Qantas deal 'a must'- the Minister for Qantas
By Luke McIlveen and Steve Lewis
May 01, 2003
DEPUTY Prime Minister John Anderson will personally intervene to win regulatory approval for a $500 million trans-Tasman alliance between Qantas and Air New Zealand, a move described as "highly anti-competitive" by competition watchdog Allan Fels.
Mr Anderson last night revealed he would attempt to persuade the Australian Competition and Consumer Commission to overturn its rejection of the proposed alliance on the basis that a strong regional airline was in the national interest.
"It is in the national interest and therefore in the public interest for this region to have a strong and viable airline group that can sustain the current volatile aviation market now and in the future," Mr Anderson said.
"This proposed alliance is a potential first step in ensuring that this occurs."
Mr Anderson did not rule out canvassing new legislation to push through the alliance but would prefer to write to the commission first to request that the deal be allowed.
A spokesman for Mr Anderson said he would recommend to both Qantas and Air New Zealand that a more expansive list of undertakings be submitted to the ACCC. "We think they should come back with modified proposals that are more competitive," the spokesman said.
Professor Fels last night told The Australian: "There are established processes for the Government to make a public submission if they wish.
"The commission would consider the submission, but in the end the (Trade Practices) Act requires the commission to make its own independent decision on whether the alliance would be in the public interest," Professor Fels said.
In an interim report handed down on April 10, Professor Fels rejected Qantas's plan to buy a 22.5 per cent stake of Air New Zealand, saying the proposal was anti-competitive and likely to result in fare increases.
He said: "Passengers would be denied choice and increased airfares would be inevitable. The proposal would likely result in a substantial lessening of competition in a number of markets."
His remarks were backed up by the New Zealand Commerce Commission, which found the alliance would "likely result in a substantial lessening of competition".
Their findings drew fierce protests from Qantas chief executive Geoff Dixon, who said the aviation industry was in financial crisis.
"It is surely in the interests of both New Zealand and Australia to have viable competitive airline systems," Mr Dixon said.
"This will not be advanced by competition authorities ignoring the realities of the world."
The Australian