Wirraway
17th Aug 2004, 04:50
Tues "Sydney Morning Herald" Late News
Virgin Blue cries foul over Air NZ tactics
August 17, 2004 - 9:54AM
Australian budget airline Virgin Blue has accused Air New Zealand of using taxpayer money to drive it out of the market.
Virgin Blue said it would write to the New Zealand Commerce Commission after Air New Zealand announced today that it would start a weekly service between Christchurch and Rarotonga in the Cook Islands on December 1.
Virgin announced in June that it planned to fly the same route "mid-week" by the end of the year, under its Pacific Blue brand, and was applying for regulatory approvals.
Air NZ said its Cook Islands service would depart each Wednesday using a new 146-seat Airbus A320 aircraft for the service, which, like the Pacific Blue service, would connect with trans-Tasman flights.
The airline, majority-owned by the New Zealand Government after a $NZ885 million ($A821 million) bailout in 2001, denies it is trying to force Virgin off the route.
It says it is responding to market demand.
But Virgin's head of commercial operations, David Huttner, said a clear pattern was emerging of Air NZ duplicating competitor initiatives before they had a chance to start flying them.
"It appears to be a broad-based strategy against any competitor," Mr Huttner said.
The commission is already investigating a complaint by Nelson-based Origin Pacific that Air NZ had acted anti-competitively by replicating its proposed Hamilton to Christchurch service in September last year, forcing Origin to abandon its plans.
Air NZ said at the time that it had been planning to fly the route for two years. It has since added more flights.
After Virgin Blue suggested in April 2001 that it could fly a direct jet service between Auckland and Dunedin, Air NZ announced a similar service a month later.
At the time, Air NZ said it was filling a gap left after the collapse of Qantas New Zealand.
Virgin claims that Air NZ moved its budget airline Freedom Air off domestic routes and on to the Tasman to discourage it from entering the market.
And earlier this year, Air NZ responded to a proposed charter service by travel agent Flight Centre from several New Zealand centres to Fiji by launching Freedom on the same routes, and substantially lowering prices.
Flight Centre abandoned its plans after delays in getting approval from the Fiji authorities.
Mr Huttner said Virgin would write to the commission in support of Origin, but he stopped short of saying the airline would lodge its own formal complaint over the Rarotonga service.
"We can fight the fight ourselves, but they are playing this game with the taxpayer's money," Mr Huttner said.
But Air NZ group general manager of sales and marketing, Norm Thompson, said the service was a response to a 49 per cent increase in the number of New Zealanders going to the Cook Islands in the year to June.
Christchurch did not have a service to the Cook Islands and Air NZ was meeting a market demand, he said.
It had been nine years since Air NZ had been in a position to open new routes "and we are certainly going for it", Thompson said.
NZPA
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Virgin Blue cries foul over Air NZ tactics
August 17, 2004 - 9:54AM
Australian budget airline Virgin Blue has accused Air New Zealand of using taxpayer money to drive it out of the market.
Virgin Blue said it would write to the New Zealand Commerce Commission after Air New Zealand announced today that it would start a weekly service between Christchurch and Rarotonga in the Cook Islands on December 1.
Virgin announced in June that it planned to fly the same route "mid-week" by the end of the year, under its Pacific Blue brand, and was applying for regulatory approvals.
Air NZ said its Cook Islands service would depart each Wednesday using a new 146-seat Airbus A320 aircraft for the service, which, like the Pacific Blue service, would connect with trans-Tasman flights.
The airline, majority-owned by the New Zealand Government after a $NZ885 million ($A821 million) bailout in 2001, denies it is trying to force Virgin off the route.
It says it is responding to market demand.
But Virgin's head of commercial operations, David Huttner, said a clear pattern was emerging of Air NZ duplicating competitor initiatives before they had a chance to start flying them.
"It appears to be a broad-based strategy against any competitor," Mr Huttner said.
The commission is already investigating a complaint by Nelson-based Origin Pacific that Air NZ had acted anti-competitively by replicating its proposed Hamilton to Christchurch service in September last year, forcing Origin to abandon its plans.
Air NZ said at the time that it had been planning to fly the route for two years. It has since added more flights.
After Virgin Blue suggested in April 2001 that it could fly a direct jet service between Auckland and Dunedin, Air NZ announced a similar service a month later.
At the time, Air NZ said it was filling a gap left after the collapse of Qantas New Zealand.
Virgin claims that Air NZ moved its budget airline Freedom Air off domestic routes and on to the Tasman to discourage it from entering the market.
And earlier this year, Air NZ responded to a proposed charter service by travel agent Flight Centre from several New Zealand centres to Fiji by launching Freedom on the same routes, and substantially lowering prices.
Flight Centre abandoned its plans after delays in getting approval from the Fiji authorities.
Mr Huttner said Virgin would write to the commission in support of Origin, but he stopped short of saying the airline would lodge its own formal complaint over the Rarotonga service.
"We can fight the fight ourselves, but they are playing this game with the taxpayer's money," Mr Huttner said.
But Air NZ group general manager of sales and marketing, Norm Thompson, said the service was a response to a 49 per cent increase in the number of New Zealanders going to the Cook Islands in the year to June.
Christchurch did not have a service to the Cook Islands and Air NZ was meeting a market demand, he said.
It had been nine years since Air NZ had been in a position to open new routes "and we are certainly going for it", Thompson said.
NZPA
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