How Kiwi travellers are 'flying blind' and can lose when airlines team up

Air NZ and Qantas signed a domestic code share deal last year. The airlines say the could co-operate in other areas. Photo / Supplied

If you want to know exactly how many tonnes of mail Air New Zealand flies to Australia in any given month, there's one place where you can easily find out.

More relevant to airline watchers are figures on the number of seats it has on the Tasman, how many of them are occupied and how much of the market it has. You can find a trove of figures for all airlines serving Australia courtesy of that country's Department of Infrastructure, Transport, Cities and Regional Development.

The on-time performance of airlines is also set out detail.

There's nothing like it in New Zealand - there's a dearth of data, in fact - and one aviation sector group here reckons consumers could be stung as a result.

On-time performance by airlines here tends to be released when they're doing well on that score, and the New Zealand Airports group warns that a lack of other information in this country makes it difficult for regulators to assess and oversee alliances and joint ventures.

The Government intends to impose more stringent rules on airline alliances - which can reduce competition and push up prices - and is also under pressure to improve the range of information available.

While NZ Airports acknowledges that when airlines team up the passengers can win in some ways, its chief executive Kevin Ward worries that regulators - and the public - are ''flying blind'' because of the lack of information.

''I think they do have to have a really robust assessment and if you're doing that with less information than other places have got then you might not be getting the best possible outcome for the consumers,'' he says.

The public and the government were ''very poorly'' informed.

There is no official collection or publication of what is happening in terms of passenger numbers and flights to specific towns and cities, domestic air cargo volumes, which city-to-city routes are growing or shrinking over time, the standards of on-time performance and cancellations, or what is happening to average air fares, says Ward.

New Zealand is way behind in this public transparency compared to other countries, he argues. Australia has a well-developed system and regular publications that could be a model for this country, says Ward.

Airports - themselves under frequent attack from airlines for the way they charge - have a strong interest in alliances and codeshares.

''As a broad generalisation, airports tend to notice that these lead to a reduction in routes and limits in capacity. Airports would prefer to see more aeroplanes, more choice and more capacity — if they're sustainable.''

The last point is critical. Airlines counter competition fears by saying that by co-operating and joining up they avoid competing so hard on routes that they become uneconomic for everyone, they all pull out and nobody wins.

Air New Zealand and Singapore Airlines have a joint venture. Photo / Supplied

House of Travel commercial director Brent Thomas says alliances are crucial for making travel more seamless and ensuring air services remained sustainable. Within alliances, service can increase with complementary flying around the week by the two airlines. But he too says competition can suffer.

''Where it's not so good is where it reduces competition on a route. We've seen a fair bit of this on the Tasman over the years and we'll continue to see that.''

NZ Airports questions the role an Air New Zealand-Qantas domestic codeshare played in Jetstar's decision to pull out of regional flying from December and the Commerce Commission has told the Business Herald it has had three complaints about the deal, alleging anti-competitive conduct.

While the commission doesn't look at any international alliance agreements (they are assessed by the Ministry of Transport), because the Air NZ-Qantas deal was domestic, it did review that when it was announced last year.

''At the time, we considered that the codeshare arrangement would not have a material effect on Jetstar's incentives in relation to its New Zealand business," says a commission spokesman. "We indicated that we would continue to monitor the effects of the codeshare arrangements and we will review current developments.''

Transport Minister Phil Twyford says changes proposed in the Civil Aviation Bill will make the criteria that have to be taken into account more explicit, and also specifically provide for conditions to be imposed, or for authorisations to be revoked.

At the moment it seems the only time the ministry looks at alliances is when they come up for renewal.

Twyford says airline alliances can bring a range benefits to travellers. These benefits include a wider range of flight times, more seats and reciprocal frequent flyer schemes.

Submissions on the bill had also raised the issue of data availability and this is now being looked into, the minister says.

Airline alliances come and go. Air NZ and Virgin Australia were once partners, now they're not. Photo / Supplied

Aviation commentator Irene King says that from the outside, these co-operative alliances can appear anti-competitive but online travel sites had given consumers more power.

''You just need to go on the likes of Webjet and see there can be quite different airfares in the market even though the passenger may be travelling on the same aircraft. The internet has given an infinite number of choices as to carriers, time of day, level of service.''

Teaming up

Airline alliances take several forms including:

Interline agreements

A commercial agreement between airlines to handle passengers when they're travelling on different airlines on the same itinerary. This allows passengers to check their bags through to their final destination, and check in all the way to their destination. These require airlines to have compatible technology.

Codeshare

Where one airline puts its number and name - or code - on a flight operated by another airline, and sells tickets on that flight. This allows airlines to offer service to cities they don't actually fly to.

Joint ventures and revenue sharing

These are complex arrangement where airlines co-ordinate pricing
and schedules, and share revenue (not profits). These are big calls by airlines and government regulators. Air NZ and Singapore Airlines is an example of a joint venture.

The global airline groups

Oneworld, Star Alliance and Sky Team are examples - depending on relationships between airlines within them, this can mean codesharing and reciprocal benefits such as lounge access.

Ups

• Alliances and joint ventures mean airlines have a better chance of being successful, and that's good in the long run for passengers
• Frequent flyer points can be shared, depending on the depth of the alliance
• More seats on routes between co-operating airlines
• Connection to networks far beyond an individual airline's routes
• Convenience at check-in, carriage of bags
• Reciprocal lounge access
• Increased competition if airlines in alliances compete on the same route. An example will be more competition flying non-stop across the Pacific between Air NZ/United and Qantas and American Airlines, whose joint venture has been renewed. It is understood American Airlines will announce more flights from Auckland later this month.

Downs

• They can stifle competition. When Virgin Australia and Air New Zealand split up after seven years, the two airlines put on more transtasman flights, and Virgin offered a better product.
• Poor communication of which airline's planes you will be flying on.