Air NZ picked to announce Qantas deal on Monday

[Wirraway]

NZPA

Air NZ picked to announce Qantas deal on Monday
22 November 2002

Speculation on whether Air New Zealand is selling a stake of up to 25 percent to Qantas Airways may be answered at a meeting on Monday.

TVNZ reported tonight that meetings had been scheduled for Monday and preparations made for a joint press conference to announce the move, which has been widely expected.

A spokeswoman for Finance Minister Michael Cullen told NZPA tonight that she could not comment on whether Air NZ had called a meeting.

"The timing is in Air NZ's hands.

"In terms of where the Government sits, we have been aware for some while, because Ralph Norris said so publicly, that Air NZ wants to run something up before Christmas," she said.

"So as a consequence, the Government has sought and got advice about the appropriate procedures to handle a proposal, as and when we receive it, but the Government at this stage has not received any form of proposal from Air NZ."

The Government owns 82 percent of Air NZ after injecting $885 million into the airline late last year after its Australian subsidiary Ansett collapsed.

Air NZ spokesman Mark Champion would not comment on whether a meeting had been arranged for Monday.

"Discussions between Air NZ and Qantas are continuing, no agreement has been reached, and when we have anything, to report we will."

An announcement on a strategic alliance next week would come as Parliament was not sitting, delaying any political fallout over a move considered unpopular in New Zealand.

Air NZ and Qantas have both admitted for some months that they were in discussions about a possible equity deal, but have given no details.

Air NZ chairman John Palmer told the airline's annual meeting earlier this month that there was no done deal.

He promised any Qantas deal would not compromise the principles of majority ownership and control of the company.

Among the issues under discussion with Qantas were how to get the deal past competition regulators, and how to get Air NZ to switch from the global Star Alliance to the alternative oneworld grouping.

If the deal went ahead, it could also open the way for Qantas rival Virgin Blue to fly to New Zealand.

Benefits from an equity deal with Qantas would include a $450 million capital injection and feeder access to and from the all important Australian market.

Air NZ has reported a surprisingly good first quarter, normally a loss period, posting an operating profit of $30.4 million and a net profit of $17 million.

Air NZ shares closed today up 1c at 50c.

[Kaptin M]

"... after its Australian subsidiary Ansett..". Don't you just LOVE that 'small man' syndrome that dominate some Kiwis. :rolleyes:

I bet that if QANTAS does save Air Sheep's ass, by taking a share in them, they (QF) will be referred to as "Air New Zealand's junior partner" forever more.

Actually, I personally believe it would be better for Australia (and N.Z.) that if anyone were to buy in, Virgin would be a better alternative (than Q) to prevent QANTAS achieving a stranglehold.

[rmm]

An extract from the NZ Herald on the sale of 25% of AirNZ to QF,

Former Air New Zealand director Sir Selwyn Cushing is horrified.

"It just defies any sense of business common sense," he said.

It would be as stupid as having Wallabies captain George Gregan sitting in with the All Blacks and helping with tactics about the next test match.

"The Aussies will make sure it's nice and sweet and and sugary for the short term, but the long term will be disaster.

"Anyone with half a brain in the airline industry will understand that."


It's a pity this goose didn't heed his own advice in 1998. A good percentage of 16,000 people might have still been employed today. :mad:

Rmm

[henry crun]

Kaptin M. Subsidiary, n. A company having more than half of its shares owned by another company.

That sounds to me like correct English and an accurate description of the situation as it then existed.

[Kaptin M]

The word "subsidiary", in general usage, implies a smaller offshoot of the parent company. At the time Air New Zealand took over Ansett, its fleet size was 41 (8 747's, and 33 other heavies eg. 767's and 737's) - Ansett's was >130!
Perhaps an "associated company" might have been more apt don't you think Henry?

"Anyone with half a brain in the airline industry will understand that."
Well if that is the criteria, it would seem that Sir Selwyn is WELL qualified to comment then, wouldn't it! :D

[Pimp Daddy]

Former Air New Zealand director Sir Selwyn Cushing is horrified.

It just defies any sense of business common sense," he said.

You mean like most of the decisions he made while he was steering Air NZ into near oblivion with the Ansett debacle.

Makes no bones guys - Sir Selwyn is #1 on the culpability list for that.

[Boeing Belly]

Perhaps Qantas will re-name their latest aquisition, once the take-over is confirmed, QANTAS LINK. I think it is appropriate that all of QFs small regional airlines should share this common name.

