Emirates will not last here, says Air NZ

Rob Fyfe

A lack of profit on local routes could mean Dubai-based Emirates is unlikely to be here for the long haul, says Air New Zealand chief Rob Fyfe.

Fyfe told an Auckland electorate meeting hosted by National Party finance spokesman John Key yesterday that his airline was competing not only against Emirates but the whole city state of Dubai.

"Vast amounts of cash" were being spent on Emirates' global branding campaign, which included the New Zealand America's Cup entry and the jerseys of international rugby referees.

Air NZ operated in one of the most deregulated aviation markets in the world and the Australian Government was expected to announce this month it would not allow Emirates or Singapore Airlines to fly between Australia and the United States.

While not government-owned, Qantas is protected from full competition on some routes. This has angered some, who say high airfares between North America and Australia damage tourism.

Fyfe said the primary rationale of the Australian Government was that such competition would be detrimental to Australia's national interest.

If blocked by Australian authorities, Emirates was likely to "end up flying more routes from New Zealand, because we are one of the few countries that are prepared to give them unconstrained access".

"My fear is that it won't be New Zealand that is being promoted on these services, but Dubai," said Fyfe.

"Rather than two weeks in New Zealand when you fly in from LA, it will be two hours at Auckland International airport, before continuing your journey to Asia or the Middle East."

Emirates had the financial muscle to be able to dump capacity and drop ticket prices "so low that they would reduce any accountants in the audience to tears".

While this meant short-term gain for the customers, eventually airlines would leave, unable to sustain such losses, Fyfe said.

* Emirates has yet to comment on Fyfe's claims.