Belinda Vernon National Transport Spokesperson

21 April 2001

Govt must take decisive action in wake of Qantas NZ collapse

When Cabinet meets on Monday it must take decisive action to ensure the collapse of Qantas New Zealand does not spell the end of competition in the domestic air market, National's Transport spokesperson Belinda Vernon said today.

"The fate of Qantas New Zealand is now in the hands of the receivers. But the current situation poses the very real risk that Air New Zealand may gain a virtual monopoly on the major domestic routes.

"The Government must ensure New Zealanders retain the ability to choose between domestic carriers. The benefits of competition over the past 14 years have been huge. The onus is now on the Government to pull out all the stops to ensure those benefits are not lost.

"The writing has been on the wall for some time over Qantas NZ and the Government must surely have been keeping its finger on the pulse. The Minister of Transport now needs to talk to the parties involved to ensure competition returns to the domestic air market as quickly as possible.

"Cabinet needs to encourage potential investors in domestic air travel, and make sure they are not discouraged by its rules on overseas investment. Cabinet needs to assure itself and New Zealanders that those rules are flexible and are free of red-tape and delays.

"Labour must not be hijacked by its junior coalition partner, the Alliance, which will doubtless oppose any foreign purchase of Qantas NZ or significant overseas investment in any new domestic air service. This issue of restoring fair competition to the domestic air market is simply too important to be held hostage by extremist political agendas.

"The Government also has a responsibility to ensure that disruption to the public is minimised. Thousands of ticket-holders are stranded, and my sympathies go out to them, and to the 1,100 staff employed by the airline. This is also devastating news for the airline's suppliers and investors. But if the collapse of the second biggest domestic carrier creates a virtual monopoly then all New Zealanders will be worse off," Belinda Vernon said.

Ends

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