Rental cars at airport

Press, 11 January 1986, Page 16

Rental cars at airport

The Christchurch City Council has probably accepted the best possible outcome to its dispute with some of the car rental firms that want to do business at Christchurch Airport. The result is far from satisfactory for any of the parties, including the City Council. Any other course, however, would almost certainly have involved the council in the payment of damages to one or more of the rental firms. As it is, sufficient concessions have been made to avoid litigation. The council loses a little in revenue from leases of airport facilities to two companies, and has had to give undertakings about the treatment those two firms will receive for the next 20 years. The real losers are members of the public who want to rent vehicles at the airport. Two firms retain something close to a shared monopoly on hiring and advertising. They are substantial and reliable firms, but are not the cheapest. At least until 1990 they will have no competition, except for the hire of motor caravans, within the airport terminal or on airport land outside. Why this must be so will not be easy to explain to overseas visitors who want a choice of firms when hiring vehicles. Hertz and Avis can hardly be blamed for holding the City Council to the terms of their contracts. Newmans, the firm that proposed to hire cars from a new building erected on airport land with the consent of the City Council, cannot be blamed for being irate that it was misled by the council as to what business could be done from the site. The City Council has bungled by not interpreting with sufficient

care the small print in its own contracts with the car hire firms.

Behind this quarrel there remains the earlier issue of access to rental cars at the airport by a fourth firm, Budget Rentals. That has still to be decided by an appeal to the Privy Council in Britain. When more space is available in the airport terminal, the council’s latest undertakings to Hertz and Avis should ensure that those two firms continue to enjoy advantages, even if other car hire firms are admitted to the terminal.

That is the price the council has had to pay for allowing Newmans to operate, even in a restricted manner, on airport land some distance from the terminal. The alternative would have been for the council to break its agreement with Newmans and to prevent that firm from hiring any vehicles from its new rental vehicle building. The building, costing more than $4 million, has been put up with the council’s consent to its use.

The whole affair is not likely to stimulate the kind of robust commercial competition that works to the advantage of people who want to rent cars. Nor does it help those customers who do not want to be limited to the two firms that are already doing business in the airport terminal. The lesson must surely be that any local authority required to set limits to the activities of competing firms, because of shortage of space or for any other reason, needs to look carefully at the detail of contracts before they are signed.