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American-Qantas proposal faces New Zealand hurdle

August 11, 2015 Aviation, Headline News No Comments Email Email

egtmedia59While American Airlines and Qantas have gained interim approval from Australian regulators for their proposed expanded alliance on the Pacific, the airlines are still going through the process in New Zealand.

Submissions ended last week on an application to New Zealand’s Ministry of Transport by the two airlines. The two carriers say a more flights between Australia and the US – and the possibility of flying directly from New Zealand to the US – would spur competitors into a “strong and swift reaction”.

This would come from “particularly Air New Zealand, Virgin Australia/Delta Airlines and United who will fight to retain and gain passenger share”.http://www.centarahotelsresorts.com/b2b/index.asp#.UV7UU5OnqEs

American and Qantas contend this would bring New Zealand consumers keener fares and deals.

As the New Zealand Herald pointed out recently, Air New Zealand has had direct flights between New Zealand and the US to itself since Qantas pulled out of a loss-making Auckland-Los Angeles service in 2012.

Many Australian passengers fly the Tasman to join Air New Zealand services to the US from Auckland.

In the past financial year about 350 passengers a day flew across the Tasman for that reason, the NZ Herald says.

As the paper put it: “While the number of indirect flights between Auckland and the US mainland has grown it is widely acknowledged that every day without a direct competitor is a good day for Air New Zealand.”

In Australia, the Australian Competition and Consumer Commission (ACCC) has granted interim authorisation for the Qantas/American proposal, despite objections by Air New Zealand and Hawaiian Airlines.

“The ACCC considers that granting interim authorisation is likely to lead to additional capacity on the Sydney to Los Angeles route, and increased capacity and competition on the Sydney to San Francisco route,” ACCC Commissioner Dr Jill Walker said.

“This is likely to result in benefits to passengers that wish to use these services. Further, granting interim authorisation is unlikely to have any permanent impact on the market that could not be reversed in the event final authorisation is not granted.”

The Qantas-American case has now been placed before New Zealand’s Transport Ministry because of the potential impact on that market.

The ministry previously granted authorisation for similar arrangements in September 2011. Reauthorisation has been sought for an expanded joint business agreement, which has been redesigned to suit today’s market.

Written by Peter Needham

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