Mon "Dominion Post"
Air NZ in competition probe
15 December 2003
By DAVID KING
The Commerce Commission has ordered a full investigation into a claim about alleged anti- competitive behaviour by Air New Zealand.
Nelson airline Origin Pacific went to the competition watchdog in September to complain about Air NZ's move to introduce a direct Christchurch-Hamilton service shortly after Origin announced similar plans.
Origin shelved its plans after Air NZ said it would be flying exactly the same route, at the same time, but with a larger aircraft.
Origin accused the national carrier of abusing its dominant market position, and produced a "smoking gun" internal memo which it said proved its case.
At the time Air NZ strongly denied any wrongdoing, with senior vice president of regional airlines Norm Thompson saying it was coincidental the new service was being launched at exactly the same time as Origin.
Yesterday Air NZ said it had no comment to make while an investigation was going on. A Commerce Commission spokeswoman said an initial inquiry into Origin's internal complaint had been held, and the commission had decided to open a full investigation.
"We are investigating an alleged breach of section 36 of the Commerce Act in regards to (Air NZ) taking advantage of its market power," she said. It was not possible to say when the investigation would be complete. In September Air NZ said it had been planning to introduce the Christchurch service for months. Origin claimed its "smoking gun" memo proved otherwise.
The internal memo, which was sent to staff at Air NZ subsidiary Eagle Air dated September 5 to detail the new service, said Air NZ would be "... responding to counter this move (to start the Christchurch- Hamilton service) as we must in a competitive environment".
Mr Inglis said the complaint raised an important issue for consumers in the regions. "I think it is very important, because, if the dominant operator can act as blatantly as that appears to be, it doesn't give much hope for the regions to have or enjoy the competition that travellers have on the main trunk. We would be disappointed if this were swept under the carpet."
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