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Air Services Agreements signed with Scandinavia

7 February, 2000 Media Statement

Air Services Agreements signed with Scandinavia

“New Zealand has its first air services agreements with Denmark, Norway and Sweden”, the Minister of Transport, Mark Gosche, announced today.

The agreements were signed in Wellington today by the Minister and the Ambassadors of Sweden, Lars-Erik Wingren; Denmark, Jens Ostenfeld; and Norway, Ove Thorsheim.

“These three agreements provide a sound basis for the future development of direct air links between Scandinavia and New Zealand, which would enhance service options for travellers from those countries to this part of the world” said Mr Gosche.

Nearly 23,000 Scandinavians visited New Zealand in the year ended November 2000, an increase of 15% over the previous year.

“The signature of these agreements is evidence of the Government’s commitment to creating new opportunities and expanding existing opportunities for our airline and tourism industries”, the Minister said.

The three new agreements contain virtually all the features of “open skies” agreements. They give the airlines of each country the opportunity to put in place services without restriction as to the routes that may be operated, the capacity or frequency that may be offered, or the choice of code-share partners.

In addition, individual airlines have the freedom to establish their own prices and to vary those prices without requiring the approval of authorities in each country.

The pricing freedom means that airlines will have the maximum flexibility to develop and implement innovative and competitive prices, in line with market conditions.

The three countries – Denmark, Norway and Sweden – negotiate as a single bloc with bilateral partners, with each concluding a separate but essentially identical bilateral agreement with that partner.

This approach, which differs from the traditional bilateral approach to inter-governmental air services arrangements, results from the 1946 formation of Scandinavian Airlines System (SAS) as a consortium of the national airlines of Denmark, Norway and Sweden.

SAS operates international air services on behalf of the three countries.

SAS is a founding member of the Star Alliance, which Air New Zealand, along with its subsidiary Ansett, joined in early 1999.

It is not expected that airlines will take immediate advantage of the new opportunities, but are likely to do so in the medium term. It is likely that code-share opportunities will be taken up, rather than operation by an airline of its own aircraft over the entire route.

ENDS

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