[Wirraway]

Qantas gets Air NZ nod
The New Zealand Herald
23.11.2002 - By STAFF REPORTERS

The Government is expected to receive a firm proposal for the sale of a significant stake of Air New Zealand to Qantas on Monday.

A decision on the deal is expected by the end of the year.

The package will be sold politically as a "partnership" to try to dispel public concern about a sale to Qantas and the fact that the airline is being sold overseas so soon after the Government spent almost $1 billion bailing it out.

The Weekend Herald understands the deal will include a national interest package which will preserve the Air New Zealand brand and protect jobs on this side of the Tasman.

Finance Minister Michael Cullen said through a spokeswoman last night that "the Government is ready to receive a proposal".

"The Government has been aware for some time that Air New Zealand wanted a proposal up before Christmas," the spokeswoman said.

"Michael Cullen has received no proposal at this stage."

If a deal is announced next week, the Government will avoid immediate political criticism in Parliament which is in recess.

Leaked news of the plans immediately sparked opposition to any sale to Qantas.

The Opposition and some unions say the link would be anti-competitive.

One union source last night described the deal as "crazy", and National MP John Key said it would hurt passengers by cutting competition and driving prices up.

Air New Zealand has called a meeting of union representatives and its executives on Monday to discuss a "business decision".

The company's spokesman, Mark Champion, would not say if a meeting had been called or what it was about.

"Discussions between Air New Zealand and Qantas are continuing, no agreement has been reached and when we have anything to report, we will."

Chief executive Ralph Norris said two weeks ago that talks with Qantas were down to the "nitty gritty".

Air New Zealand wanted its plans afloat before Christmas.

John Key, National's associate transport spokesman, said a Qantas-Air New Zealand deal would lead to higher prices for customers, and cuts in the number of flights.

It was "farcical" to think the two airlines would continue to compete fully once a deal was struck.

Mr Key said he believed the two airlines has been holding talks with the Commerce Commission for some time in a bid to get pre-approval for the deal.

Any deal would have to be approved by the commission, and its Australian equivalent, as well as the Minister of Transport and the Cabinet.

Service Workers' Union secretary Darien Fenton said airline staff faced an anxious weekend waiting for news.

She said aviation unions had been given an urgent invitation to attend Monday's meeting in Auckland at 10am.

They had received no assurances about job security.

The Airline Pilots Association has also been called to the meeting.

Australia's Government last night said it did not know anything of the deal.

Transport Minister John Anderson was "in the bush" and not available.

The Government was last year forced to effectively renationalise Air New Zealand after the collapse of its Australian subsidiary, Ansett.

It announced an $885 million recapitalisation project for the company, buying an 82 per cent stake.

And it said it would give more money if necessary.

Ansett's demise, and the reasons for it, created tensions between Air New Zealand and Qantas, and the governments of both countries.

At one stage, angry Ansett staff who lost their jobs blockaded an Air New Zealand aircraft at Melbourne airport after learning Prime Minister Helen Clark was a passenger.

The Defence Force spent almost $15,000 flying an Orion to Australia to rescue her.

Engineers Union secretary Andrew Little said the union supported the deal, which could make the airline more viable in the long term.

"We want to survive, but we don't want to be swamped by Qantas culture in the process."

Former Air New Zealand director Sir Selwyn Cushing is horrified.

"It just defies any sense of business common sense," he said.

It would be as stupid as having Wallabies captain George Gregan sitting in with the All Blacks and helping with tactics about the next test match.

"The Aussies will make sure it's nice and sweet and and sugary for the short term, but the long term will be disaster.

"Anyone with half a brain in the airline industry will understand that."

It went against what the competitive market stood for, and highlighted the "huge mistake" the Government made last May over proposals to let Singapore Airlines buy a stake in Air New Zealand.

"The dithering of Cullen [finance minister Michael Cullen] has cost New Zealand plenty."

============================================
NZ City
23 November 2002

Opposition to Air NZ-Qantas deal

Aviation analyst says competition may not survive if Air NZ-Qantas deal goes ahead; National says "anyone but Qantas"

A word of caution to those hoping a deal has been stitched up between Air New Zealand and Qantas.

Air New Zealand has called unions to a meeting in Auckland on Monday, where it is expected to confirm it is selling a 25 percent stake to Qantas.

But aviation analyst Les Bloxham says there are too many hurdles in the way for a solid deal to be announced next week.

