The withdrawal of Qantas from the Auckland-Los Angeles route is clearly not great news for flyers.

A monopoly is never good for consumers and the Qantas departure hands Air New Zealand an effective monopoly on the route.

But there are a couple of reasons why we shouldn't see Air New Zealand use this privileged position too aggressively.

One is that the airline is savvy when it comes to marketing and managing its brand. Any moves to price-gouge would be obvious and would attract a public backlash. That would weigh heavily against the short-term revenue gains - which would be marginal in the scheme of the airline's total earnings.

The other issue is that it remains vital for Air New Zealand to attract inbound US tourists to Auckland. The airline certainly doesn't have any kind of monopoly on the holiday intentions of Americans who could easily choose to go only as far as Australia or head for the increasingly cut-price destinations in Europe.




Also, other carriers including Qantas or Jetstar can still offer discount deals to budget travellers with the time and stamina to transit via Sydney.

No doubt the Qantas move is good news for Air New Zealand.

It most likely means fuller flights to the US and therefore fewer seats that need to be auctioned at discount rates.

But it shouldn't signal a new era of high fares for travellers.

Perhaps what makes the demise of the service more disturbing is that it strikes a raw nerve for Kiwis.

It plays on our fears, as a small island nation, of being left isolated.

The idea that flying to New Zealand is "not commercially viable" is a disturbing one. Tourism is one of our biggest earners, but there is also that lonely feeling of


http://news.google.com/news/url?sa=t&fd=...3D10786270