View Full Version : Qantas DOES buy 1/4 of ANZ!!

Al E. Vator
25th Nov 2002, 00:51
Dixon has just paid HALF A BILLION dollars for something that nearly went down the drain recently!

If these executives are as clever as they wish us to believe (hence their large bonuses and salaries), WHY did Qantas sell the shareholding it had in Air New Zealand in the first place???

Qantas sees big savings with Air NZ - The Financial Review
Nov 25 10:45
Jane Boyle and Giles Parkinson

Qantas and Air New Zealand this week will soon begin the tough task of convincing competition regulators of the merits of their proposed equity partnership after unveiling details of the deal on Monday.

The two airlines, which began negotiations 12 months ago, said Qantas would spend nearly $NZ550million ($491 million) to acquire a cornerstone holding of 22.5 per cent of the NZ carrier.

The deal involves Qantas buying shares in three stages - an initial convertible notes issue, an issue of shares taking its stake to 14.99 per cent, and a further 7.5 per cent stake to be bought at Qantas' discretion over the next three years.

Air NZ said it may also raise a further $NZ200 million in a rights issue, but any decision on this is expected to come after the airline's interim results are announced in February.

The NZ Government, which took 82 per cent of Air NZ last year after pumping in $NZ885 million to prevent its collapse after Ansett's failure, is likely to be left with a 56 per cent stake after the Qantas investment and rights issue.

The two companies estimate that the deal will deliver revenue and cost benefits of between $NZ450 million by year three and would be earnings per share accretive from 2003/04 onwards. Qantas shares were up 8 at $4.01 in early trade on Monday.

"This alliance will allow both airlines to compete more effectively in an increasingly tough global aviation market," Qantas chief executive Geoff Dixon said.

"Qantas and Air New Zealand together make up less than four per cent of the world aviation market and neither airline can ignore the forces of globalisation and consolidation that charaterise this complex and demanding industry," he said.



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 soon.

The airlines will argue the 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.

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 two companies will also form a group made up of an equal number of representative from each airline that will coordinate the entire air NZ fleet and Qantas flights to and within New Zealand.

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.


bitter balance
25th Nov 2002, 01:34
Al, I think QF made a significant profit out of its initial selling of AirNZ shares. Through luck or excellent management it has fallen into their laps quite nicely.

25th Nov 2002, 01:38
QF now have a job for TJ's managerial expertise.

The integration of the two pilot groups! And again, it is only fair, that AirNZ pilots have equal access to any QF expansion,even if outside NZ.

And synergies, I love that word when bandied about by experts like TJ.


Freedom Air sold to Patricks.

Morale problems at AirNZ due to a booming Qantas/Australian but an AirNZ that is further rationalised.

25th Nov 2002, 01:44
That purchase now values TE at NZ$ 2.444 Billion.

When the Kiwi Government pumped in NZ$885 million for 82% equity, TE was obviously worth NZ$1.079 Billion.

Nice capital gain for the Kiwi Government!

25th Nov 2002, 01:46
There was only ever talk of one pilot group and "Expansion Sharing" when Air Shepard took over 100%. Qantas is buying 22 1/2%, so it's hardley a takeover.

I guess this does not look good for the Qantas NZ domestic situation. I guess it kept the guys paid (though not much!!) and current for a while.

Best of luck to all involved.

25th Nov 2002, 03:02
Throwing good money after bad. Perhaps the Kiwi government, now having made a significant profit by forcing the demise of Ansett, could now cough up a bit to the AN staff they $crewed so well.

Richard Kranium
25th Nov 2002, 12:26
Why is it that Dixon can throw $500 bill at air garbage but could not pick up Ansett for $1:00..."thats one dollar"..................Dixon was Marketing Manager with Ansett and left on bad terms..........oh but that would have no reflection on things............would it............:( :( :(

Dan Kelly
25th Nov 2002, 13:07
From the first post on this thread, AUD$500 Million is the figure.

The AUD$1.00 offer to buy Ansett brought with it AUD$2 billion of debt plus who knows how much to restructure.

That's a possible reason why Dixon can justify 500 mil for ANZ but nothing for AN.

Buster Hyman
25th Nov 2002, 14:27
Very true Dan, but how much will he still need to kick in for ANZ's fleet renewal?

Perhaps, now with a profitable co-owner, AN staff can mount a civil claim for damages against their former owners?;)

Hap Hazard
25th Nov 2002, 15:01
:rolleyes:Does this mean that the NZ domestic is not going to see any real open compition in the future then, with the 2 carriers now sleeping in the same bed?
Will this mean ANZ pulling out of Star Alliance?
By the by, wonder how long it will be before this thread turns into a AN/ANZ slagging match?
Best of luck to both carriers and its staff.

25th Nov 2002, 19:17
QF to aquire 22.5%

The people's democratic republic of NZ (capital Helensgrad): 82% down to 56%

Doesn't SQ still own a good part of the 'other' 18%?.

Correct me if I'm wrong. :cool:

Would make an interesting board room mix though;

QF Capitalism, NZ government Socialism & SQ (government influenced) Facism.

25th Nov 2002, 21:09
I think the further we stay away from the AN issue the better.

Brief summary: NZ Herald 26 NOV 02.
Key points...

