Australian Airport Association calls for competition watchdog to stop deal

The Australian Airports Association has called on both Australian and New Zealand competition regulators to watch over the new agreement between Qantas and Air NZ.

They say this is necessary to minimise the impact on both the travelling public and Virgin Australia.

The new deal will mean Air NZ passengers booking flights into Australia can fly on Qantas domestic flights on an Air NZ ticket, and Qantas passengers can do the same in New Zealand.

For example, if you wanted to fly from Auckland to Alice Springs you could book this directly with Air NZ even though you'll be flying on a Qantas flight from Sydney to Alice Springs. 

The AAA CEO Caroline Wilkie, said the arrangement will lessen competition for travellers on both sides of the Tasman, which could impact tourism.

"There are a limited number of airlines operating in both countries, and between them, so it is important there remains a healthy level of competition in the market. This arrangement seems likely to make it harder for Virgin Australia to compete in the Australian market. 

The association said they were concerned the deal between the two airline's would further strengthen Qantas' position of dominance in the Australian market to the detriment of Virgin Australia and the public. 

"The ability to distribute each other's passengers on the other side of the Tasman will improve the market position of Qantas and Air New Zealand and make it harder for Virgin to compete on trans-Tasman routes. 

Wilkie said it's important to ensure both the New Zealand and Australian economies enjoy the benefits of affordable trans-Tasman travel, and those benefits are at risk with less competition flying these routes.

"It is essential the details of this agreement be publicly examined by the competition authorities to ensure it has no anti-competitive effects."

 Wilkie said involving the regulators is the only way to ensure competitive and affordable travel within and between Australia and New Zealand.