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Airport has second thoughts on SIA/Air NZ alliance

March 20, 2014 Aviation, Headline News No Comments Email Email

egtmedia59Some tricky questions on the proposed strategic alliance between Air New Zealand and Singapore Airlines have emerged from an unlikely quarter – Auckland Airport.

Auckland Airport is urging the New Zealand Government to consider closely the threat posed to competition on the Auckland-Singapore route by the proposed strategic alliance, the New Zealand Herald reports.

The airport’s stance is even more surprising because it would presumably benefit from the proposed alliance, and because it welcomed news of the proposal back in January this year.250x250

At that time, Glenn Wedlock, Auckland Airport’s general manager aeronautical commercial, said: “It is important to celebrate both the additional capacity from the A380 services and the capacity growth and improved connectivity this alliance would deliver if it receives regulatory approval.

“This decision is no doubt influenced by the strong performance of the South East Asian routes into Auckland which have seen high passenger loadings of more than 85%, on average, this past year.”

In its submission to New Zealand’s Ministry of Transport, the airport says it is still “generally supportive” of the proposal – but doubt seems to have crept in. The airlines’ assertion that the alliance will not affect the overall level of competition on the route needs to be tested, the airport now maintains. Jetstar is the only other airline that provides direct flights on the route.

“We consider this [testing] is necessary to ensure the minister is satisfied that the alliance will not have the effect of creating an uncompetitive environment on the route,” the airport’s submission adds.

Features of the proposed SIA and Air NZ alliance include the boosting of services between New Zealand and Singapore by almost a third as Singapore Airlines deploys an Airbus A380 on the route.

Auckland Airport said it welcomed the range of public benefits outlined in the application, the NZ Herald reported.

“Auckland Airport recognises airlines operate in the context of a global industry where numerous strategic alliances and alignments exist and are used to achieve reductions in operational costs.”

A pact between Air NZ and SIA would put the carriers in a stronger position to compete with the Qantas-Emirates alliance.

The Tourism Industry Association New Zealand (TIA) has no qualms about the proposal and supports it on the basis that it will:

  • Allow for a sustainable growth in capacity between New Zealand and Singapore leading to the stimulation of both inbound and outbound traffic
  • Deliver public benefits for customers;
  • Stimulate tourism to New Zealand due to the expansion of the Air New Zealand and Singapore Airlines network;
  • Promote competition on routes between New Zealand and Asia and to and from Europe. 

Written by : Peter Needham

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