Competition and Competition Policy in the Trans-Tasman Air Travel Market

12 Pages Posted: 31 Dec 2008  

Tim Hazledine

University of Auckland

Date Written: 2008-05

Abstract

New data on air fares offered on 29 trans-Tasman and domestic New Zealand routes are analysed to test whether competition between traditional or legacy airlines still matters for pricing in the new air travel regime characterised by internet booking systems and competition from low cost carriers. It is found that market structure does indeed still matter. Air fares are significantly lower on those domestic New Zealand routes where Air New Zealand faces competition from Qantas. In addition, on the trans-Tasman routes, the new entrants Virgin (Pacific) Blue and Emirates have put competitive pressure on Air New Zealand and Qantas, but such pressure would not be sufficient to compensate for loss of independent competition between the larger incumbents.

Suggested Citation

Hazledine, Tim, Competition and Competition Policy in the Trans-Tasman Air Travel Market (2008-05). Australian Economic Review, Vol. 41, Issue 4, pp. 337-348, December 2008. Available at SSRN: https://ssrn.com/abstract=1318405 or http://dx.doi.org/10.1111/j.1467-8462.2008.00508.x

Tim Hazledine (Contact Author)

University of Auckland ( email )

Private Bag 92019
Com. A, room: 119
Auckland
New Zealand
64-9-373-7599 extn: 7435 (Phone)

Paper statistics

Downloads
5
Abstract Views
515