Origin incensed at Air NZ 'gazump'

By CHRIS DANIELS aviation writer

Nelson-based airline Origin Pacific says Air NZ is abusing its market dominance and dumping capacity on the new Hamilton-Christchurch route.

Its claims of market abuse come at a time when Air NZ should be on best behaviour. The Commerce Commission is in the final stages of deciding whether to approve the airline's request to form an alliance with its rival, Qantas.

Origin, a Qantas code share partner, detailed its claim in a press release issued yesterday, saying it had been a victim of "market arrogance" since its founding in 1997.

It says Air NZ is trying to gazump its new service between Hamilton and Christchurch, which had been due to start on October 13.

"Three weeks ago, Origin Pacific published its new, expanded summer schedule featuring new routes and 10,000 extra seats per month. Among other significant changes, Origin launched a new, daily non-stop Hamilton-Christchurch service, a route not flown by any airline."

Setting up a new route was a "financial gamble" said Origin, but it had seen a gap in the market.

Airline founder and executive chairman Robert Inglis, said that this week, Air New Zealand suddenly announced that it too would launch a Hamilton-Christchurch service.

He said that the new Air NZ flights would not only be daily, but leave at exactly the same time in the morning, with a larger, 66-seat, aircraft - more than twice the size of the Origin plane.

"Is it a coincidence? Only if you believe in flying pigs," said Inglis.

"Origin Pacific has therefore, reluctantly, concluded that this service cannot survive while being dumped on by the national carrier at exactly the same times and days, and will have to be withdrawn before it starts."

Inglis said the Air NZ launch was a deliberate strategy to exercise its dominant market position.

"If Origin Pacific or any other airline thinks of something new for a customer in the provinces, the full weight of Air New Zealand will be brought to bear."

It was incredible that Air NZ would take this step when the commission was about to deliver its verdict on the alliance plan.

"Air New Zealand has spent millions of dollars in legal assistance hoping to convince the commission that were they to approve the alliance, Air New Zealand and Qantas would not use their increased market power in a prejudicial manner," he said.

"No doubt their response will be that everything is fair in a war of attrition - unless, of course, it happens to be Air New Zealand who are being attacked, in which case you need to spend $7 million asking the Commerce Commission to save you.

"We don't believe this is fair competition - and we're absolutely sure provincial New Zealand will agree."

Air NZ said the Origin claim of dumping capacity on the Hamilton-Christchurch route was untrue. It had been examining the route for two years and decided in July to go ahead.

The move was unrelated to Origin's launching a similar service.

"Any suggestion that Air New Zealand has chosen at the spur of the moment to place 66-seat ATR aircraft on the route is ridiculous," said senior vice-president of sales Norm Thompson.

"Anybody who knows anything about operating an airline knows that the decision to operate on a new route is not made overnight."