Steve Hart: Merger plan is a plane shame

COMMENT

Our national carrier may become a part of Qantas. It's not a hostile takeover - both parties are happy about it.

Qantas wants to buy 22 1/2 per cent of Air New Zealand and it is rolling over like a puppy having its tummy rubbed. But how will the merger benefit the country, the New Zealand consumer or even visitors to our shores?

The airlines call it a strategic alliance. They really mean merger. If it goes ahead they will code share - you will book a flight with Air New Zealand, you may be put on a Qantas plane. You ask for one thing, you get another.

The merger shouldn't happen and the Commerce Commission, which works to ensure fair competition and to prevent monopolies, seems hard-pushed to see the benefit either.

Only this year the Government invested $800 million in Air New Zealand. Our Government, and that must mean us, now owns 82 per cent of the company. How can our investment be so quickly passed on to a rival?

And what about our options for air travel? Right now we're paying upwards of $500 for a return flight to Sydney - if Qantas and Air NZ get into bed, any hope of fares coming down will be slipped under the pillow. Together they have 85 per cent of the transtasman market from Auckland. The remaining 15 per cent is made up of about 12 airlines.

But it gets worse. Qantas and Air NZ are the only airlines flying Auckland to Los Angeles. It is here where we could be held to ransom. If you want to fly a direct route to LA there will be no real choice of carrier if the merger gets the nod. The only benefit, I'm told, is that Qantas has more comfortable first class sleeper seats than Air NZ.

Both parties insist that sharing aircraft, maintenance facilities and staff won't affect their desire to offer the best fares. I don't buy it.

Competition is the only element in business that drives standards up and brings prices down. Heartfelt promises won't prevent two companies with a common interest from maximising their chance of increased profits at our expense. Like it or not, they will have the monopoly on air travel to LA and a dominant position on the Sydney route.

If the regulators won't stop it, and our Government doesn't feel able to call a halt to the sale, then we must hope other airlines can step in to give us choice.

Competition in the sky above Europe has seen flight prices come tumbling down. Some of the airlines may not serve "free" food and drinks, but who cares? Most of us just want to go on holiday or get to a business meeting for the best price.

Because we live on an island we need to have access to affordable air travel - both domestic and international. We can't afford to be held back. And for the sake of inbound tourism, we need a flag carrier that has not been watered down - the airline is a part of our national branding as a holiday destination.

I do not see why Air New Zealand, an airline of international standard, can't stand on its own two feet, deliver good service at a price we can all afford, and turn a profit. It must have the potential for making a profit, or Qantas wouldn't want a quarter of our company.

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