* Qantas buys 22.5 per cent of Air New Zealand for $550 million in three stages.

* Government's 82 per cent shareholding in Air NZ (bought from last year's $850 million taxpayer bailout) diluted to 64 per cent.

* Qantas appoints two members to Air NZ board. One Air NZ member joins Qantas board.

* New group with equal representation from the two airlines co-ordinates entire Air NZ network and Qantas flights to, from and within NZ.

* Air NZ manages all Qantas and Air NZ transtasman and New Zealand domestic services, including pricing and scheduling.

* Air NZ and Qantas retain own brands but codeshare on routes in New Zealand, Australia, across the Tasman, and to and from North America.

* Air NZ retains airpoints programme. Applies to Qantas services in time.

* Air NZ estimates deal worth $1 billion to NZ economy over five years.

* No job cuts but 200 more engineering jobs, mainly in Christchurch.

* Deal faces tough regulatory hurdles.

25th Nov 2002, 21:43

How convenient your first line!

If AirNZ could survive without Qantas, your silly little parochial nation would pursue that path.

With a massive recapitalisation required, this is AirNZs only chance. Clarke knows it wouldn't survive in a real world, with competition at both ends from Qantas and Virgin.

I will watch with interest to see how Dixon manages what will become a Dog. The antiQantas groundswell, stimulated by parochial politicians( there is an anti-QF website), will promote convenient poor workpractices. Any problems AirNZ faces, any challenges conveniently avoided, the finger can now be pointed at QF.

The evasion of responsibility, a Kiwi pastime.

Kaptin M
25th Nov 2002, 21:56
"No job cuts but 200 more engineering jobs, mainly in Christchurch."
IMHO, that SHOULD read, "no job cuts in engineering for Air N.Z. staff." My guess is that will probably be a re-location for some of the AKL based maintenance staff (to CHC), and the transfer of considerably more jobs from the Main Island to the South Island, by QANTAS.

"Air NZ and Qantas retain own brands but codeshare on routes in New Zealand, Australia, across the Tasman..".
Read, "a reduction in the overall frequency of services". Whereas QF and TE currently COMPETE for pax, across the Ditch, they will now ensure that with LESS services, ALL flights are filled to capacity.

"And if you don't like our service - TOUGH! You can always swim."

"Missed your flight? It appears we have a spare seat in about 2 months, if you are prepared to pay our Premium fare."

"Air NZ manages all Qantas and Air NZ trans-Tasman and New Zealand domestic services, including pricing and scheduling. "
Air New Zealand have ALWAYS been the more expensive of the two, when travelling Oz-N.Z. As is the case with most airlines, tickets are cheaper when purchased in the operating airline's country of origin, therefore this will mean that either:
(a)Australians end up paying MORE than Kiwis for the same flights, in the same seat, on the same aircraft, or,
(b)Kiwis will have to pay MORE than they currently do (because of the difference between the AUD vs NZD.
In addition, Air New Zealand's scheduling (which is often 737's as opposed to QF's 767's) is SHOCKING, flights departing either VERY EARLY morning (eg, 0630 CHC-BNE...meaning a 0430 check in!!), or arriving VERY LATE - after midnight.

It doesn't matter HOW you look at it, services between the main cities in Australia and N.Z. are going to be operated under a MONOPOLISTIC situation!!

Although the deal is going to ensure Air New Zealand's survival, and the strengthening of QANTAS, there WILL be some "rationalising" (a reduction in frequencies of service, and the inevitable future loss of jobs), it is going to cost Australians and Kiwis MORE - for less.

25th Nov 2002, 22:41
Now where will all this leave origin and freedom? Will origin move into the big league (as far as NZ is concerned) and start running some jets up and down the country?

Boeing Belly
25th Nov 2002, 23:52
CT7...The opening line of your post is exactly why AirNZ and everything to do with it will be despised over here for all time. Yours is a country of despicable cowards. I truly hope the ACCC does indeed not allow this deal to go through and condenms AirNZ to the oblivion that such a putrid company with serious moral, ethical and safety issues deserves.:mad: :mad: :mad:

Delta Whiskey
26th Nov 2002, 00:59
Boeing Belly

You poor sad bitter [email protected]#$%tards - get over it - anyone who has a memory more than 10 yrears long knows that the entire AN thing goes back to Paul Keating and the Aussie government, who, on the instructions of QF, renegged on the open skies deal - end of argument.

When QF last had a hand in ANZ they forced the sale of the FK27s with a bunch of ANZ pilots going down the drain, closely followed by Safeair being closed with the same result.

Now the red arsed vulture is poised to do it all again - we don't need them, we don't want them and I hope the commerce regulators realise what a crock this deal will be for the travelling public on both sides of the ditch.

Kaptin M - nice post - sums things up well though I disagree with the scheduling comments - as an ATCO I know when QF launches out of NZ for OZ in the morning and there's nothing to choose betwen them and ANZ - the times are shitty for all of them - if you want a lie in and are feeling brave fly on one of the asian carriers!!

26th Nov 2002, 01:09

Tired of seeing you sorry ass Kiwis throwing that in our faces continuously.

