KEY POINTS:
Air New Zealand has questioned why it can't co-operate with Air Canada on flights to Vancouver when Qantas can work with South African Airways on the highly uncompetitive Johannesburg route.
And it says Qantas has a codeshare with Japan Airlines, which is its only competitor for direct services to Japan.
This was one of Air NZ's arguments as it called on the Australian Competition and Consumer Commission (ACCC) to be consistent.
In a preliminary decision last Thursday the ACCC blocked a proposed co-operation deal between the two airlines on flights from Auckland and Sydney to Canada. The ACCC said it was concerned the agreement could reduce competition for flights between Australia and Canada.
"Air New Zealand and Air Canada are two of the four main carriers on the route," ACCC chairman Graeme Samuel said.
The agreement involves the two airlines jointly promoting and selling direct flights between Sydney and Vancouver (operated by Air Canada) and Auckland and Vancouver (operated by Air NZ).
It also allows the airlines to share revenue on the flights.
Ed Sims, Air NZ's group general manager international airline, said the carrier was extremely surprised at the ACCC's preliminary decision and would make submissions to change it.
As the ACCC noted, there were already four main carriers on the route, he said. Wherever there were two or more carriers, competition was intense and consumers benefited. Mr Sims said Air NZ was also concerned by the ACCC's view that the agreement was not needed to underpin the direct services, or to ensure the ongoing provision of direct services.
"The ACCC would seem to be ignoring the reality of the global economic meltdown and the fact that this year more than two dozen airlines around the globe have collapsed while those remaining take the knife to their businesses, including axing non-profitable and marginal services," he said.
On November 2 last year, Air NZ started direct flights three times a week from Auckland to Vancouver using a Boeing 777 aircraft configured to carry 313 passengers.
On December 14, Air Canada started daily direct flights from Sydney to Vancouver using a Boeing 777, replacing an indirect flight via Honolulu. The fuel-efficient aircraft can travel long distances.
Singapore Airlines submitted earlier that Australian regulators protect Australian carriers and there is not enough competition between Australia and the United States where only Qantas and United Airlines service Australia directly.
Singapore Airlines said the co-operation agreement between Air Canada and Air NZ on the Vancouver route was likely to let the carriers sustain flights and be in a better position to develop the market once a healthier aviation environment was achieved.
Air NZ and Air Canada said there might not be enough demand to support daily year-round direct services without the deal.
Air NZ said there was no basis to suggest it planned direct flights from Sydney to Vancouver as it had no network in Australia.
- NZPA
