The Dominion Post
28 November 2002
Australian Deputy Prime Minister John Anderson has thrown his weight behind the proposed Air New Zealand-Qantas Alliance.
The Australian government was also keen to see Virgin Blue enter the trans-Tasman market in competition.
Mr Anderson was reported in Australian media as saying that Qantas had to be secured as the country's flag carrier in the national interest even if it was at the expense of consumers.
"I believe that Australia needs to think carefully about how we make certain that, as many international airlines . . . disappear over the next few years, Australia still has a flag carrier and a strong flag carrier at the end of it," Mr Anderson was reported as saying.
"Important as the consumer interest is, what I'm worried about is that we don't only look at the consumer' interests.
United Future Party leader Peter Dunne said the comments made it "clear that the proposed Qantas takeover of Air New Zealand is not designed to benefit the New Zealand consumer, nor the taxpayer-owned Air New Zealand. It is purely intended to shore up Qantas' international position and to hell with anyone else."
Mr Anderson led the Australian Government's charge against Singapore Airline's bid to increase its stake in Air New Zealand to 49 per cent from 25 per cent in favour of allowing Qantas to buy in instead.
The move resulted in Singapore Airlines walking away from the proposal which would have recapitalised Air New Zealand, and the Government was forced into an $885 million bailout of the national carrier.
A spokesman for Mr Anderson said yesterday no meetings between the two Governments were planned on the alliance.
The Qantas/Air NZ deal would have to pass competition and public benefit conditions set by the regulators.
"We would be concerned for example if this deal in some way prevented say Virgin (Blue) airline setting up a trans-Tasman operation, or in some way affected other trans-Tasman operations like United's," the spokesman said.
It is understood that Air New Zealand would offer to divest its budget trans-Tasman airline Freedom Air as part of the negotiations with competition watchdogs in both countries with Virgin Blue the likely buyer.
"We are very supportive of a new entrant," Mr Anderson's spokesman said.
An analyst said Mr Anderson's support for the alliance was the first step in ensuring the deal happened.
Air New Zealand said yesterday it would file its application to allow Qantas to take a 22.5 per cent in the national carrier on December 9.
Air New Zealand managing director Ralph Norris said yesterday that Qantas would have less influence around the boardroom table than a big shareholder would normally expect to have.
While one of the two Qantas directors would be required to form a quorum, and one of its directors had to sign written resolutions, they would still only have one vote each on the up to 10-member board.
Qantas could not veto any board decisions and if its directors either did not attend a meeting or did not sign a resolution, any decision would be delayed for 24 hours and would then be determined by majority vote, regardless of Qantas' position on the issue, Mr Norris said.