The Wellington Employers' Chamber of Commerce is asking Transport Minister Steven Joyce to reject the application by Air New Zealand Ltd and Virgin Blue Group to merge their transtasman services."Contrary to the claims of the airlines that it would r
The Wellington Employers' Chamber of Commerce is asking Transport Minister Steven Joyce to reject the application by Air New Zealand Ltd and Virgin Blue Group to merge their transtasman services.
"Contrary to the claims of the airlines that it would result in lower fares and an increase in competition on the Tasman, we fear it would result in increased fares and reduced flights," the lobby group said today.
"The impact of this would be fewer visitors to Wellington and fewer opportunities for Wellingtonians to fly to Australia affordably and conveniently. Overall, it would have a detrimental impact on the Wellington economy."
The alliance has also been opposed by Wellington International Airport, which discounted the airlines' claims that deal would grow their combined market power to better compete against Qantas and Jetstar.
The airport said the alliance would substantially lessen competition, and boost average fares so that fewer people travelled.
The chamber, which has a membership of 1600 businesses, said that not only were international passenger links important for Wellington as a tourist destination, it was essential that local businesses had sufficient choice and access.
"Competition on air routes is the best way to deliver cost-effective customer services, and is also ultimately in the best interests of the airlines."
The chamber -- created by a merger of Wellington's regional Chamber of Commerce and the Employers and Manufacturers Association (Central) on July 1 -- has also contacted the Australian Competition and Consumer Commission to oppose the airline deal.
It said many of the claimed benefits of the alliance around flight frequency and fares, were "speculative only" and the it should be referred to the Commerce Commission, even though the relevant legislation in New Zealand was the Civil Aviation Act.
The minister's powers were limited to authorising agreements on tariffs and capacity, rather than issues such as revenue allocation, integration of scheduling, route collaboration, planning of flights and agreeing minimum service standards and pricing of airfares -- all of which would be of interest to the Commerce Commission.
The government was an 83% shareholder of Air New Zealand and though the minister would make his decision as a regulator rather than a shareholder the Government would still be open to the perception that it was conflicted in the decision, the chamber said.
"This is at least the third time in a decade that airline operators have attempted what we consider to be anticompetitive trans-Tasman strategies," the chamber said.
"It is frustrating that these companies should be pursuing such schemes rather than focusing on improving their competitiveness."
