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Air New Zealand and Qantas application

Air New Zealand and Qantas application available on Commission website

Public versions of the applications for authorisation under the Commerce Act by Air New Zealand Limited and Qantas Airways Limited are now available on the Commerce Commission’s website, http://www.comcom.govt.nz. Interested parties are invited to make submissions on the applications. Submissions will close on 14 February 2003.

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.

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

Commission Chair John Belgrave 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.

He 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.

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

Release public versions of applications 18 December 2002

Invite submissions on the application Submissions due 14 February

Issue draft determination tbc

Seek further submissions on draft determination tbc

Hold conference tbc

Publish final determination tbc

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