He says the biggest is proving to the Commerce Commission that trans-Tasman competition will survive.

Mr Bloxham says rumours of a deal have been running since April and it's becoming a bit like a Coronation Street saga.

Meanwhile, "anyone but Qantas" is the plea from National.

Transport spokesman John Key says a deal with Air New Zealand's only trans-Tasman competitor would see prices rise and services cuts.

Mr Key admits Air New Zealand needs a partner and says he would not have a problem if it was Singapore Airlines, Cathay Pacific or British Airways.

[Flat Side Up]

Now, let's see. It has been mentioned that QF has offered $500 million (AUD) for 25% of AIRNZ. The NZ Govt paid NZD $885 million for 82 % oF AIRNZ. That makes AIRNZ worth NZD$107.9 million; AUD$995 million 25% equals $AUD 238.8 million. Looks as If the Aussie Taxpayers will be called upon to drag QF out of the mire if they continue to splash money around when you consider that they plan to spend $25 billion in the next ten years!

[go_dj]

FSU
Your figures may be closer than anybody thinks, with the Kiwis
recalitrance towards QF on this deal, maybe Dixon should ring
Brett Godfrey and invite him and DJ with QF for a turkey shoot
in the land of the long white cloud and blow Air NZ out of the
water all together and split the spoils afterwards, sorry but
with their Kiwi b***s*** they deserve what they get, long
overdue.

[Buster Hyman]

Perhaps we are about to see the final act in this long running saga? At the very least, this is the result of narrow minded F-Wits that are to proud & nationalistic to listen to valid criticism of obviously stupid decisions. My airline is gone & ANZ has lost it's independance. Happy now Selwyn?:mad: :mad:

[reggiespotter]

Seems that few realise that the days of the gravy train are over. Not only that, small and geograhically spread markets such as Oz and NZ are really unable to sustain cut throat competition that comes with critical mass. The natives want air transport of world standard so if they want it, they have to pay for it. Bah to those do gooders who think dergulation and competition is the panacea. The late 1990s and the first two years of this century are showing us that it's not the anzwer: :confused:

[Wirraway]

Virgin Will Resist Air NZ/Qantas Deal
24/11/2002 09:53 AM
IRN

Cut price airline Virgin Blue is getting ready to scream blue murder, if a deal between Qantas and Air New Zealand goes ahead.

It's expected Air New Zealand will confirm tomorrow it's selling a 25 percent stake to rival Qantas.

Virgin Blue is preparing to ask the Commerce Commission to block the deal.

The airline's Head of Commercial David Huttner says the deal has no commercial benefit and will drive up ticket prices.
Cheap flights will be in jeopardy if Qantas buys into Air New Zealand.

He says the deal won't encourage competition and is simply a grab for money.

Mr Huttner says the travelling public and the tourism industry will end up paying for it.

He says there's no way Virgin will offer a trans-Tasman service if the deal goes ahead.

[rmm]

From airliners.net,

Air NZ Request Suspension
24/11/2002 06:54 PM
IRN

Air New Zealand has asked the Stock Exchange to suspend trading in its shares tomorrow morning.

It's the clearest sign yet that the company is ready to announce a deal's been done with Qantas.

The Stock Exchange says Air New Zealand expects the suspension of trade to last until about midday.

While the shares aren't trading, Air New Zealand will be meeting union leaders at an Auckland hotel, where a video link-up has been arranged with Australia.

Our newsroom understands that Qantas will take between 19.5 and 25 percent of Air New Zealand.

Any deal will have to go to Cabinet to be signed off, and will need the approval of Finance Minister Michael Cullen and the Overseas investment Commission.

The Commerce Commission says it understands an application relating to Air New Zealand is imminent.

[Kaptin M]

At the risk of boring you, by repeating myself, I believe that if the deal between QANTAS and Air New Zealand is consumated, it will NOT benefit the Oz & Kiwi customers.
Effectively it will add to QANTAS' monopolistic position as far as travel between the two countries are concerned, and will further stifle any real competition from our near Pacific neighbours, eg. Fiji, Vanuatu, New Caledonia, New Guinea, etc.

Is it preferable to see (for example) Singapore Airlines enter the fray and effectively control Air New Zealand?
Unfortunately, realistically there are NO other near neighbours who have the financial capability of joining up with Air N.Z., to give QANTAS any real competition.

