30 April 2001

The Government should be careful it doesn't blow the opportunity for real competition in New Zealand's domestic airline market, National's Transport spokesperson Belinda Vernon said today.

"The Government has backed away from waiving the ownership condition which prevents Virgin Blue from operating in New Zealand and a transtasman service because it believes Virgin's British ownership could help win New Zealand better access to the UK.

"This is pie in the sky thinking. The Government is clutching at straws if it thinks it can achieve a reciprocal arrangement with the UK through Virgin Blue. "Virgin Blue is an Australian-based airline that has no connection with the UK other than its British ownership. The airline clearly has no sway with the British Government regarding bilateral aviation rights.

"This looks like a delaying mechanism or an excuse not to make a straight forward decision on the exemption issue.

"On the one hand the Government says it welcomes competition yet on the other it is threatening to lose a major opportunity for competition in our skies.

"It is good to hear that Virgin Blue is keen to consider regional services as it has in Australia with the Townsville service. New Zealand's regions also present an opportunity for smart niche operators to fly regional routes. Origin Pacific has shown this is possible.

"Virgin Blue's message is it wants to grow the market not decimate it. In Australia it has expanded the market by 40 percent while capacity has only been increased by 15 percent. We shouldn't lose the opportunity to see the same in New Zealand.

"Virgin Blue will make flying accessible to Kiwi mums and dads and small businesses who today can't afford to fly. The Government should stop procrastinating," Ms Vernon said.

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