1 00:00:00,800 --> 00:00:03,080 Speaker 1: Hever du for Clan nine. 2 00:00:02,920 --> 00:00:05,200 Speaker 2: Nineteen is the text understandard text fees apply now to 3 00:00:05,240 --> 00:00:09,120 Speaker 2: another subject, consumer, New Zealand. Once the government's inquiry into 4 00:00:09,119 --> 00:00:11,800 Speaker 2: a New Zealand's prices, they say, e New Zealand has 5 00:00:11,800 --> 00:00:15,200 Speaker 2: a virtual monopoly domestically, so they want the Commerce Commission 6 00:00:15,200 --> 00:00:17,880 Speaker 2: to do a market study and consumer in z CEO's 7 00:00:17,920 --> 00:00:19,079 Speaker 2: John Duffy, Hey, John. 8 00:00:19,880 --> 00:00:20,759 Speaker 1: Hey, here the how's the guard? 9 00:00:20,880 --> 00:00:21,319 Speaker 2: Good? Thank you? 10 00:00:21,360 --> 00:00:21,960 Speaker 1: Now, what do you reckon? 11 00:00:22,000 --> 00:00:23,279 Speaker 2: A market study is going to find? 12 00:00:24,880 --> 00:00:28,200 Speaker 1: Well, it would bring some transparency into pricing in the 13 00:00:28,360 --> 00:00:31,640 Speaker 1: New Zealand aviation market. So at the moment we've got 14 00:00:32,280 --> 00:00:34,000 Speaker 1: a whole lot of confusion, a whole lot of really 15 00:00:34,040 --> 00:00:37,080 Speaker 1: high prices and a whole lot of annoyed consumers and 16 00:00:37,159 --> 00:00:39,600 Speaker 1: we need to get to the bottom of what's driving 17 00:00:39,640 --> 00:00:40,680 Speaker 1: prices in this market. 18 00:00:40,800 --> 00:00:43,800 Speaker 2: Yeah, now, transparency is cool, but that doesn't sound like 19 00:00:43,840 --> 00:00:45,920 Speaker 2: it's actually going to fix anything, will change anything for 20 00:00:46,000 --> 00:00:46,360 Speaker 2: me or you? 21 00:00:46,520 --> 00:00:50,720 Speaker 1: Is it? Yeah, it's the start, it's the start of change. 22 00:00:50,800 --> 00:00:53,479 Speaker 1: So it's very easy to point your finger at you know, 23 00:00:53,640 --> 00:00:57,800 Speaker 1: one or two potential causes for high prices, But until 24 00:00:57,800 --> 00:01:00,320 Speaker 1: you've done a comprehensive study and you can say this 25 00:01:00,360 --> 00:01:03,959 Speaker 1: is what the market dynamics look like. It's it's very 26 00:01:03,960 --> 00:01:06,440 Speaker 1: difficult to say these are the things that we can 27 00:01:06,520 --> 00:01:09,319 Speaker 1: do to fix the problems in the market. And you 28 00:01:09,360 --> 00:01:11,840 Speaker 1: know in previous market studies, you know that that has 29 00:01:11,920 --> 00:01:13,880 Speaker 1: been that, you know, the problem that people have raised 30 00:01:13,880 --> 00:01:17,520 Speaker 1: the market studies happened let's say supermarkets or banks or fuel, 31 00:01:18,080 --> 00:01:22,040 Speaker 1: and the market doesn't change immediately. The commis christionis final 32 00:01:22,120 --> 00:01:26,040 Speaker 1: report Lands, but it allows for a reason to evidence 33 00:01:26,080 --> 00:01:28,959 Speaker 1: based debate on what the next best options are and 34 00:01:28,959 --> 00:01:30,680 Speaker 1: then you can hand it back to the government and say, 35 00:01:30,720 --> 00:01:33,120 Speaker 1: all right, you know what you could do to fix things. 36 00:01:33,520 --> 00:01:34,840 Speaker 1: It's up to you whether you do it or not. 37 00:01:35,319 --> 00:01:36,880 Speaker 2: So what do we do if we find out that 38 00:01:36,880 --> 00:01:38,320 Speaker 2: they're making too much money off us? 39 00:01:40,600 --> 00:01:42,759 Speaker 1: That's that's a good question. We look at perhaps what 40 00:01:42,840 --> 00:01:46,640 Speaker 1: the barriers too, this is in the market are facing 41 00:01:47,160 --> 00:01:50,640 Speaker 1: so that they can expand their operation and use natural 42 00:01:50,760 --> 00:01:54,760 Speaker 1: competitive tension to lower prices and increase service. So when 43 00:01:54,760 --> 00:01:57,040 Speaker 1: we say we need an inquiry into the aviation market, 44 00:01:57,080 --> 00:01:58,960 Speaker 1: we're not just saying this is a this is a 45 00:01:58,960 --> 00:02:01,120 Speaker 1: look at a New Zealand. In New Zealand are a 46 00:02:01,240 --> 00:02:04,760 Speaker 1: very dominant force in the domestic aviation market. We're saying 47 00:02:04,760 --> 00:02:06,680 Speaker 1: we need to have a look at the whole shooting match. 