AIRNZ was in no position to capitalise on the open skies agreement. You had a fleet of clapped out 200 series 737s. You did not have the expertise to operate in Australian domestically either! That has been coldly proven since with Ansett.

What you wanted to do was run your 767s between Sydney, Melbourne and Brisbane in an ad hoc arrangement. Not in the spirit of the open skies agreement and a far cry from you being a third competitor against the then incumbents.

AirNZ is gone without Qantas. With expensive recapitalisation you will be cut off at the knees by Virgin Blue and decapitated by Qantas if you go it alone. Even your socialist government knows this.

More jobs for Aussie pilots either way.

26th Nov 2002, 02:12
I find it very hard to believe that Dixon would allow the shepherds to manage all trans-Tas ops. That's amazing.That is also more bad news for Qantas pilots as services will be cut and flown by the velcro glove clan. Where does Australian Airlines fit in with this? Could it come into play later? I see Alan Fels(Geoff's best mate) wont retire for long enough to hopefully stop this one. Anyone who believes this is good for competition must work in management. The AN saga,operations wise at least, should demonstrate that the antiquated methods used by the Kiwis will fail dismally against Virgin when they start. I cant help but see this as a good thing for Virgin. I think the best thing would be to use the example of the three way struggle that we had in Australia which brought AN down and Geoff should use his muscle to bring AirNZ down and then deal with Virgin from an even stronger position. I cant see the Kiwi government putting any more cash in and if QF drove them to the wall Geoff might be lucky and get another 1$ offer for the lot!

26th Nov 2002, 06:51
Delta Whiskey
......I hope the commerce regulators realise what a crock this deal will be for the travelling public on both sides of the ditch.
I don't think you have a worry in the world about that. The concept of this proposal is a 90% market share and little, if any, competition for QF and Air NZ across the Tasman. The travelling public WILL suffer and you can forget about Virgin or any other operator trying to compete once those two are entrenched.

If this deal goes through, it will confirm that the ACCC is just a political whore to big business and Government spin doctors !

26th Nov 2002, 10:31
The really sad thing is that if the NZ Gov had allowed Singapore to increase their stake in Air New Zealand we would have had two strong international airlines now competing against each other. Instead we now look foward to a QF/Air New Zealand duopoly with no real competition, little growth and certainly no major growth in employment opportunies for ppuners.
Oh well I guess the NZ Government was desperate for somone white to bail out the stupidity of the past

26th Nov 2002, 11:17

Qantas will corral ANZ the same way it has corraled Air Pacific (of which it owns in excess of 22 1/2%). It will allow the local carrier to do what it does best whilst it uses itself as the major feed source.

What does this mean for pilots?

Expect QF pilots to see the international - long haul benefits of the deal.

Expect ANZ pilots to see the domestic / Pacific island nation (read 737) benefits of the deal.

NZALPA have no claim whatsoever to the benefits of this arrangement and therefore should pull their heads in before they are collectively shot off. They should remain grateful for theirs and their members continued survival and forever regret their previously greedy claims to unnaturally covet what did not belong to them.

26th Nov 2002, 18:22

* No job cuts but 200 more engineering jobs, mainly in Christchurch.

I guess by that you mean NO job cuts in NZ. :rolleyes:

Unless my maths is degrading in line with my increased beer consumption - I take this to mean a migration of jobs to NZ.

There is no way that this kind of deal will create jobs overall.

Does this mean a loss of jobs at QF maint. bases in Melb. & Sy. as the red tailed bandit schedules work in Christchurch??.

26th Nov 2002, 22:17
So what happens in NZ domesticly? Origin Pacific are feeding to QF (NZ) whilst Eagle, Air nelson and Mount Cook feed to the ANZ system. Now that QF and ANZ are getting a little cosy does this mean that the feeders all go under one banner or continue competing against each other?

Barbers Pole
27th Nov 2002, 02:29
Well ANZ's engineering hourly cost is $90hr and QF's is $140 hr so of cause we'll be doing more of QF engineering work, simple economics boys.

Plans are already underway to build another hanger for all the extra QF and contract work. Plus 200 hunderd extra spanner lads for CHC and they have been hiring flat out for the AKL engineering base as well.

As for fleet replacement, well we have 15 A320's coming with another 20 options at an incredibly low cost deal. 100 new pilots in the next 18 months.

The new domestic express service (low cost fares) is going mad with huge loads everywhere.

As for the Tasman, We are the cheaper operator cost wise(equals more profit= QF getting more $ from the profit share arrangement we have made) so it makes sense we'll be doing more of the flights, especially as we are going to be controlling all the scheduling for the tasman, in exchange for not setting up in Aust. domestically (like we would)

It'll be a win win deal, we get QF off our back and expand, Dixon gets to wave a big stick at your high cost structure and get out of losing 80mil a year operating here domestically.

27th Nov 2002, 02:55
A win win deal :rolleyes: How often do we hear that and how often is it true?

27th Nov 2002, 03:11
If ANZ will control the Tasman, who will control the Pacific??? Will QF drop their AKL-LAX flight, and go nonstop BNE-LAX???


27th Nov 2002, 03:15

No job cuts but 200 more engineering jobs, mainly in Christchurch
Hey not my words. Read the reference...