Air N.Z. is desperately in need of a BIG injection of ca$h to allow them to re-equip with aircraft that will provide dependable service for the next decade. Their current fleet is now "maintenance intensive" and tired.
Although the population (of 3 million) is the same as that of Singapore, the domestic services have been responsible for sucking much more of the total airline revenue than SQ's (if one considers SQ's "domestic" services as SIN-KUL, SIN-CKG, and SIN-KCH).

In a nutshell, Air New Zealand has not been "smart" in promoting New Zealand as a DESTINATION on the overseas market.
That is a management/marketing shortcoming, that further feeds down to problems with subordinate staff.

Whether QANTAS can "energise" the existing New Zealand staff to the point where the airline turns a profit itself, will depend on the Kiwis already working there.

For QANTAS to put a "new broom" through Air N.Z. will no doubt create a knee-jerk, anti-Aussie reaction that will probably bring the airline to its knees.

IMHO, I believe that Air N.Z. needs an injection of funds from the New Zealand Government - so as to maintain their independence - and the introduction of a new management who are aware of where Air New Zealand MUST head, rather than seeing QANTAS enter.

But who knows what the trade-off was between Helen and Johnny, using the Ansett Factor as a bargaining tool!

[Buster Hyman]

Is there enough room left on the side of DJ's aircraft for another slogan???

[Wirraway]

Mon "The Australian" 25/11/02

Fels eyes Qantas-Air NZ link
By Steve Creedy, Aviation
November 25, 2002

THE $500 million Qantas proposal to buy up to 25 per cent of Air New Zealand was likely to be anti-competitive and would be subject to close public scrutiny over several months, Australia's consumer watchdog said yesterday.

Australian Competition and Consumer Commission chairman Allan Fels said the airlines would need commission authorisation to proceed with the deal, tipped to be announced this week and possibly as early as today.

"If a proposal is anti-competitive it can't proceed unless it can be shown to be of public benefit," Professor Fels said. "On the face of it, a Qantas Air New Zealand alliance would lessen competition."

Key stumbling blocks to any Qantas-Air NZ alliance are likely to include the airlines' dominance on Tasman and Pacific routes, particularly because of problems facing the other significant player on US routes, United Airlines.

But the ACCC will also take into account a price-fixing arrangement between British Airways and Qantas on European services due for renewal next July.

"We have to look at Qantas- Air New Zealand in the context of a full analysis of all factors bearing on competition in all the relevant markets – Australia, Australia-Europe, Australasia, the US and so on," Prof Fels said. "It just seems logical that there would be some effect from the Qantas-BA agreement."

Also being questioned is Air New Zealand's future in the Star Alliance, which also has a pricing application in with the ACCC. Air NZ faces stiff penalties if it leaves the alliance without giving two years' notice, but remaining with Star raises further competitive issues.

Air New Zealand on Friday denied an agreement had been reached, while Qantas said talks were continuing.
==========================================

Mon "Australian Financial Review" 25/11/02

Qantas's NZ deal moves to regulator end-play
Nov 25
Jane Boyle

Qantas and Air New Zealand this week will begin the tough task of convincing competition regulators of the merits of their proposed equity partnership, details of which will be unveiled today.

Qantas will spend nearly $NZ550million ($491 million) to acquire about 22.5 per cent of the NZ carrier. The deal involves an initial placement of new shares worth just under $NZ500 million, and a commitment to participate in a rights issue by Air NZ in the next three months.

It is understood that Air NZ plans to undertake a rights issue in the order of $NZ200 million around February, when it announces its interim results, which are expected to show continued improvements in profitability.

The rights issue will be underpinned by a NZ Government commitment to tip another $NZ150 million into the national carrier.

The NZ Government, which took 82 per cent of Air NZ last year after pumping in $NZ885 million to prevent collapse after Ansett's failure, is estimated as likely to emerge after the Qantas placement and rights issue with about 56 per cent of the NZ airline.

Qantas and Air NZ are expected to lodge a formal submission with the NZ Government on the proposed alliance, plus applications seeking authorisation from the Australian Competition and Consumer Commission and NZ Commerce Commission, possibly as early as today.

As part of the deal, Qantas will take two positions on the Air NZ board, while Air NZ will have one representative - tipped to be chairman John Palmer - on the Qantas board.

The deal has major strategic benefits for both airlines and is expected to deliver revenue and cost benefits of between $300million and $400million over the next few years, split between them.

The airlines will argue to the regulators that their alliance will benefit consumers by allowing the carriers to co-ordinate capacity, offering better and more frequent flight schedules. It will also enable them to pool resources to launch services on new international routes that they have previously not been able to operate profitably.

