Latest / Best of Business / Chris Nixon: NZIER Principal Economist on mayor Wayne Brown's push for direct flights to Sao Paulo

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Chris Nixon: NZIER Principal Economist on mayor Wayne Brown's push for direct flights to Sao Paulo · Best of Business

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  Speaker 2: ULKA.
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  Speaker 3: Mayor Wayne Brown is pushing for direct flights from Auckland
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  Speaker 3: to sal Polo and Brazil. He reckons if we do this,
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  Speaker 3: it means we could tap into trade between China and Brazil,
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  Speaker 3: which is worth nearly five hundred billion dollars a year.
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  Speaker 3: Chris Nixon is ends in IE as principal economist.
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  Speaker 2: He Chris good afternoon.
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  Speaker 3: Crazy idea or not.
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  Speaker 2: Oh, I don't think it's a crazy idea. I think
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  Speaker 2: it's quite a good idea. I mean, given the mayhem
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  Speaker 2: which is happening in the United States at the moment,
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  Speaker 2: and their incoherent economic policies, we've got to be innovatives
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  Speaker 2: and we've we've got to take the lead on these projects.
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  Speaker 3: Okay, So if the trade between China and Brazil is
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  Speaker 3: worth that much, and he reckons we tap into one
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  Speaker 3: percent of it, we could double the GDP of Auckland.
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  Speaker 3: But how would a flight tap into one percent of it?
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  Speaker 2: Well, I think firstly, it's not just about China. It's
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  Speaker 2: about aim, it's about East Asia, and it's about China,
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  Speaker 2: and so I think that's the first thing. The second
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  Speaker 2: thing is that goods like e commerce goods are starting
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  Speaker 2: to really go ballistic in places like Brazil, Argentina, Chile, Peru,
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  Speaker 2: and so therefore there is an opportunity here to connect
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  Speaker 2: the Asian and East Asia and China with South America
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  Speaker 2: through New Zealand. And I think that's the key issue.
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  Speaker 3: But how are we making the money? Are we making
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  Speaker 3: money of people jumping off the plane for a bit
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  Speaker 3: of a stop in Auckland or what.
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  Speaker 2: Well, one of the things is that IATA has done
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  Speaker 2: some work around this and they would argue that a
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  Speaker 2: one percent increase in connectivity will increase trade by six
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  Speaker 2: went three percent. So it's the point that we need
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  Speaker 2: the connectivity to drive trade. Now, you know, the trade
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  Speaker 2: could be an e commerce, it could be in tourism,
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  Speaker 2: it could be an education, export exports. We don't really know.
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  Speaker 2: But the point is if you have the connectivity, then
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  Speaker 2: you see the opportunities. So that's why I like Wayne
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  Speaker 2: Brown's enthusiasm. He's come to a bit late, but you
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  Speaker 2: know it's good that he's here.
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  Speaker 3: Why do you say he's come to it a bit late?
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  Speaker 2: Well, I wrote this report in twenty and twenty one,
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  Speaker 2: so that's that's three years, three years ago. But the
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  Speaker 2: point is he's here and he's making these noises, and
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  Speaker 2: I think they are the right noises to make.
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  Speaker 3: So the thing is, though, I think we've only got
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  Speaker 3: one flight between Auckland and South America.
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  Speaker 2: That's the problem.
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  Speaker 3: Is it is it Chile? Is that where it goes?
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  Speaker 2: It's yes, it's lat Ham and it goes from San
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  Speaker 2: Diego to Auckland and then on to Melbourne.
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  Speaker 3: And then also we had the Buenos AIDA's flight which
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  Speaker 3: in New Zealand was doing in that since candidate. So
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  Speaker 3: that suggests it just doesn't work for the airlines.
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  Speaker 2: Well, I think that's possibly right. But I think there's
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  Speaker 2: an opportunity here. And the opportunity that presents itself is
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  Speaker 2: around e commerce, it is around tourism. We've got to
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  Speaker 2: sort of our setting our regulatory settings out around those things,
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  Speaker 2: by the way, but if those things happen and we
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  Speaker 2: design rules that around the way businesses operate, not the
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  Speaker 2: way we think they operate, then I think we've got
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  Speaker 2: a chance here.
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  Speaker 3: Chris, interesting stuff. Thanks very much for talking us through.
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  Speaker 3: That's Chris Nixon principal economist. It ends in IEA, so
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  Speaker 3: there you go. Wild idea turns out to be like
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  Speaker 3: maybe a wildly good idea.
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