Although I thought I suggested we leave that dead duck AN alone.

Pimp Daddy
27th Nov 2002, 03:35
A win win deal How often do we hear that and how often is it true?

Not often, although I would say it is closer to fact than when young Lachlan Murdoch uttered those words.

27th Nov 2002, 04:45
Barbers Pole

You sound like a New Zealand shearer.

I think your disjointed pilot group will be outmanoeuvred by the Qantas pilots' association.

I here TJ will be down your way soon. His expertise with the Air NZ pilots in another life, well recognised by your new bosses.

Kaptin M
27th Nov 2002, 05:20
I`d be a little careful with the gloating, B.P.!

"As for fleet replacement, well we have 15 A320's coming with another 20 options at an incredibly low cost deal. 100 new pilots in the next 18 months.
Hmmm, anyone know where we might find some A320-endorsed pilots?
And some out-of-work LAME`s, rated B76, B73, and A320, who would probably consider moving to CHC?

After all, most Aussies see Air New Zealand as having some sort of MORAL obligation to ex-AN employees!! :)

You MIGHT just be correct with your "win-win" statement!

27th Nov 2002, 05:51
Well ANZ's engineering hourly cost is $90hr and QF's is $140 hr so of cause we'll be doing more of QF engineering work, simple economics boys.

The AN aircraft that went to NZ for maintenance often came back with numerous open defects. I'm hearing the same from friends at QF & DJ.

DJ are currently training AAES (Ansett engineering) LAME's on the 737NG for overflow work rather than send it to NZ. QF sent a high level delegation down from SYD to look at having 737/767 maintenance carried out at AAES. 6 months ago they didn't want to touch us because of the administration. Something made them change their mind.

I have no doubt that some work will stray across the tasman to sweeten the deal but bean counters only seem to look at short term gains and not the long term pain. It would certainly be interesting to see a 12 month reliability study between a product overhauled in Oz vs NZ.

simple economics boys - You get what you pay for.

27th Nov 2002, 06:39

Well said - as usual!


If AAES expands as hoped, you won't see too many AN LAMEs going to CHC. Rotating Shift work at AKL only offered $50K Sheep dollars

27th Nov 2002, 08:15
well well, once again the handbags are going like the clappers,
maybe the mod's should ban these sort of threads, my book of insults is running dry.

Pimp Daddy
27th Nov 2002, 08:40
Rotating Shift work at AKL only offered $50K Sheep dollars

That sounds right for an AME, certainly about what I got over there.

If they offered it for a LAME then I guess they saw you coming.

27th Nov 2002, 08:54
B.P. Gloating is a pretty typical response from a Kiwi when it comes to anything Australian.
I can confirm that the 73's that came back from Kiwi were pretty ordinary. I think a restructured AN engineering will give you lot a real run for the money. I also expect the AIPA will get pretty active because this affects their real baby-long haul. If it affected short haul they wouldnt give a toss(as usual).If you get to control the Tasman then the quid pro quo would be QF controlling the pacific!I'd like to see that. Did I mention the EBA period commencing soon for QF pilots .:eek:

27th Nov 2002, 09:56
Barbers Pole AirNZ had a cheap deal with A320's 24 of them in fact with Ansett but sadly it was like the local pre school canteen fund trying to digest Woolworths:(

Kaptin M
27th Nov 2002, 12:36
Shares in both companies - Air N.Z., and QANTAS - have dropped again, following an initial increase.

Whilst APPEARING to be good for both companies, inasmuch as it will strengthen both, there are bound to be staff cuts (as with all mergers), and in this case lead to a monopoly - certainly trans-Tasman - and very likely in the Australia-Pacific region - which is NOT in the interests of the Australian, Kiwi, or any other travellers of that area.

WIN/WIN for upper management, and LOSE/LOSE/LOSE for EVERYONE ELSE!

Perhaps a 10% interest in ANZ by QF, but no code-sharing/rationalisation of trans-Tasman flights.
Any Oz domestic flights operated by Air N.Z. should be INSTEAD of QANTAS - not in ADDITION TO (to stop V.B., or any other domestic operator being wiped out.)

27th Nov 2002, 22:58

So precious you!

There is an anti-QF/Australian groundswell in NZ at the moment. Politicians, websites etc etc. All because of little man nationalism.

You are upset because a few PPruners vent their spleen, their anti-AirNZ sentiments borne of losing jobs.

The QF lifeline is a win-win for Air NZ. Another opportunity to bludge, yes, but the alternative is not pretty.

$10 promo airfares across the Tasman from Virgin Blue and a super strong Qantas. AirNZ recapitalisation beyond your economic means and political will. Death by a thousand cuts as your inept management would attemp to restructure(low cost model), no doubt always a step behind the big boys at play.

Go it alone and ther will be thousands of job losses and an uncertain future. Bludge off Qantas, get on all fours and accept a few job losses. Helen Clarke knows this the prettiest alternative.

There should be no job losses on our side of the Tasman. That would not be right considering.

Barbers Pole
28th Nov 2002, 21:22
Geez, no wonder a lot of people can't be bothered posting on this forum!

The trade off agreed for the Tasman is that ANZ wont operate domestically in aust or fly from aust to any of the asian destinations in the future, I'd say that suits us fine.

