Airline Fears Predatory Pricing
14/02/2003 07:11 PM
IRN
A company trying to start a new Trans-Tasman airline fears the Air New Zealand-Qantas merger will give Virgin Blue a leg up.
Virgin Blue is opposing the merger, saying it will give its two rivals greater monopoly power.
The budget airline says previous reports into the proposed merger have understated the cons while overstating the pros, and says it should be allowed to get its trans-Tasman service started before any deal goes ahead.
But Lower Hutt based Jumpjet Airlines has told the Commerce Commission it believes Air New Zealand shareholder Singapore Airlines has been offered a part share in Virgin.
Jumpjet Managing Director, Nick Kile says if Virgin Blue breaks into the Trans Tasman market, its predatory capacity would shut anyone else out.
It its submission to the Commerce Commission it says Virgin, Singapore Airlines, Qantas and Air New Zealand between them would be able to exhibit extensive and substantial power in the market and virtually prevent any new entrant from gaining funding support and introduce fair competition.
Jumpjet says it is conceivable that the four airlines are aware of its plans to enter the market and part of their current strategy is to prevent that happening.
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