Air alliance brings tourism temptation

By CHRIS DANIELS

A world of tourist promotion currently closed off to Air New Zealand will soon open if the airline joins forces with Qantas, says a senior Australian tourism executive.

A Commerce Commission conference investigating Qantas' plan to buy 22.5 per cent of Air New Zealand heard yesterday that a fully owned subsidiary of the Australian airline was currently banned from selling package holidays that used Air NZ.

Simon Bernardi, chief operating officer for Qantas Holidays, said that if the alliance was allowed to go ahead, the company could start pushing New Zealand package deals through its global network.

That meant an additional 50,000 tourists coming to this country.



Princeton economists Robert Willig and Margaret Guerin-Calvert later provided economic arguments in favour of the alliance.

They said that existing competition (for instance, from airlines such as Emirates, Singapore Airlines, Garuda) and the imminent arrival of Virgin Blue would protect consumers from any anti-competitive tactics.

The extra "connectivity" gained by the two airlines' merging their schedules would bring benefits of between $21 million and $33 million, said Willig. The commission, which in April issued a draft rejection of the airlines' alliance plan, is hearing submissions on the Qantas-Air NZ alliance proposal for the rest of this week.

It is due to make a final decision by the end of next month. Submissions from Virgin Blue and alliance opponent Infratil, which owns 66 per cent of Wellington Airport, are due to be heard today.

Behind the scenes of the commission conference, a dispute has been simmering between Air NZ and Virgin Blue over access to facilities at Auckland Airport. Air NZ sent a letter to Virgin Blue last week saying it could make check-in counters available for it to run a domestic, main trunk service from Auckland.

Virgin responded by asking for Air NZ or Qantas to surrender their "first rights of use" over domestic gates, so it could use them while new terminal facilities were built for it.

Yesterday afternoon a letter from Auckland International Airport chief executive Don Huse was tabled at the conference. Huse said that the airport could provide domestic capacity for any new entrant on usual commercial terms. With enough notice, extra capacity could also be built.