Kaptain M, we already have guys in Turlose doing type ratings and then going to get some time on type at a friendly airline, our sim is due here early next year and your suggestion that ex An guys will be hired to fly our 320's is laughable. :rolleyes:

As for TJ coming back here, well thats even a bigger joke, I know the QF pilots would love to see the back of him (I hope it happens) but anyone who had anything to do with the An debacle in ANZ has been sacked by our new CEO.

You lot should remember that it wasn't us who wanted this deal, it was Dixon who's been after it for the last 18mths, I'd stop worrying/slagging us and look at whats happening a little closer to home. ;)

29th Nov 2002, 07:10
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.

29th Nov 2002, 09:16
Poor old Ansett.

What hope of surviving in any form did it have when the Australian transport minister and Deputy Prime minister is so 'PRO' Qantas. And this from a Liberal government, hate to see what Labour would have done.........


Hap Hazard
29th Nov 2002, 19:44
;) Hey did any of you guys see the footie last week?
This AN/ANZ stuff gets boring when it invades any remotely interesting down-under thread........move on!

29th Nov 2002, 21:10
Hap Hazard......YOU TWIT
What sort or 'real' bloke spells FOOTY with an 'ie' at the end. Maybe you wear a skirt..........Who knows.
Long john was merely stating the obvious. The Minister for Qantas 'Anderson' and his little sidekick 'Johnny' screwed every AN worker with complete disregard for over 14000 hard working Australians. Just look the situation now with workers STILL owed half of their entitlements. The AN ticket levy is still in place and the Liberal government are lining up as the No 1 creditor. While many haven't 'moved on' as you so bluntly put it, they are in financial crisis, struggling to feed their families and pay bills. The Minister for QF continues to gloat about what he has helped create with his mate DICKO. Have some empathy and open your mind to what 'REALLY' occurred as it's all now bloody obvious. Unless you have shares in, or work for QF, the deal is a BIG loser for the travelling public.

Selandia Baru
29th Nov 2002, 21:38
So what happens in NZ domesticly? Origin Pacific are feeding to QF (NZ) whilst Eagle, Air nelson and Mount Cook feed to the ANZ system. Now that QF and ANZ are getting a little cosy does this mean that the feeders all go under one banner or continue competing against each other?
Well this is a rumour board Qantas in NZ will cease to exist which means jet connect are history (more unemployed aussies heading your way). ANZ has NZ to itself along with it's loyal feeders Eagle, Mt Cook and Air Nelson and will probably do a fine job though the prices might creep up. Maybe a few smart little 50 seat jets in the rumour mill there as well. Those that are hanging off the QF hind tit (Origin) will diminish in size to become the token "third level" domestic competition that NZ has had in the past. Freedom Air is now a very redundant stopper of trans-tasman competition that will either be flicked on to a willing purchaser or slowly dissolved into the ANZ system and just disappear. More than likely the latter.

29th Nov 2002, 21:41

Air NZ was nationalised, not rationalised!

But believe me, rationalisation will come, it has to considering the competition and pressures the future will present.

How will NZ compete with the following ?

Singapore Airlines on the Sydney-LA route? Virgin Blue trans Tasman? More QF fun and games?

The usual Kiwi parochialism may bite you too. Your so called expansion is, by your admission, Australian based. Not only will you be competing against Virgin and Australian in this market, but your anti-Australian/QF antics will only make flying with Air NZ out of Australia more unsavoury.

Agree TJ is a hot potato, but he will come your way.

Kaptin M
29th Nov 2002, 21:54
The trade off agreed for the Tasman is that ANZ wont operate domestically in aust or fly from aust to any of the asian destinations in the future, I'd say that suits us fine.
What "trade-off are you talking about, Barbers Pole ?

"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.

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.

Anyway - in the interest of the Australian and New Zealand travelling public - personally I hope that this deal does NOT go ahead!

Mr Palmer, Chairman of Air Sheep, summed it up quite succinctly with his statement, "The deal means an end to fierce rivalry between Qantas and Air New Zealand on the trans-Tasman route."
A MONOPOLY no less, where travellers between the Main Island and the North/South Islands will be held to ransom by QF-TE.

A lobby group (led by Buster & Co) might be a good start!

29th Nov 2002, 22:35
I don't know what all the huffing and puffing is about. This deal will never get passed the fair trade / competition legislators, in it's present form, so the QF/Air NZ "union" is all speculation.

The Collingwood vs Brisbane Lions Grand Final replay was great wasn't it? I had another look at it last night seeing the cricket is so boring! Keep the faith Gnadenberg ,it's our flag next year!

Far Canard
30th Nov 2002, 00:38
New Zealand is too small for a second airline. The people running QF and ANZ know this. What they have proposed is what should have happened years ago.

The world is full of idiot carriers losing money on sectors just for market share. The NZ domestic market and the Tasman are very lean pickings. QF can put its resources where there is a better return on investment.

Things work out better in the long run if people put aside their differences and get on with what's required.

:) :D :cool:

30th Nov 2002, 04:46

How easy it is to disagree with a Pies supporter. Woewodin, well done, though Malthouse needs to crush his pretty boy image. On premierships, don't be so greedy, 1990 not so long ago. Spare a thought for a few beleaguered Victorian clubs, who haven't seen a premiership since near the end of the war.