However, Virgin Blue is firmly opposed to the deal, and is preparing to lodge a formal submission to regulators as soon as it examines the details.

Virgin Blue's head of commercial operations, David Huttner, argued a Qantas-Air NZ tie-up would damage competition and the tourism industry.

Mr Huttner said Virgin Blue had planned to launch Tasman and domestic NZ flights, but would not do so until it knew the outcome of the Qantas-Air NZ deal.



Talk of an imminent deal prompted attacks by opponents on both sides of the Tasman.

Virgin Blue, which has indicated it would shelve plans to fly to New Zealand if the deal proceeds, said it had already spoken to regulators in both countries about the deal's anti-competitive potential.

[Airtart]

Without posting a whole new article the NZ Herald reports that the deal will be announced at 12 midday today -NZ Time.

[Empty field myopia]

22.5% of Air NZ has gone to the 'White Rat'.

Here we go again :(

[Wirraway]

Rivals turn mates in trans-Tasman deal
By Chris Janz and Kate Meikle
November 25, 2002

QANTAS and Air New Zealand will have joint control of each other's trans-Tasman and New Zealand domestic routes under a wide-ranging alliance announced this morning.

If the deal is approved, Qantas will take up to 22.5 per cent of its New Zealand rival.

Announcing the details in Auckland today, Air New Zealand chairman John Palmer said the deal would create a strong Australasian grouping to compete in the volatile aviation market.

"This decision is good news for the travelling public because it ensures a strong Air New Zealand can continue with a domestic and international network that is viable commercially and affordable for the consumer," he said.

The deal means an end to fierce rivalry between Qantas and Air New Zealand on the trans-Tasman route. A new group with joint representation from both airlines will manage the entire Air Zealand network and Qantas flights to, from and within New Zealand.

Air New Zealand will manage the combined operations.

Mr Palmer said retaining his airline's independence and autonomy was key to the agreement.

"There will be some that say Air New Zealand have sold out," he said.

"Nothing could be further from the truth. Both parties have given something and in return have gained many advantages that would simply not have been possible without such a strategic alliance."

The airlines will codeshare on all New Zealand domestic and trans-Tasman flights and on flights between New Zealand and the Americas.

Air New Zealand will codeshare on Qantas Australian domestic flights and Qantas international flights that connect with Air New Zealand flights.

"It would be wrong to think this is Qantas simply taking up a shareholding in Air New Zealand," Mr Palmer said.

"The negotiations recognised that we both faced similar problems and constraints and that together we have a much better chance of meeting our challenges respectfully."

The agreement will see one Air New Zealand director joining the Qantas board and two Qantas directors joining the Air New Zealand board.

Mr Palmer said any suggestion that Qantas would control the Air New Zealand board was "absolute nonsense."

"The board of Qantas concurs with the board of Air New Zealand that Air New Zealand must be controlled autonomously under the oversight and direction of its own board," he said.

It is not known what the arrangement will mean for frequent flyers. Air New Zealand is a member of the Star Alliance, while Qantas is part of oneworld with major shareholder British Airways.

The airlines downplayed concerns the deal would not benefit travellers, saying it would deliver significant benefits to the Australian and New Zealand economies.

"This will be much more value creating than putting valuable time and significant money into fighting off an extremely aggressive and challenging competitor in our home market," Mr Palmer said.

Earlier, budget airline Virgin Blue said the move would result in a virtual monopoly across the Tasman - with Qantas dictating the shots.

Head of commercial operations David Huttner said Virgin Blue had raised its concerns with competition regulators in both countries.

He said Virgin would have to rethink its plans to run a trans-Tasman service if the deal went ahead.

Qantas chairman Margaret Jackson said the Qantas board had unanimously approved the agreement and the investment in Air New Zealand, which would take place in three stages.

Ms Jackson said the board believed the strategic benefits to both airlines would ensure they played major roles in growing the economies of both countries.

Mr Dixon said the strategic partnership would assist both airlines to retain their independence in an industry facing considerable and continuing difficulties.

The alliance is subject to approval from the NZ Minister of Transport, Air NZ shareholders, the NZ Commerce Commission and the Australian Competition and Consumer Commission.

The deal is expected to take between six to nine months to gain approval from shareholders and regulatory bodies in Australia and New Zealand.

