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The wolf cries of Air New Zealand

  • January 16th, 2008

My firm, Chapman Tripp, helped Wellington Airport defeat Air New Zealand’s attempts to set up a trans-Tasman cartel with Qantas. I worked on that project.

The latest Infratil update reminds me of Air New Zealand’s dire warnings of what would happen if they were not allowed to surrender to Qantas.

“Domestic passenger volumes grew a significant 16.5% in December reflecting the introduction of domestic services by Pacific Blue in mid November. As was the case for November cannibalisation of the existing market was not evident with the Pacific Blue passengers being additions to the market. Average loadings for the month were slightly below the previous year however this is not unexpected given the over 20% increase in capacity. Year to date, domestic passengers are now 3.9% above the previous year”

Legal work can not always be on the side of the angels, but that job just keeps on giving (in satisfaction anyway – though it remains a “dont mention the war” topic with my friend John Palmer).

It keeps giving because virtually none of the fears with which Air New Zealand persuaded Ministers to give them covert support, and tried to bully the Commerce Commission, have proved well-founded.

Even Tasman routes seems to have remained profitable. If Air NZ is not coining it on current loadings they might as well close down.

“Growth in international passenger numbers in December remained modest with total passengers 2.6% above the previous year following a 1.5% decrease in seat capacity. The average airline load factor remained above 80%. Year to date growth in international passengers now stands at 4.6%, with seats having fallen by 4.3%. The continuing high load factors demonstrates the severe capacity constraints existing for Wellington services. Promising comments continue to be made by the airlines but we are yet to see this delivered in terms of flights on the ground. Until this occurs some Wellingtonians will be increasingly forced to travel through Auckland or Christchurch to cross the Tasman, or worse still will not travel at all.”

Wellington’s Infratil led the charge. Wellington councils, and Mayor Prendergast in particular all deserve credit for standing up to the Auckland attacks, and staring down Air NZ’s imaginary wolf.

PS David Farrar’s link to this post generated a string of serious comments


  • John Schnellenberg
  • January 17th, 2008
  • 7:29 am

They didn’t really say, “…flights on the ground…” did they?


They did indeed. I wish I’d noticed that extra juiciness in the good news.

  • JG
  • January 17th, 2008
  • 12:45 pm

One could argue that the airlines get more scrutiny because it’s far easier to drum up public support to keep airfares down than it is to argue an airport’s weighted average cost of capital is too high. (When the end result of both is that consumers pay more than they otherwise would in a competitive market).

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