Travel agents attack plan for Air NZ-Qantas link

By CHRIS DANIELS

Travel agents say Air New Zealand's proposed alliance with Qantas would destroy competition in the corporate travel market, leading to increased fares and lack of choice.

Their claims come in the latest round of submissions on the airlines' plan, which closed yesterday.

The Travel Agents Association of New Zealand, said about 65 per cent of the domestic air services market could expect to pay more for the travel requirements, with a corresponding increase in the alliance airlines' revenues. The same situation would apply to 35 per cent of the transtasman market.

The association says that under the alliance there will be no effective competition in the corporate air services market.

Currently, there was good "price tension" and competition between Air NZ and Qantas, with large corporates and Government departments seeking tenders for their travel business, it said.

Under the alliance, Air NZ would control all pricing, discounting, rebating and routing from, to and within New Zealand.

"There will be no effective choice for the business/corporate traveller. The proposal made by the applicants specifically referred to and sought permission for joint tendering for corporate and government accounts," the association said.

This would inevitably result in the government and business community paying increased fares.

The Commerce Commission rejected the airline's marriage plans in April and the deadline for comments on the decision closed yesterday.

Qantas wants to spend up to $550 million buying up to 22.5 per cent of Air NZ. They would then join forces, organising routes, schedules and fares on all flights to, from and within New Zealand.

The commission, which must approve anti-competitive arrangements, found that the net detriment to New Zealand would be between $245 million and $500 million a year. It rejected a key plank of the airlines' application - that a destructive "war of attrition" would inevitably develop should they continue as rivals.

A joint Air NZ-Qantas submission was yesterday delivered to the Commerce Commission, but its contents will not be known till early next week, after negotiations about what parts can be kept confidential.

Wellington International Airport has asked the commission to consider the two parts of the airlines' application separately.

Air NZ and Qantas are asking for permission to do two things: for Qantas to buy into Air NZ and secondly, to set up a "Joint Airline Operation network".

WIAL says that a Qantas shareholding of 22.5 per cent, or even 15 per cent, would give it significant influence over Air NZ and access to important confidential information "such that a substantial lessening of competition would occur."

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