[Going Boeing]

I don't understand why so many K1W1's are aginst selling 25% of Air NZ to QF because with the lower labor costs in NZ it's obvious that Geoff Dixon will send a lot of the labour intensive jobs across the pond to NZ to the detriment of a lot of Australians. They must be blind and stupid to not want the sale to go ahead!!!!!

[Pimp Daddy]

The main concern that has been kicked up in the NZ media over this has been about fares increasing.

No-one seems to remember that Qantas previously held about 20% of Air NZ a while ago.

I can see some engineering stuff being sent across the Tasman.

[The Riddler]

Pascoe: Qantas and Air NZ ... time to get domestic
25 November 2002 9:00:00 AM

After a long courtship, it looks like Qantas and Air New Zealand are about to have another go at living together, but the relationship is not without problems.

For a start, it's the second time round for this couple — the first attempt ended badly with Qantas walking out in 1997 after being taken for granted by its Kiwi spouse. That was when Air New Zealand management had attitude — before it totally embarrassed itself and bankrupted the airline, requiring a bail-out by the New Zealand government.

Qantas felt Air New Zealand never listened to it the first time — it won't be getting back into bed unless it has a large say in how the household spends the money and where it goes on Saturday nights for fun. In short, Qantas will want something close to a 50 percent say for its 22.5 to 25 percent stake.

Presuming that the pair have satisfied themselves on that front, there's then a little matter of Kiwi national pride and the chup on the shoulder about Big Brother Australia. Politically, most nations link national pride and their flag carrier — something that can lead to irrational investment decisions.

What carrots the airlines might have to get over the Kiwi politics will be interesting. One NZ newspaper is suggesting Qantas will move some of its engineering work to NZ, thus saving some money on cheaper Kiwi workers and creating a few jobs on that side of the Tasman. But you can imagine how well that will go down with the local unions?

But moving along, if all the Kiwi angles are covered, there's still Allan Fels' ACCC to keep happy. Virgin Blue is already agitating about the Qantas/BA joint services agreement on the kangaroo route, saying it will oppose its renewal when it expires early next year.

Virgin Blue is being quoted this morning as saying it will review its plans to fly across the Tasman if the Qantas/Air New Zealand deal goes ahead, but I suspect New Zealand wasn't high on its list of targets anyway.

In any event, Qantas is unlikely to get anything like the BA joint services agreement ticked by the ACCC.

And then there are the "relos" — this would be a mixed defactoship, as Qantas is a One World member while Air New Zealand is a Star Alliance airline.

The Kiwi press is suggesting Singapore Airlines might buy BA's 17 percent stake in Qantas and the flying kangaroo would then move into the Star Alliance family and live happily ever after — but that sounds like more hope that the Kiwi tail might wag the Australian dog.

Indeed, it might be easier to keep the ACCC happy if the two airlines remained in different alliances, but that in turn would require a lack of pillow talk.

Thus it's easy to see why it's taken so long for these two to get to any sort of announcement stage — and it might yet prove to be less than easy to live together

[bentandtwisted]

So what will happen to them?

[Rich-Fine-Green]

It must be the weekend hangover but A$500 million for less than a quarter of Air NZ?!?!?!. :confused:

That seems to be far, far too much money for a company with old jets, a board that has a chip on it's shoulder and a balance sheet just in the black.

Also; Isn't the socialist NZ government still a majority shareholder?.

Where do you think their alliance will be if there is any 're-structuring'. The NZ worker or the NZ taxpayer?.

Can someone smarter than me post; - where QF are winning in this deal.

:confused:

[Flat Side Up]

RFG,
Hell!!! It is much worse than I thought!!!:eek:
You are quite right. AirNz is not worth that much. $550 million AUD for 22.5% is ridiculous for that outfit. As mentioned in another post the Aussie Taxpayer will be called upon to clear up the resulting mess if QF( don't forget Qf is the National flag carrier) keeps splashing money around like that. :mad: :mad: :mad: There is a saying that if you buy something from a kiwi you have paid too much and if you sell to one you got too little!

[Boeing Belly]

To quote a big, buck-toothed, hairy New Zealand beauty contest winner, they " bought a lemon". I think QF will rue the day that they got associated with that despicable mob over there. Now that QF own AirNZ, perhaps the NZ pilots will be happy to agree to the conditions that they wanted to impose on the Ansett pilots.

[ZK-NSJ]

and perhaps then boeing belly will finally pull his head out of his arse

[snail]

nice call NSJ
BB, QF doesn't own AIR NZ-22.5% is not even a controlling share!

