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

Auckland mayor Wayne Brown has launched a bid to establish a direct flight from Auckland Airport to Brazil's Sao Paulo.

He believes this could boost trade between New Zealand and Brazil by up to $1.5 billion a year.

NZIER Principal Economist Chris Nixon says this is a good idea - and could open up new opportunities for New Zealand.

"Given the mayhem which is happening in the United States at the moment and their incoherent economic policies - we've got to be innovative." 

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Episode Transcript

Speaker 1 (00:00):
Aukland Mayor Wayne Brown is pushing for direct flights from
Auckland to sal Polo and Brazil. He reckons if we
do this, it means we could tap into trade between
China and Brazil, which is worth nearly five hundred billion
dollars a year. Chris Nixon is ends it ie as
principal economist. He Chris good afternoon, crazy idea or not.

Speaker 2 (00:19):
Oh, I don't think it's a crazy idea. I think
it's quite a good idea. I mean, given the mayhem
which is happening in the United States at the moment,
and they're incoherent economic policies, we've got to be innovative
and we've we've got to take the lead on these projects.

Speaker 1 (00:35):
Okay, So if the trade between China and Brazil is
worth that much, and he reckons we tap into one
percent of it, we could double the GDP of Auckland.
But how would a flight tap into one percent of it?

Speaker 2 (00:48):
Well, I think firstly, it's not just about China, it's
about ACIM, it's about East Asia, and it's about China,
and so I think that's the first thing. The second
thing is that goods like e commerce goods are starting
to really go ballistic in places like Brazil, Argentina, Chile, Peru,

(01:14):
and so therefore there is an opportunity here to connect
the Asian and East Asia and China with South America
through New Zealand, and I think that's the key issue.

Speaker 1 (01:31):
But how are we making the money? Are we making
money of people jumping off the plane for a bit
of a stop in Auckland or what.

Speaker 2 (01:37):
Well, one of the things is that IATA has done
some work around this and they would argue that a
one percent increase in connectivity will increase trade by six
point three percent. So it's the point that we need

(01:57):
the connectivity to drive trade. Now, you know, the trade
could be an e commerce, it could be in tourism,
it could be an education export export. We don't really know.
But the point is if you have the connectivity, then
you see the opportunities. So that's why I like Wayne

(02:21):
Brown's enthusiasm. He's come to a bit late, but you
know it's good that he's here.

Speaker 1 (02:25):
Why do you say he's come to it a bit late.

Speaker 2 (02:27):
Well, I wrote this report in twenty and twenty one,
so that's that's three years, three years ago. But the
point is he's here and he's making these noises, and
I think they are the right noises to make.

Speaker 1 (02:42):
So the thing is, though, I think we've only got
one flight between Auckland and South America.

Speaker 2 (02:48):
That's the problem, is it Chile. Is that where it
goes it's yes, it's Latin, and it goes from San
Diego to Auckland and then on to Melbourne.

Speaker 1 (02:56):
And then also we had the Buenos Aidou's flight, which
in New Zealand was doing in that absence candidate. So
that suggests it just doesn't work for the airlines.

Speaker 2 (03:04):
Well, I think that's possibly right, But I think there's
an opportunity here. And the opportunity that presents itself is
around e commerce, it is around tourism. We've got to
sort our setting, our regulatory settings out around those things,
by the way, But if those things happen and we

(03:27):
design rules that around the way businesses operate, not the
way we think they operate, then I think we've got
a chance here.

Speaker 1 (03:37):
Chris, interesting stuff, Thanks very much for talking us through.
That's Chris Nixon, principal economist. It ends in iea. So
there you go. Wild idea turns out to be like
maybe a wildly good Idea. For more from Heather Duplessy
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