Maybe not quite done?
Qantas seeks closer Air NZ ties
November 01, 2002
QANTAS Airways chief executive Geoff Dixon renewed his call today for trans-Tasman consolidation.
Mr Dixon said an alliance with Air New Zealand would be partnership of equals, enabling both airlines to provide better service standards, better fares and a better customer proposition.
He said such an alliance would also provide a certain amount of sustainability into the future.
"The logic of further consolidation of the aviation industry in the current environment is compelling," Mr Dixon said.
Addressing the American Chamber of Commerce, Mr Dixon said both airlines would remain totally autonomous but would be able to provide a better level of service.
"It seems like a sensible thing but if people in their wisdom decide otherwise, Qantas will get on with its life," Mr Dixon said.
Mr Dixon criticised the Federal Government's stance barring any further sale of Qantas.
"I was very critical of the government in refusing to change the Qantas sale act to allow Qantas to be more than 50 per cent owned," Mr Dixon said.
"We just wanted to be able to access more cheaper capital markets of the world and get money at the same rate as Singapore Airlines, but the Government said no."
Mr Dixon said although Qantas would always remain principally an Australian airline, it was actively looking to secure its future and grow outside Australia.
"We cannot afford to simply sit in Australia and risk being picked off in an increasingly liberal regulatory regime, to become an irrelevant regional player," Mr Dixon said.
From NZ Herald Newspaper.
Are Air New Zealand's directors complete twits?
The jury is still out, but on a first count it looks as though it will be a hung jury, necessitating a retrial.
The company's annual meeting was dominated by discussion from the floor on the possibility of the board proposing to shareholders an involvement with Qantas, rumoured to be as much as a 25 per cent stake in Air NZ for Qantas and including an exchange of directors between the two companies.
It was unfortunate that the board could not announce one way or the other the outcome of these negotiations as the issue overshadowed the meeting and dimmed the positive news of a substantial profit turnaround delivered under the stewardship of Ralph Norris and a clearly competent board.
Along with many others, I presented the case for the proposition that doing a deal with Qantas on any terms was unacceptable or downright dumb. The key points were as follows:
* That less than one year ago when the airline was on its knees, the then acting chairman of the company blamed Qantas for Ansett's demise and the resulting consequences to Air New Zealand.
* At the time, the current CEO of Qantas was on record as saying that he would push Air New Zealand out of business, or words to that effect, and has been accused of predatory pricing by market commentators since.
* Qantas has previously been a shareholder of Air New Zealand and it is widely known that boardroom issues in Air New Zealand at the time provided Qantas with a competitive edge which it is rumoured to have exploited.
* Qantas and Air New Zealand dominate inbound traffic and the prospect of collusion between the two companies to increase prices can only be bad for New Zealand and our number two foreign exchange generator, the tourism industry.
The board on behalf of the company presented a limp case for the need for a strategic partner, but even the directors did not speak out in support of Qantas as that partner.
Yet negotiations are continuing.
At the conclusion of arguments, I asked those members present to stand if they thought that "the board were complete twits for continuing discussions with Qantas".
I was already standing so I had a clear view of the jury's verdict. About one-third of those present stood to give their verdict on the issue.
The acting chairman, Roger France, then commented that he was comforted by those who remained seated.
France and the board should not take the view that a majority of shareholders are therefore in favour of a deal with Qantas.
Several shareholders said to me after the meeting that they would have stood if the proposition had not included the words "complete" or "twits".
Therefore all that can be taken from the jury's verdict is that a third of shareholders present thought that the board were "complete twits" in the circumstances.
The final trial will occur when and if the directors present a proposition to shareholders involving Qantas.
At that time a verdict will be delivered by a majority of the jury, as a unanimous verdict is clearly not possible.
The Government will be the final determining jury member, and how that juror reconciles its conflicts of interest will be very telling on the role of government as a shareholder of listed companies.
What is very clear, however, is that there is a strong groundswell of public opposition to Qantas being given a significant stake in our national carrier, and it is important for an otherwise competent board to be aware of this in planning Air New Zealand's future.