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Air NZ and Qantas: Commission holds conference

Air New Zealand and Qantas: Commission holds conference

The Commerce Commission will commence a six day conference next week on its draft determinations relating to the application by Air New Zealand Limited and Qantas Airways Limited for authorisation to enter into a strategic alliance and the application by Qantas Airways to subscribe for up to 22.5% of the voting equity in Air New Zealand.

The conference will be held from Monday 18 to Friday 22 August, and Monday 25 August, in the ground floor conference room of the NGC Building, 44-52 The Terrace, Wellington.

In April, the Commission released its draft determinations that on the basis of the information available, it would be likely to decline applications by both airlines for authorisation under the Commerce Act. The Commission considered that an alliance between Air New Zealand and Qantas Airways Limited would not result in a net public benefit to New Zealanders.

Interested parties were asked to make submissions and cross-submissions on the draft determination. The conference is a process where parties can present their submissions orally, and the Commission can ask questions based on those submissions.

The Commission will release its final determination on the applications as soon as practicable after the conference.

Attached is a copy of the conference programme.

Conference Agenda 18 – 25 August 2003

Ground Floor, NGC Building, 44 The Terrace, Wellington

Commissioners: Ms Paula Rebstock (Acting Chair) Mr Peter Taylor Ms Denese Bates (QC) Mr Donal Curtin

Please note: Time has been allocated to parties based on initial presentation requests, the Commission’s requirements for questions of each party and the constraints of the Conference schedule. This agenda is as accurate as possible, based on the information provided to the Commission by parties presenting at the conference. Times will be adhered to as closely as possible. However, the Commission notes the possibility of some variation. The Chair will confirm changes to timing as the conference progresses. The Applicants have identified four confidential sessions which are highlighted in bold. Morning and afternoon tea will be taken at appropriate breaks in sessions. All parties are asked to contact Commission staff immediately if their timing or equipment requirements change.

Monday 18 August 2003
10.00 am Start
10.15 am Chair – opening remarks
10.30 am Applicants Opening/Review of Air NZ and Qantas Position – Ralph Norris/Geoff Dixon
11.45 am Airline Model – Doctor Michael Tretheway
12.30 pm Lunch
1.30 pm VBA Entry and Expansion – Airline Representatives/David Bental (APG)
3.00 pm Impact of VBA Entry – Dr Clifford Winston
4.00 pm The Counterfactual, Discussion of Qantas Expansion – Qantas Representatives/David Bental (APG)
5.00 pm The Counterfactual, Qantas Confidential Session – Qantas Representatives/APG
6.00 pm Engineering & Maintenance, Qantas Confidential Session – Qantas Representatives
7.00 pm End

Tuesday 19 August 2003
9.00 am Applicants VBA Entry and Expansion, The VBA Model in Europe & Australasia – Ray Webster (CEO, easyjet).
9.30 am Competitive effects in the Travel Distribution Market – Airline Representatives
10.00 am Effect of 5th Freedom Competition – Airline Representatives
10.45 am The Confidential Counterfactual, Air NZ Confidential Session – Air NZ Representatives/Eric Lucas (PWC)
12.15 pm Lunch
1.15 pm Implications of the Confidential Counterfactual for Tourism, Qantas/Air NZ Confidential session – Henry Ergas (NECG)/Airline Representatives/Others
1.45 pm Aviation condition and International analysis of Airline Mergers – Professor Willig/Margaret Guerin-Calvert
3.30 pm Tourism Benefits of the Alliance – Airline Representatives/NECG
5.00 pm Quantification of Public Benefit of Additional Tourists – Henry Ergas/Others
6.00 pm End
Wednesday 20 August 2003
9.00 am Applicants Competitive Effects in Freight Markets – Airline Representatives/NEC
9.30 am Introduction to Economic Arguments – Henry Ergas
10.30 am Allocative Efficiency Detriments – Henry Ergas/Professor Willig
12.15 pm Lunch
1.15 pm Review of Economic Models
2.45 pm Productive and Dynamic efficiencies – Henry Ergas/Margaret Guerin-Calvert
4.00 pm Cost Savings – Henry Ergas
4.30 pm Scheduling and new Direct Flights – Henry Ergas/Margaret Guerin-Calvert
5.30 pm Balancing – Henry Ergas
6.00 pm End
Thursday 21 August 2003
9.00am Virgin Blue David Huttner (Head of Commercial)/Counsel (Simpson Grierson)
12.00 pm Lunch
1.00 pm Infratil et al Representatives of Infratil et al/Grant David (Chapman Tripp)/LECG representatives/Professor Hausman
6.00 pm End
Friday 22 August 2003
9.00 am Gullivers Pacific Ralph Lattimore/Simon Hope/Andrew Bagnall/Tim Hazeldine/Kathy O’Connor
10.30 am Origin Pacific Tony Marks/Robert Inglis
11.30 am Bon Voyage Gerard Murphy
12.00 pm Christchurch Airport George Bellew/Tom Weston QC
12.30 pm Lunch
1.30 pm Invercargill Airport John Walsh (General Manager)/Norman McFarlane
2.00 pm Polynesian Airlines John Fitzgerald/Norman McFarlane
2.30 pm Travel Agents Association Peter Lowry/Andy Marshall
3.00 pm CTU and EPMU Tony Wilton (CTU)/Andrew Little (EPMU)
3.30 pm Consumers Institute David Russell/Paul Doocey
4.00 pm Jumpjet Airlines Nick Kile/John Cook/Chris Scanlan
4.30 pm Save Air NZ Ian Prior (Convenor)/Robin Halliday (Executive Officer)
5.00 pm End
Monday 25 August 2003
10.00 am Applicants Right of reply – John Palmer/Henry Ergas/Margaret Guerin-Calvert
11.30 am Chair’s closing
11.35 am End

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