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Alliance or bust says Air NZ boss
13 April 2003
Air New Zealand will pursue an alliance with Qantas or it will not survive the "new order of aviation", Air New Zealand managing director, Ralph Norris, said yesterday.
Norris made a blunt statement after a scathing initial response from the Commerce Commission over the airlines' plans to form an alliance.
Norris dismissed the commission's optimism about Air New Zealand's financial position as "aggressively over confident".
"To infer that there may be other alliance partners waiting in the wings or that the government or other benefactors will put additional capital into Air New Zealand on request is unrealistic," he said.
"Regrettably, fairy godmothers do not exist in business. There are, however, many predators who would like to control Air New Zealand, or see it weakened."
Norris said traditional airlines were suffering as budget providers offered cheap deals on popular routes.
"The expectations of passengers have changed and budget airlines are providing point to point travel on cherry picked routes and in doing so undermine traditional airlines which provide comprehensive, geographical networks."
He attacked Virgin Blue's insistence that Air New Zealand sell its budget arm Freedom Air before an alliance was approved.
Norris said Virgin Blue was "cynically posturing" and "demanding competition watchdogs give it a free monopoly on the budget airline business across the Tasman and domestically in New Zealand".
He said without the alliance, Qantas would "move aggressively to protect its position" in New Zealand and in trans-Tasman markets.
"Without the alliance, Qantas simply cannot afford to live in its status quo position in local markets and Air New Zealand cannot afford to respond. The "war of attrition" is not an economic theory - it is commercial reality."