The New Zealand Herald

Rivals defend ‘frenemy’ deal

Airports claim the Air NZ-Qantas code-share agreement on domestic routes may have a bad impact, writes Grant Bradley

- Grant Bradley travelled to Sydney courtesy of Iata.

Acall to review the Air New Zealand-Qantas domestic code-share has met a mixed response on both sides of the Tasman.

Airports have called on regulators in both countries to review the deal to ensure it does not adversely affect Virgin Australia.

The Commerce Commission said yesterday that based on the “informatio­n available” about the code-share, it did not consider it raised issues under the Commerce Act that it intended to look at further.

However, a spokesman for the Australian Competitio­n and Consumer Commission said it did not comment “on potential investigat­ions”.

When they announced the deal, Qantas and Air New Zealand said it did not need regulatory approval, unlike other deeper relationsh­ips airlines frequently form.

The Australian Airports Associatio­n said the arrangemen­t could reduce competitio­n on both sides of the Tasman.

It has called on competitio­n regulators to ensure the new codeshare agreement between Qantas and Air New Zealand does not hit the travelling public and Virgin Australia.

Airports Associatio­n chief executive Caroline Wilkie said the arrangemen­t would lessen competitio­n on both sides of the Tasman and could constrain the important transtasma­n market and affect tourism.

Virgin Australia’s group executive, Rob Sharp, said he was surprised at the deal, which will start on October 28, the day his airline ends its deeper seven-year alliance with Air New Zealand. The Kiwi airline decided not to renew the arrangemen­t.

“This is not good for consumers in New Zealand. We’ll compete vigorously, we’re a challenger brand and, in due course, we’ll be announcing our product and fare structure,” he told the Herald on the sidelines of the Internatio­nal Air Transport Associatio­n (Iata) meeting in Sydney.

“In terms of the regulatory side, it’s a code-share arrangemen­t and they’ve put their view in the market but we’re obviously looking very closely at that.”

The code-share announced on Friday is for travel by Air New Zealand and Qantas within each other’s domestic networks and not across the Tasman where they say they will continue to compete hard.

The code-share will streamline ticketing and bag movement and give eligible passengers access to both airlines’ lounges.

Qantas Group chief executive Alan Joyce said it was ironic that “monopolist­ic” airports were criticisin­g the deal.

“These carriers are going to be very competitiv­e and nothing’s changed — I only wish airports could be as competitiv­e,” he said at Iata.

“As we said to Air New Zealand, we’re going to be ‘ frenemies’ on this one. We’re going to be very competitiv­e on the Tasman and domestic New Zealand and all the other routes that we compete on.”

There have been concerns that the code-share could mean more Qantas passengers will end up on Air New Zealand flights and Jetstar, which has struggled for profitabil­ity here, will find the going even tougher.

Jetstar group chief executive Gareth Evans said it was “110 per cent” committed to New Zealand.

Jetstar would carry the Qantas code if its flights were timed for around the same time as Air New Zealand services, providing incentive for passengers to stay with it.

Also, not a high proportion of passengers connected from transtasma­n Qantas flights.

Rather than pull back from New Zealand, Jetstar would consider expanding if there was sufficient demand and available aircraft, and Evans urged Kiwis to use the airline.

“We want to make sure the airports in New Zealand and consumers in New Zealand continue to support our work and that’s the best way for us to continue to grow that business.”

Joyce said the “best way of ensuring viability is for all the communitie­s to get behind and support them”.

 ??  ?? Qantas chief executive Alan Joyce and Air New Zealand’s Christophe­r Luxon announced a tie-up last week.
Qantas chief executive Alan Joyce and Air New Zealand’s Christophe­r Luxon announced a tie-up last week.

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