48 00:02:06,760 --> 00:02:11,280 Speaker 1: So the role airports play, the role, small airlines play 49 00:02:11,680 --> 00:02:14,920 Speaker 1: the role are border transport infrastructure plays because you know, 50 00:02:14,919 --> 00:02:17,680 Speaker 1: if you could, if you can get in the car 51 00:02:17,800 --> 00:02:20,960 Speaker 1: reasonably as an alternative for flying, that's actually competition. If 52 00:02:20,960 --> 00:02:26,840 Speaker 1: you my coach, those are that influence your decision whether 53 00:02:26,919 --> 00:02:29,880 Speaker 1: or not to buy an airline price and influence how 54 00:02:29,919 --> 00:02:32,680 Speaker 1: those airlines set their prices to compete with other modes 55 00:02:32,680 --> 00:02:33,359 Speaker 1: of transportation. 56 00:02:33,680 --> 00:02:36,359 Speaker 2: So how many routes are there where air New Zealand 57 00:02:36,400 --> 00:02:38,720 Speaker 2: has got no other competition in the air. 58 00:02:40,200 --> 00:02:41,840 Speaker 1: Look, don't have that in front of me, but it 59 00:02:42,760 --> 00:02:45,919 Speaker 1: as more than half of the roots of New Zealand. 60 00:02:46,240 --> 00:02:49,000 Speaker 1: There are New Zealand in New Zealand has a virtual 61 00:02:49,000 --> 00:02:54,639 Speaker 1: monopoly or there is or there is only offering limited 62 00:02:54,720 --> 00:02:55,840 Speaker 1: seat in competition. 63 00:02:56,400 --> 00:02:59,320 Speaker 2: So would you count, for example, like Wellington depict In 64 00:02:59,440 --> 00:03:01,600 Speaker 2: as a virtual monopoly because there's just a very small 65 00:03:01,600 --> 00:03:03,040 Speaker 2: player up against in New Zealand. 66 00:03:04,320 --> 00:03:06,160 Speaker 1: I'm not even sure if in New Zealand flies and 67 00:03:06,240 --> 00:03:09,280 Speaker 1: depict In, but I know sounds maybe not that route. 68 00:03:09,280 --> 00:03:11,840 Speaker 2: But let's say Lenham, Let's say Wellington Blenham. 69 00:03:11,440 --> 00:03:15,399 Speaker 1: Yep, Wellington Blenham or Wellington Nelson there is there's there's 70 00:03:15,400 --> 00:03:18,640 Speaker 1: one other player, as I understand it, with limited capacity 71 00:03:19,280 --> 00:03:20,160 Speaker 1: flying those routes. 72 00:03:20,520 --> 00:03:21,720 Speaker 2: Virtual monopoly then. 73 00:03:22,960 --> 00:03:25,800 Speaker 1: Certainly high market share. But then if you look at 74 00:03:26,160 --> 00:03:29,000 Speaker 1: I don't know Wellington Gismond for example, I don't think 75 00:03:29,000 --> 00:03:32,160 Speaker 1: there's anyone else. If in New Zealand is not flying 76 00:03:32,160 --> 00:03:34,840 Speaker 1: that day, that's a problem if you live in Gisbond 77 00:03:34,880 --> 00:03:35,880 Speaker 1: and need to get home. 78 00:03:36,200 --> 00:03:38,480 Speaker 2: John, how much money would be too much money that 79 00:03:38,480 --> 00:03:39,520 Speaker 2: they'd be making off us? 80 00:03:41,360 --> 00:03:44,040 Speaker 1: Well, well, that's a big question is so we we 81 00:03:44,560 --> 00:03:46,840 Speaker 1: discovered that a million dollars a day in excess profits 82 00:03:46,920 --> 00:03:49,480 Speaker 1: was too much for for supermarkets to be making. You know, 83 00:03:49,760 --> 00:03:52,360 Speaker 1: the New Zealand public was very very uncomfortable with that. 84 00:03:53,920 --> 00:03:57,440 Speaker 1: The complicating factor here is that, you know, there's a 85 00:03:57,440 --> 00:03:59,840 Speaker 1: bit of a merry go round of money here because 86 00:03:59,840 --> 00:04:02,880 Speaker 1: the government as a majority shareholder in New Zealand. So 87 00:04:03,560 --> 00:04:06,520 Speaker 1: if in New Zealand are making profits above what they 88 00:04:06,520 --> 00:04:09,440 Speaker 1: should be in a normally competitive market, some of those 89 00:04:09,480 --> 00:04:12,720 Speaker 1: profits are going back to the government as the majority shareholder. 90 00:04:13,120 --> 00:04:17,000 Speaker 1: Whether those are whether that's appropriate or not, that's another question, 91 00:04:17,440 --> 00:04:19,440 Speaker 1: and probably more of a political question than the one 92 00:04:19,480 --> 00:04:21,360 Speaker 1: a competition in quiry would answer. 93 00:04:21,480 --> 00:04:24,720 Speaker 2: John, thanks very much, John Duffy, consuming New Zealand CEO. 94 00:04:24,880 --> 00:04:27,080 Speaker 2: Hey to the States really quickly the econ. 95 00:04:27,520 --> 00:04:29,760 Speaker 1: For more from Hither Duplessy Allen Drive. 96 00:04:29,920 --> 00:04:33,320 Speaker 2: Listen live to news talks it'd be from four pm weekdays, 97 00:04:33,440 --> 00:04:35,640 Speaker 2: or follow the podcast on iHeartRadio.