Trans-Tasman air merger

The Australian regulator ACCC has turned down a proposed merging of trans-Tasman services by Air New Zealand and arch rival Pacific Blue.

And rightly so. This was a blatant attempt by our national carrier to reduce competition. In any other industry if two competitors were discussing the elimination of competition between them, they would be charged with anti competitive offences punishable by huge fines and even jail sentences.

While the Tasman is often said to have the most competitive air space in the world, this really only applies to services starting and finishing in Auckland where multiple airlines operate.

This move shows up Air New Zealand's anti competitive colours again. When they can't drive the opposition out of business as they did with Kiwi Air, Qantas New Zealand, and Origin Pacific, they resort to forming alliances. In 2006 it was a code share with Qantas, and most recently shared services with Pacific Blue, which they claim will result in more seats, more destinations, and lower fairs.

Highly unlikely.

We only have to look at Air New Zealand actions in recent years to anticipate what might happen. Two years ago when Air New Zealand monopolised services from secondary gateways such as Palmerston North and Hamilton they dropped them. Services out of Wellington and Dunedin were greatly reduced.

Only the arrival of Pacific Blue forced a rethink with Rotorua added to the trans-Tasman network to combat the reintroduction of services to Hamilton and increased capacity applied to Wellington and Dunedin by Pacific Blue.


Our own consumer watchdog the Commerce Commission seemed reticent to deliver a swift no , at least until the Australian equivalent the ACCC delivered its decision. In 2006 the ACCC saved us from the proposed Air New Zealand code share agreement with Qantas.

Imagine if Telecom wanted to combine with Telstra Clear, the Power Companies wanted to combine, or Supermarkets proposed a merger. It just wouldn't happen so why is this somehow different?

It seems New Zealand consumers have been saved by the Aussies again.