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Air New Zealand and Qantas

Air New Zealand and Qantas: Commerce Commission begins inquiry process

The Commerce Commission has today received joint applications from Air New Zealand Limited and Qantas Airways Limited for market behaviour and structure authorisations under the Commerce Act. The applications are under sections 58 and 67 of the Act, relating to restrictive trade practices and business acquisitions respectively.

Last month the airlines announced a proposed strategic alliance, subject to several conditions, one of which being approval from the relevant regulatory bodies. In New Zealand, one of the required approvals is from the Commission.

Commission Chair John Belgrave said the proposal clearly raised some competition issues for the domestic, trans-Tasman and trans-Pacific aviation markets.

“The purpose of the Commerce Act is to promote competition in markets for the long term benefit of consumers within New Zealand. The Commission’s role is to identify the competitive impact of the proposal and measure it against the benefits for New Zealand,” said Mr Belgrave.

Mr Belgrave said the Commission had no preconceptions about the outcome of the applications, which will be considered on their merits and within the framework of the Commerce Act.

“The Commission is an independent quasi-judicial body. We will make our determination within the statutory framework and on the basis of the relevant information and analysis. There will be an opportunity for the public to make submissions on the applications.

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Mr Belgrave said the Commission will consider the two applications in one process.

He explained that under section 58, the key issue for the Commission is the impact on domestic, trans-Tasman and trans-Pacific markets of the alliance. Under section 67, the Commission will need to consider the extent to which the proposed equity holding by Qantas substantially lessens competition in a market.

Public versions of the applications will be available on the Commission’s website once the Commission is satisfied that confidential material has been excluded.

Overview of process for authorisation applications
Action Approximate timeframe
Receive application 9 December 2002
Issue public notice Within 72 hours
Commence inquiry (including analysing submissions) Immediately
Invite submissions on the application Submissions due mid February
Issue draft determination tbc
Seek further submissions on draft determination tbc
Hold conference tbc
Publish final determination tbc

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