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Air New Zealand backs Qantas
Air New Zealand Chief executive Rob Fyfe has rejected claims trans-Tasman air fares would rise if the deal with Qantas went ahead, adding that if its code-sharing proposal with Qantas is rejected it may be forced to cut flights to Australia
Air New Zealand and Qantas have proposed selling seats on each other’s flights between the two countries after a more comprehensive tie-up was rejected by competition bodies.
Fyfe said he expected the Australian Competition and Consumer Commission (ACCC) to release a draft finding on the code-sharing deal by July or August and that New Zealand’s Transport Ministry would rule at the end of the year, after the ACCC made its final determination.
Fyfe added, “We believe that code sharing is the best way to address the losses we’ve been making in that market and I can assure you we’re not going to keep losing money on those routes indefinitely.”
Without naming destinations, he said Air New Zealand would consider culling underperforming international routes if they didn’t pay their way. He said, “You’ve got to make sure you get the loads in your aircraft, you’ve got the yield or you have to take a really hard look and that’s what we’re doing.”
“Without code sharing, capacity would have to be reduced across Tasman, citing Qantas last week cutting one of its daily Auckland-Sydney flights.” Adding, “It’s very unlikely that we’d stop flying any (Tasman) routes although there are some routes that are marginal.”
Regarding prices rising as a result, Fyfe said that competition from other airlines would stop fares from rising under a Qantas-Air New Zealand deal, adding, “Our reality is that that won’t happen, because in any market where airlines are flying around with empty seats, the minute you put your prices up then the passengers just go across to that airline that’s still pricing to fill their aircraft up.”
Fyfe said Air New Zealand was more than hopeful of approval for the Qantas deal, saying, “We wouldn’t have embarked on this path, because it takes a lot of resources to plan something like this, if we didn’t believe we had a decent chance of success.”
Report by The Mole
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