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Air New Zealand and Qantas: audited calculations

Air New Zealand and Qantas: audited calculations

The Commerce Commission has audited its mathematical calculations contained in the modelling used in its draft determinations relating to the Air New Zealand and Qantas authorisation applications. As a result of the audit, the estimates of detriments and benefits included in the draft determinations have been amended by incorporating some technical corrections.

Importantly, the Commission’s methodology and assumptions underlying the modelling results, and the model itself, have not been changed. The Commission anticipates receiving submissions on the model and its assumptions during the Commission’s conference planned to be held in August.

The overall impact of the amendments is to increase the negative net benefits from the proposed alliance between Air New Zealand and Qantas. The Commission’s revised calculations on net benefits now fall within the range of -$195.4 million to -$466.5 million in the third year of the acquisition.

Summary of Annual Net Public Benefits ($M) (Year 3)
Draft Determination Revised Estimates
Detriments -202 to -432 -245 to -500
Benefits 30.2 to 46.3 33.5 to 49.6
Net Benefits -155.7 to -401.8 -195.4 to -466.5
The revisions to the relevant text and tables in the draft determination are set out in full in a separate document which is available on the Commission’s website, http:// http://www.comcom.govt.nz.

Submissions on the draft determinations are due on Friday 20 June, with cross submissions due 18 July 2003. The Commission plans to hold a conference in August.

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