Transport Ministry puts pressure on Emirates

Emirates has been asked to 'bear in mind' capacity and 'do more to focus on travel between New Zealand and the Middle East'.

Emirates' right to fly the Tasman is under a cloud - potentially undermining a key reason Air New Zealand and Qantas say a transtasman code share arrangement should not worry travellers.

The Dubai-based airline runs four flights daily across the Tasman - three from Auckland and one from Christchurch - and is the third largest player after Air NZ and Qantas.

The Air Services Agreement between New Zealand and the United Arab Emirates, which governs Emirates' right to fly here, is intended to cater to and foster traffic between this country and the Gulf.

But only a small percentage of the people carried by Emirates on its Tasman flights are en route to or from the Gulf. The agreement places no limits on capacity but one of its principles is that each country's national carrier should "not unduly affect" the interests of the other country's national carrier on services it already offers on part of the same route.

It also requires Emirates to charge "reasonable" fares and gives the Ministry of Transport the right to approve them, so long as it does not require a different fare from what Air NZ charges on the same route.

Acting Transport Secretary John Bradbury has told lawyers for Wellington International Airport - which is leading the opposition to Air NZ and Qantas' Tasman plans - that the ministry wrote to Emirates last year "encouraging" it to "bear in mind" the agreement's principles governing capacity and "do more to focus on travel between New Zealand and the Middle East".

Bradbury said it was a sensitive and ongoing matter.

The airport company says that while Air NZ paints Emirates as an unconstrained and formidable competitor, "Emirates cannot constrain Air New Zealand or Qantas on transtasman flights if it must have regard to Air New Zealand's interests and has the New Zealand Government actively enforcing those obligations".

It questions why the Australian Competition and Consumer Commission, which is considering the airlines' application to merge their Tasman operations, and other interested parties have not been informed of the terms of the air services agreement and the moves the Ministry of Transport has been making to ensure Emirates lives up to them.

Ministry and Air NZ officials were unavailable for comment yesterday but Emirates said it was business as usual.