NZ Commission needs to go after airports

AIR New Zealand wants the country’s Commerce Commission to focus less on price-fixing airlines and freight forwarders and more on airports to limit over-pricing in freight services.

Air NZ says monopolistic airports are able to push prices up while airlines and freight forwarders operate in a strongly competitive environment.

“No other country has the [same] utterly insane legislation that allows airports to set prices as they see fit,” Air NZ’s general counsel John Blair said. “The many millions of dollars being expended by the Commission in the current ‘collusive behaviour’ proceedings could have been better applied to addressing the monopolistic behaviour of airports.”

The airline accuses the competition regulator and Ministry of Transport of have differing attitudes to the commercial arrangements between airlines, and that the industry’s regulation sits more easily under the ministry’s watch, because it understands air service agreements better than the Commerce Commission.

Blair defended the use of tariffs approved by foreign regulators. “[Their filing] remains an obligation of airlines, and failure to do so leaves them vulnerable to the kind of technical, capricious proceedings by the Commission currently being defended at the cost of tens of millions of dollars to New Zealand taxpayers”.

In July Air NZ was dropped from the US Justice Department’s probe into air cargo cartels, and has escaped from the European Commission and South Korean regulators.

The airline still faces prosecution in New Zealand, and the High Court last month gave leave to the Commerce Commission to pursue its case. Air NZ has ardently denied any wrongdoing since the case came to light.

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