We’re calling for a market study into the competitiveness of our domestic aviation sector

Air travel keeps our country connected, and according to some mayors, Air New Zealand’s monopoly on most regional routes has led to dwindling connectivity.

Consumer NZ’s Sentiment Tracker found New Zealanders are concerned about competition in the sector, with 51% of us thinking that our domestic aviation market is uncompetitive.

When competition is low, prices rise for consumers while profits rise for the business. Air New Zealand’s record profit in the 2022/23 financial year coincided with some of the biggest increases in domestic airfares in recent history.

We’re also concerned the airline takes unfair advantage of supply and demand factors through a practice that is set to be banned in Australia: its dynamic pricing algorithm.

The Government is a 51% shareholder in Air New Zealand, yet no one is holding Air New Zealand to account.

That’s why Consumer wrote to Minister of Commerce and Consumer Affairs Hon Andrew Bayly urging him to direct the Commerce Commission to initiate a market study.

A market study would look at all the factors that affect competition in the aviation sector.

We think it’s the only way to get to the bottom of a range of concerns we have about Air New Zealand and its significant, 86% market share.

While a market study can’t solve the problems, getting information about competition in this sector out in the open can set the wheels turning for taking action to address sky-high fares, unfair pricing practices and potentially anti-competitive behaviour.

Read our letter to Minister Bayly.