Disagree with your view on the union. A desperate NZ government. After nationalising AirNZ, they will not be able to recapitalise it. The Minister for QF has shown his hand too. The political pull will be mighty!

And Patricks. They are well placed to capitalise on the above. Mr Howard will approach Mr Corrigan with " Have we got a deal for you". And that it will be. I think Virgin Blue stands to gain quite nicely.

Enjoy your NZ overnights Whiskerey!

30th Nov 2002, 04:55
Sat "New Zealand Herald" 30/11/02

Qantas and Air NZ: The odd couple

If they made a film of the relationship between Qantas and Air New Zealand, who would get the starring roles? Probably a pairing like Spencer Tracy and Katharine Hepburn.

Old-movie fans will remember that the first sign those two were meant for each other was when they started scrapping like cats and dogs.

Whether Air NZ and Qantas will live happily ever after remains to be seen. But they've certainly done the scrapping-like-cats-and-dogs bit.

All three areas of business put into the alliance announced this week - New Zealand domestic, Auckland-Los Angeles and transtasman - have been the subject of bitter and often destructive competition on both sides.

New Zealanders, as the proud parents of Air NZ, tend to see the deal as their airline being forced into the embrace of the ugly Aussie.

There is some truth to that. Qantas and Australia Inc played a big part in Air NZ's Ansett debacle, and they certainly chased away the airline's other possible suitor in Singapore Airlines.

But Qantas, for all its deeper pockets, has not come out of the bickering unscathed. That is demonstrated by the fact that Air NZ's domestic services are the only part of the new alliance which really make money.

Air NZ chief executive Ralph Norris acknowledges that last year the airline lost just under $80 million on its transtasman routes, and $150 million on the rest of its international operations.

Only the domestic service, the engineering business and the ground handling and general services provided to other airlines kept it in profit. That is fairly much how it has been for most of Air NZ's life.

Qantas chief executive Geoff Dixon is a bit more circumspect about financial details, although he acknowledges losing money in New Zealand.

But the travel industry reckons that Qantas has done just as badly as Air NZ on the transtasman and Auckland-Los Angeles routes, and will have dropped a pile of money on its foray into New Zealand.

Norris smilingly agrees. "We've got our estimates of what they're losing and I wouldn't want to be losing that amount of money."

The reasons for those losses are not hard to find.

Worldwide, the aviation industry lost about $20 billion last year, as airlines with too many planes desperately chased a declining number of passengers.

Locally, that has been exacerbated by the tit-for-tat competition between Air NZ and Qantas - Qantas enters the New Zealand domestic market with a full-service airline offering cut-price fares; Air NZ steps up the activities of its low-cost transtasman subsidiary Freedom; Qantas puts more capacity on transtasman routes and slashes fares; Air NZ puts more capacity on the Los Angeles route and discounts fares ...

Each move has succeeded in reducing both airlines' profits.

Small wonder that Qantas and Air NZ can see more benefit in working together than in continuing to cut each other's throat.

Under the proposed arrangement, instead of going head to head on most services, and cutting prices to below cost in order to fill seats, Air NZ will manage prices, scheduling and marketing for both airlines.

One fairly painless result, from a consumer viewpoint, would be a wider range of services.

Both airlines have been reluctant to look at new routes or even extra time slots on existing routes because of the knowledge that the other would immediately match it and make the service uneconomic.

But, working together, they would be able to reorganise timetables so that instead of, say, both airlines flying from Auckland to Sydney around 6am there could be one flight at 6am and another at 11am.

The alliance should find it easier to develop new routes from New Zealand, knowing it is unlikely to face head-to-head competition.

There are also plans to considerably upgrade the airfreight business.

The airlines have agreed on the rules as to which of them will operate any new services.

It boils down to which airline can do the job at the lowest cost - a formula which could be expected to favour the leaner Air NZ operation - and which of the two brands is preferred by potential customers.

Setting fares is an altogether trickier issue.

Norris, who would preside over the new alliance, is adamant that the basic fare structure for Air NZ's Express domestic service would not be affected - subject to changes in fuel prices or exchange rates.

But what about those uneconomic Qantas fares in New Zealand?

Norris says that would be a matter of asking, "Okay, what is the cost of providing this service and what is the margin that is needed to cover the aircraft charge and to procure a return on the capital?"

Does that imply Qantas fares are likely to rise? "Well," replies Norris, "I suppose that's a conclusion you could draw ... "

No one would be greatly surprised if Qantas pulled out of the New Zealand domestic scene, since it would no longer have any reason to stay here. That would solve the problem for the alliance, if not for the travelling public.

What about any other uneconomically low fares the airlines may have got into as a result of their battle? Would they be reviewed too?

"Absolutely," says Norris, who makes no secret of his view that "international airfares are too cheap".

But if that sounds worrying for passengers, there are two bits of good news. Freedom's low-cost transtasman flights are making money so its future seems secure (unless the competition authorities require it to be sold).

And, Norris says, "We are working on a new product for the Tasman and the aim of that is to allow us to realistically provide lower fares on a more sustainable basis."

