ABC News online
Mon, Dec 9 2002 5:29 PM AEDT
NZ carrier says it's Qantas deal or air war
Air New Zealand and Qantas have appealed to competition authorities on both sides of the Tasman to allow a planned alliance to go ahead.
The airlines need to convince regulators the Qantas buy-in will be good for consumers.
In a submission to New Zealand's Commerce Commission, Air New Zealand argues the alliance would create 200 new jobs in the airline and at least 2500 extra jobs in the country's tourism industry.
Airline chairman John Palmer has admitted Air New Zealand wants Qantas to buy a 22.5 per cent stake to ensure its long-term survival.
Mr Palmer says Qantas would engage in a war of attrition if the two airlines are not allowed to form an alliance.
Mr Palmer says Air New Zealand does not have the financial resources to fight such a battle.
ABC News Online
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AFX News
Qantas to resist Singapore "open skies" agreement
Qantas Airways Ltd is likely to resist efforts by the Federal government to reach an "open skies" agreement with Singapore as a trade-off for Qantas' proposed 550 million nzd equity alliance with Air New Zealand Ltd, the Australian Financial Review reported citing unidentifed Qantas sources.
Government officials are to travel to Singapore this month to negotiate liberalising the bilateral agreement on air services rights between the two countries but Qantas has serious reservations about a deal in the near term, believing it would not benefit as much from it as Singapore Airlines.
Singapore has open skies agreements with New Zealand and the US, with a similar deal with Australia possibly enabling it to fly direct between Australia and the US in competition with Qantas.
Qantas is concerned that because it faces constraints on the capacity it can operate to ports such as Paris, its ability to take advantage of reciprocal rights to fly beyond Singapore will be limited.
© AFX News
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ABC News Online
Mon, Dec 9 2002 8:04 PM AEDT
Air NZ admits Qantas deal 'anti-competitive'
Air New Zealand has admitted to the country's Commerce Commission that its proposed alliance merger with Qantas is anti-competitive, but argues the deal is necessary for its survival.
Qantas and Air New Zealand have now begun the difficult task of convincing regulators the proposed 22.5 per cent buy-in will be good for consumers.
In a submission to the Commerce Commission the airlines argue although the deal will lessen competition, it will also bring a net benefit to both countries of hundreds of millions of dollars.
The airlines have also conceded the deal could lead to fare increases within New Zealand and on trans-Tasman flights.
But Air New Zealand has told the commission it cannot afford to refuse the $500 million offer from Qantas.
Its chairman John Palmer says the company could be wiped out if the two companies are not allowed to form an alliance.
The Australian Competition and Consumer Commission says the proposal is very complex and it will take some months to assess whether the benefits to the travelling public outweigh the costs.
Virgin
The airlines told the regulators the alliance would encourage Virgin Blue to fly the trans-Tasman route if it has only one competitor.
Executives from Virgin Blue have met with New Zealand officials to argue against the alliance.
Virgin's head of commercial David Huttner says consumers will lose if the deal goes ahead.
"It's certainly not good for the travelling public, they're going to stitch up a monopoly where you have Air New Zealand's domestic dominance and Qantas's very deep pocket to go out and spend and stitch up the Tasman for years to come," he said.
Last edited by Wirraway; 9th Dec 2002 at 08:10.