[Rich-Fine-Green]

Is it not possible that the QF board are being overconfident?

QF have had a dream run and a lot of luck the last couple of years.

No doubt QF will stay profitable but It's hard to imagine that QF will repeat the same profit results in the future with an expanding Virgin Blue (& Virgin Pacific?) and recovering international competition.

Uncle Geoff may regret buying 22.5% of a Lemon when his share options come up.

[Boeing Belly]

Not even a controlling share........Pigs a**e. Dixon will be running this show. AirNZ have proven many times what f**k ups they make of everything.

[Pimp Daddy]

I'm still trying to see where you guys get the view Air NZ is a lemon.

It nearly went under due to poor decisions after buying Ansett and being unable to sustain the losses from Ansett or spend enough to make it profitable, and was then bailed out by the Govt. However the core airline appears to have always made money even thru the Ansett period and is still making money today.

Just because everyone, quite rightly, has the sh*ts with the previous Air NZ board (especially Selwyn Cushing) does not mean that the business isn't profitable going forward.

[ZK-NSJ]

hang on a tic, wheres me violin,

[Wirraway]

ABC News Online

Mon, Nov 25 2002 8:11 PM AEDT


Qantas-Air New Zealand deal under increased scrutiny

The proposed alliance between Air New Zealand and Qantas is coming under increasing scrutiny.

The Australian Competition and Consumer Commission (ACCC) says it will closely scrutinise the deal, while unions are worried about jobs and rival Virgin Blue says there is no benefit for travellers.

Both airlines say it will allow them to better compete in a tough aviation market.

But Virgin Blue's chief executive Brett Godfrey says it is anti-competitive and if it proceeds Virgin will postpone its plans to service New Zealand.

"New Zealand was very much in our forethoughts in terms of what we wanted to do but we also made it pretty clear we would not walk into a monopoly, he said.

"The Australian law says that if this lessons competition significantly or is not in the public interest, then it should not be allowed to go ahead.

"Now if it is deemed to be anti-competitive, then the next test is, it in fact in the public interest to let this go ahead.

"The only public interest served by this is the share holders. its definitely not in terms of the people who will be paying the tickets."

But Qantas chief executive Geoff Dixon says the alliance will be good for shareholders and customers.

"Just because you have, as someone said, a virtual monopoly does not mean that customers cannot benefit," he said.

Under the deal announced this morning, Qantas is to take a 22.5 per cent stake in Air New Zealand.

Air New Zealand was rescued from bankruptcy just over a year ago by the New Zealand Government, which was left holding more than 80 per cent of the airline.

Qantas says the new partnership will help both airlines retain their independence in an industry facing considerable and continuing difficulties and boost visitor numbers to each country by tens of thousands each year.

Qantas chief executive Geoff Dixon says the proposal will strengthen both airlines in a very tough global aviation market.

"Unless we are proactive and indeed creative in dealing with these pressures, both airlines I believe run the risk of being marginalised over time," he said.

While the chairman of Air New Zealand John Palmer has been quick to deny suggestions his airline is selling out.

"Both parties have given something and in return have gained many advantages that would simply not have been possible without such a strategic alliance."

The Federal Government says it has been assured no jobs will be lost to Australia if the deal goes ahead.

But Transport Minsiter John Anderson says the deal will have to demonstrate significant public benefit and not preclude other airlines from operating on the same routes before it is approved by the competition watchdog.

Mr Anderson says the Government supports any move that strengthens the aviation industry in the region.


Reservations

But the ACCC has reservations about the proposed alliance.

ACCC chairman Alan Fels has indicated he is not convinced the deal is a good thing.

"I think the parties, because the deal on the face of it reduces competition, will have to argue that there's substantial public benefit."

Virgin Blue is urging the ACCC to block the deal.

Meanwhile, the Australian Manufacturing Workers' Union is calling on Qantas to give an ironclad guarantee that jobs will be safe under the merger.

National Secretary Doug Cameron says he wants more than a verbal assurance about Australian jobs.

"We have had a terrible experience with Air New Zealand and Ansett," he said.

"We come very jaundiced to this merger after what Air New Zealand did with Ansett."

Ahead of the announcement, the commercial head at rival airline Virgin Blue, David Huttner, said his airline would be taking the issue up again with the Australian Competition and Consumer Commission (ACCC).

