack of competition meant fares to New Zealand were twice as high as they are today.
The airlines, which together control about 80 per cent of the trans-Tasman market, are understood to be close to finalising an agreement to share reservation codes. It would allow them to sell seats on each other's planes and could be formalised this month.
While it would not be as extensive as a merger proposed in 2003, the ACA warned yesterday it could still lead to fewer planes and higher fares, while making it harder for low-cost carrier Pacific Blue to compete.
ACA deputy chief executive Norm Crothers said the risk was that Qantas and Air NZ would create another monopoly. "If you go back 10 years or so, they had a cosy sort of deal where Qantas and Air New Zealand were charging $500 each way across the Tasman," he said.
"Now Pacific Blue was last week offering $149 one-way to Christchurch and others are regularly offering $200 to $249.
"It's half the fares we were paying 10 years ago." Mr Crothers said the ACA's response would depend on how extensive the code-sharing was.
It was not clear yesterday what regulatory hoops the new deal would have to go through.
New Zealand Transport Minister Michael Cullen confirmed last week code-sharing had been raised in talks but said the Government had yet to receive a final briefing.
A spokesman for Australian Transport Minister Warren Truss also said the Qantas-Air NZ proposal was a commercial matter and had not yet triggered any government involvement.