Competition Law Affects Airport Ideas [ODT, 14/03/20]

Asked to suggest how the Queenstown Airport Corporation (QAC) could solve its growing capacity problem, the groups opposed to the commercial development of Wanaka Airport were of one mind — that Queenstown Airport should share its air traffic with existing airports such as Christchurch, Dunedin and Invercargill. However, that presents at least one obstacle: the Commerce Act. Mark Price reports.

The word “cartel” is most often heard in conjunction with South American drug outfits — Sinaloa being the best known.

However, the term does not relate to drugs specifically; it can denote anti-competitive behaviour of any sort.

So, for example, a group of New Zealand airport companies that worked together to reduce competition and maintain high prices would be a cartel.

And that would be an offence in New Zealand under the Commerce (Criminalisation of Cartels) Amendment Act 2019.

Queenstown, Dunedin and Invercargill Airports co-operate on some operational matters but, aware of the law, avoid anti-competitive behaviour.

Queenstown Airport Corporation chief executive Colin Keel has stated the company “supports the dispersal of air services capacity across the lower South Island” but has also made it clear such dispersal is a matter for the airlines, not the airports.

“This approach is consistent with the requirements of the Commerce Act,” he said last year.

So, that would seem to be an end of the matter — the airports abiding by the law and maintaining their commercial distance.

But there is an avenue the owners of the three airports could explore if they wished to share Queenstown Airport’s air traffic with other airports.

It is the provision in the Commerce Act allowing the Commerce Commission to “authorise anti-competitive agreements … where the public benefits outweigh the competitive harms”.

What case the airports would have would need to be contemplated by their lawyers.

It is, however, something that could well be under investigation already.

Read this in full here.

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