Air Pacific Cops Flak From Virgin
Wed "The Australian"
AIR PACIFIC COPS FLAK FROM VIRGIN
The Australian
15-01-2003
VIRGIN BLUE has attacked an application by Fiji-based Air Pacific to join the Qantas alliance as an attempt to "completely stitch up" the South Pacific market.
The Australian Competition and Consumer Commission confirmed yesterday that Air Pacific, 46 per cent owned by Qantas and 51 per cent by the Fiji government, has lodged a formal authorisation application about joining the alliance.
ACCC commissioner Ross Jones said the application was expected, given the Pacific carrier's links to Qantas, but was a bigger issue for New Zealand than Australia.
"Given that Qantas has 46 per cent, we always thought of Air Pacific as part of the arrangement," Mr Jones said.
"It's an issue for the New Zealanders because Air New Zealand and Air Pacific both fly from Auckland to Fiji. But if you want to go from Australia to Fiji , you go with Air Pacific and Qantas code shares. "
But Virgin Blue described the Air Pacific submission as ominous.
"This confirms to Virgin Blue that the travelling public should be worried about a complete stitch-up of the South Pacific market," Virgin Blue head of commercial David Huttner said.
"The further damage to competition in the region only reaffirms the need for significant structural undertakings if we are to avoid long-term damage to sustainable competition. "
Air Pacific is a significant player in the Pacific islands, and said last year it planned to replace its Boeing 747-200 this year with two 747-400s as part of an ambitious plan that would boost capacity by 60 per cent -- or 1.25 million seats annually.
The new aircraft, to be used on the Sydney-Nadi-Los Angeles routes, were part of a $F1 billion ($1.19 billion) fleet expansion plan that would also require extra 250 to 300-seat aircraft.
Meanwhile, Mr Jones said the ACCC would quickly post Qantas undertakings expected as early as next week on its website so that interested parties could see them before making submissions on the proposed alliance.
The airline has indicated the undertakings will seek to protect new entrants on trans-Tasman and domestic New Zealand routes and ensure the alliance did not take unreasonable actions relating to capacity and pricing on monopoly routes.
Mr Jones said he expected Qantas to submit broad statements of intent that would form a starting point for legally enforceable undertakings to be negotiated at a later date.