"We certainly don't see any consumer competition benefit by allowing such a deal to go ahead and we will be addressing it with the ACCC and their counterparts with New Zealand," Mr Huttner said.

The New Zealand market has been one of the possibilities considered by Virgin Blue.

"Because clearly the deal has no interest for the public - it's simply a good deal for the finance authorities in New Zealand, who bought into an airline that was nearly bankrupt and now is quite healthy," Mr Huttner said.

"And if they're healthy, why do they need to do the deal?"

[Boeing Belly]

KM/KW = 1 KC = AFKOTD!!!!

[Richard Kranium]

I just hope that the Air Garbage cancer does not descend on QF...but then VirginSpiv are now mouthing off about what may not be fair.....to whom may I ask...............QF and VirginSpiv are becoming of the same ilk...may they live in interesting times...................................:confused:

[Pimp Daddy]

Um - Mr Kranium (empty I presume) - it wasn't that Air NZ was a cancer, it was that they stupidly bought a tumour and then couldn't afford the cure.

[Wirraway]

"This is effectively going to be one airline. Qantas wants to turn Air New Zealand into a regional branch office. They're not paying out $500 million to sit at the board table and take morning tea. They're coming in to run the place."


Tues "The Australian" 26/11/02

Qantas and Air NZ to join
By Steve Creedy, Andrew Fraser
and Luke McIlveen
November 26, 2002

BUDGET carrier Virgin Blue says it will walk away from the New Zealand market if the planned $NZ550 million ($491 million) alliance between Qantas and Air New Zealand is allowed to proceed.

Qantas has agreed to buy a 22.5 per cent stake in Air New Zealand and form a joint operation across the Tasman and in New Zealand managed by the Kiwi carrier.

The airlines would codeshare on flights to the US and within Australia as part of a five-year agreement that is expected to produce savings of up to $NZ450 million.

The combined group would represent about 4 per cent of global airline capacity, with Qantas flying 197 aircraft to 32 countries and Air New Zealand operating 83 planes to 15 countries.

In New Zealand, the deal has sparked a backlash from parliamentarians, business leaders and travel agents but Prime Minister Helen Clark is expected to push the deal through with a cabinet vote.

Even Miss Clark's coalition partners in the United Future party are upset over the deal.

United Future leader Peter Dunne said Qantas had spent the past 60 years trying to "marginalise and dominate" Air New Zealand. "This is the achievement of Qantas's 60-year campaign to gut its New Zealand rival."

Opposition leader Bill English called the plan "Australia's biggest win over New Zealand", warning domestic and trans-Tasman airfares would rise, hurting tourism and export business.

"This is effectively going to be one airline. Qantas wants to turn Air New Zealand into a regional branch office. They're not paying out $500 million to sit at the board table and take morning tea. They're coming in to run the place."

Virgin chief executive Brett Godfrey called on the Australian Competition and Consumer Commission to block the deal.

The commission is concerned the Qantas-Air New Zealand alliance would tie up 63 per cent of flights to the US from the South Pacific and dominate the Tasman and New Zealand. The nearest rival, United Airlines, holds a 23 per cent share of the market.

ACCC chairman Allan Fels said: "The proposal immediately raises concerns for the ACCC.

"Today's announcement appears to include strong elements of anti-competitive arrangements including price-fixing and route-sharing."

Transport Minister John Anderson said yesterday he supported any move to strengthen the aviation industry. But he said the proposal would need to demonstrate significant public benefit and not lead to anti-competitive behaviour or stop other airlines from operating on the same routes.

The ACCC will not reach a decision on the proposal for at least six months.

Qantas and Air New Zealand say the deal has strategic benefits to both airlines.

Qantas chief executive Geoff Dixon said he expected the deal to result in job growth in Australia and said it would not raise prices. He said Qantas would "get on with our life" if the alliance were rejected.

"But we don't think it should be," he said. "If people want a strong trans-Tasman and regional airline grouping, I think they'd be very well advised to have a good look at this because the industry's changing dramatically around the world."

Labor's transport spokesman, Martin Ferguson, said Qantas and Air New Zealand had to guarantee the alliance would not result in a loss of jobs or passenger services.

The New Zealand Government has said it would not interfere with an investigation by the New Zealand Commerce Commission.

[Rich-Fine-Green]

What happens in the mean time?.

Is the deal in limbo until the respective consumer commissions can scrutinise the deal?.

I can't imagine QF & AIR NZ consumating the marriage and then being told to change six months later.