Airline collapse good news for Tasman travellers?

Lower airfares across the Tasman may ultimately result from the collapse of New Zealand domestic airline Qantas NZ.

The demise of the airline has prompted interest from Qantas and Virgin Blue, both of which have been eyeing the NZ market for expansion, to fill the gap created. Qantas NZ had no connection with Australia's Qantas other than a franchise agreement for the use of the name.

With Ansett now owned by Air New Zealand, such a move by either Qantas and Virgin could lay the foundations for integrating the domestic passenger markets of both countries. If both were to be allowed to compete on trans-Tasman routes the sort of fare discounting seen on major Australian routes over the past six months could quickly spread to trans-Tasman flights.

The governments of Australia and New Zealand have had a ‘single aviation market' in place to allow this scenario since 1996 but so far airlines from both countries have not fully exploited the opportunities to compete in each other's backyards.

For the benefit of travellers on both sides of the Tasman, InfoChoice believes these latest developments might turn out to be just what's needed to entice Australian operators to more effectively compete to and within New Zealand (although foreign-owned Virgin Blue would face more regulatory hurdles).