The overriding aim in all this is to get Air NZ making solid profits because, he says, that is the only way to secure the airline's future.

Norris, a newcomer to aviation after a successful career in banking, is perhaps more aware than industry insiders of how unstable global aviation is.

"If you look at motor manufacturing, the six largest makes control 80 per cent of the output. In global aviation, the six biggest providers probably have less than 30 per cent of the market. That just can't continue."

Dixon, with his longer experience in aviation, says the industry has changed dramatically for the worse since the Australians last wanted a piece of Air NZ.

"There is a whole different feeling. I think we now know this is the toughest business in the world and there's survival for us all at stake."

Norris says that when he took over as chief executive, he quickly realised that New Zealand and Australia would not be immune from the pressures towards consolidation.

So early on, he had a long, hard look at potential partners for Air NZ.

"When we sat down and seriously contemplated which airline as a cornerstone shareholder delivers the greatest value there was just no doubt that - putting aside the past and all that - that is Qantas.

"When you look at the synergies, the overlaps, the way we interact, the proximity of our countries and all the rest of it, there is no other arrangement that comes anywhere near providing the value to both airlines as us two getting together."

Norris and Dixon say that during the prolonged negotiations the two of them, and their teams, have developed an excellent working relationship.

Dixon acknowledges that last time Qantas took a stake in Air NZ, the relationship "did not take off at any stage".

But he is confident this time will be different.

"I know that this is going to be successful through personal relationships ... we are banking on that."

This time, too, the agreement has safeguards.

There is the requirement that a Qantas director must be present for the Air NZ board to have a quorum.

But there are also rules to stop Qantas trying to unreasonably stymie any Air NZ decision.

"We've worked through the details very carefully," says Norris, "and I'm confident that what we have is an agreement that is fair, practical and safeguards the interests of both sides."

But before the two airlines can work together, some big hurdles have to be jumped.

The factors that make the alliance so commercially attractive also ring alarm bells with consumers and consumer watchdogs.

It will control probably 95 per cent of transtasman capacity, 95 per cent of New Zealand domestic capacity and 65 per cent of Auckland-Los Angeles capacity. As well, Qantas has about 85 per cent of Australian domestic capacity.

"I'm not in any way going to fudge the competition issues," says Norris. "They are there, and they have to be addressed."

The forums for doing that will be the New Zealand Commerce Commission and the Australian Competition and Consumer Commission to which the airlines will be formally applying on December 9 for approval.

The arguments there may well boil down to whether national interests outweigh questions of competition.

Australia's Deputy Prime Minister, John Anderson, has already declared that the interests of consumers should not be paramount.

"I believe Australia needs to think carefully about how we may make certain that as many international airlines disappear over the next few years Australia still has a flag carrier, and a strong flag carrier."

Air NZ will doubtless take a similar view, pointing out that it won't do much to protect consumers if the airline goes bust.

It is also putting great store on an economic analysis by Australian consultants Network Economics Consultation Group saying that the alliance will generate net economic benefits for New Zealand of around $1 billion over five years, including 200 extra jobs with Air NZ, 50,000 extra tourists a year, enhanced freight services and more effective promotion of New Zealand overseas.

That is an impressive dowry.

But, as Tracy and Hepburn could testify, the wrong relationship can be very damaging, especially to all the dependants.

30th Nov 2002, 05:29
Picture becoming clearer.

Neither AirNZ or QF wants to face Trans-Tasman competition by themselves.

Virgin Blue, if well organised, would accentuate the already large losses.

Air NZ will again be artificially propped up by a socialist government but what about QF? Maybe they are the ones who will be vulnerable! Does QF stand to lose the most?

Barbers Pole
1st Dec 2002, 01:02
Kaptain M

Old son, the trade off between the two oufits is AirNZ get QF off our backs here domestically (where we make all our cash) and on the tasman which is over 23% of our flying and our largest visitor/holiday market. AirNZ are going to be doing all the scheduling,pricing etc for both companies. So the Tasman fares will probably go up a bit and some flight changes, then we'll see the Tasman making a profit. There is a profit share agreement between the two for the tasman routes so we will both make some cash out of it instead of losing money. win win

What QF get is that they can pull there domestic operation here in NZ or reduce it to a token level. (losing over a millon a week)
Make some $ off the tasman (instead of losing $)
get some cheaper engineering done here and AirNZ have agreed not to set up domestic operations in aust. (Freedom or Airnz) So thats one less potentially competitor in there patch where they are making all there cash. Also we wont compete out of aust to asian destinations. AirNZ used to operate lots out of Brisbane to asia before ansett came along.

Now do you understand the TRADES!!

Plus we get to codeshare on each others flights and there will be some horse trading on some international routes. End result is we both make more money.

Kaptain M

One other point, when the agreement says that Airnz will be codesharing with QF domestic flights that dosn't mean we will be flying any of them, it just means that when joe punter books his flight from Darwin to Christchurch he'll fly QF to Syd & then Airnz to Chc.
Both companies get a slice of the Tasman profit & we get access to more punters from the aust market.


mate, you need to sit down and have a cup of tea before you have an aneurism.

