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Clark Reneges Airline Competition Pledge

6 October 2001

The Prime Minister Helen Clark has reneged on the Government's commitment to ensure that New Zealand would have a competitive airline industry, National's spokesperson Belinda Vernon said today.

"When first considering the Air New Zealand deal Helen Clark repeated several times that the three criteria to be considered were landing rights, tourism, and competition.

"While the Government's bailout of Air New Zealand secures the company's landing rights it does nothing to ensure competition in New Zealand skies. New Zealand's second-biggest airline, Origin Pacific, is now assessing its future.


"The Government's ownership of Air New Zealand creates the risk of the taxpayer funding a monopoly service that keeps competitors out and pushes air ticket prices up. New Zealanders have always encouraged competition in the airline industry.

"What incentive is there for a new operator - or a current operator - to expand services if it knows that a Government-backed Air New Zealand may not have to subscribe to normal commercial disciplines?

"The Government is also criticising its own privatisation of Air New Zealand in 1989. But the airline's woes are not because it has been privately owned, the problems are because of the Government's dithering.

"Michael Cullen says the Government would look at selling its stake to a foreign investor when it wants to get out of Air New Zealand. If only the Government had accepted a cheque from Singapore Airlines four months ago taxpayers wouldn't have to fork out $885 million to save it now," Belinda Vernon said.

Ends


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