I'm sure QF/AirNz are both expecting Virgin to start operating on the tasman, this deal means that it will be 2 againist one instead of a free for all, and as Airnz's cost struture is a lot lower than Qf we are in the better position to compete in that market.

Sdy-Lax well we compete head to head with QF now and that will change, you go today,we go tomorrow, codeshared so we both get a cut.

As for rationalisation well which company has the higher cost of operating??? it aint AirNZ fella!!
Which company is being screwed by the unions??? it aint AirNZ!!
Dixon is a cunning ****** and i can hear him sharpening the sword!!
We had 10+ yrs of cost cutting under BIL, nothing left to trim. Thats why we will be such an asset to QF.
So you don't have to be a rocket scientist to see where any rationalisation is going to happen ;) (AA was the start))

Kaptin M
1st Dec 2002, 01:32
From the companies point of view, that's all well and good, B.P., however the CUSTOMERS lose out - by way of lesser frequency AND higher pricing.
Your statements, "..we will both make some cash out of it instead of losing money. win win" and , "End result is we both make more money. " where the "we" refers to QF and Air N.Z., is admirable, but doesn't benefit the MAJORITY - the CUSTOMERS.

As a regular traveller between the two countries, I can see NO benefit in the proposed trans-Tasman deal.

1st Dec 2002, 08:06
Well Mr M, I imagine a hell of a lot of ANZ staff who rely on their company surviving so that they can pay the rent do!

Buster Hyman
1st Dec 2002, 13:30
Ahh Kaptin, a lobby group, slendid idea! Alas, I feel your words about the overall apathy of the AN staff would doom it to failure, however, a one or two man lobby group sounds intriguing!! Who's with me???

Well Mr Seps, I know a hell of a lot of people who are having difficulty paying rent right now! Just hope QF don't decide to "cut you adrift"...for the good of the group, of course!;)

Barbers Pole
2nd Dec 2002, 01:09
Kaptain M

Well I'm sure you don't pay full fare for your travel :rolleyes: and even if you do you've told us numerous times about how much cash you make so really it's not that big a deal if you have to pay another $50 bucks ;)

Frequency wont change if the demands there!

2nd Dec 2002, 03:13

In admiration of your positivity.

I would think the best means of competing against Virgin Blue is with a Freedom Air cost base. Or what about Forstaff?

When VB crosses the Tasman the first $29.99 Airfare will see your lot flock over without a parochial concern.

Make hay while the sun shines!

Barbers Pole
2nd Dec 2002, 03:33

thanx mate, well we did set freedom up to offer low cost airfares to the public and also to make it harder for VB to enter the market here, if they offer $29 airfares I'll grab one and come over, you can shout me a cold one! (B)

Plus stage 3 of our new business plan will see us extend our no frills low cost "Express service" onto the Tasman/Islands. I'm not 100% sure but i'm pretty sure we still get paid less than the VB troops :( our cost base is pretty good

Media reporting here today that VB have said they wont operate the Tasman if the QF/AirNZ deal goes thru (not that I belive them for a sec) but instead are going to look at singapore, HGK,etc.

interesting times all round!

Kaptin M
2nd Dec 2002, 04:35
"Well I'm sure you don't pay full fare for your travel - well you`re wrong there, B.P., and not only for myself, but for my family as well! :eek:
It is only marginally more than the staff ID rate, but it guarantees me of a seat every time, the freedom to dress as we like, and the freedom to "whinge" if things aren`t up to standard! :D

And so as a FULL FARE paying pax, I choose QANTAS over Air N.Z. for better scheduling, better cabin crew service, and bigger aircraft!

It`s not the extra $50 that will be a problem (and I`ll bet fares go up a LOT more than that) ~ it`s the fact we are going to be at the mercy of a monopoly, with no choice (other than swim).

Barbers Pole
2nd Dec 2002, 21:19
I've noticed you like a good "Whinge" ;)

You and I both know that VB will fly the Tasman, they are just going to milk this QF/AirNZ deal for all it's worth to get the best deal for themselves, low terminal rents, baggage handling, Ldg fees, maybe try and force us to close or sell freedom, etc,etc so there wont be a monopoly. So you can relax old fella.

Secretly ;) VB are probably happy about it as they can use it to there advantage. Watch for the horse trading!

3rd Dec 2002, 02:21

If Air NZ are so cheap, efficient and profitable then why do they want this deal at all?

Conversely, if Qantas are so inefficent and expensive then why are they posting record profits?

In fact why are Air NZ not going head to head with Qantas using the competitive advantage you claim they have?

Maybe you can rush into Head office and tell Ralph you found the secret formula for success and they can call off the whole Qantas deal.

I suggest you have a good look at the labour agreements on both sides of the Tasman and factor in all labour cost and productivity elements before you make sweeping statements.:p

Selandia Baru
3rd Dec 2002, 08:03
BPAs the spokes person for ANZ you saidwell we did set freedom up to offer low cost airfares to the public and also to make it harder for VB to enter the market here
Freedom were on the scene way before VB to chase off Kiwi Air then kept around to ward off new players such as VB.
I read back thru a lot of your posts old fella and wonder which pedestal you see yourself on. Lets hope your cockpit doesn't run the same way..

Barbers Pole
4th Dec 2002, 09:04
SB and your point is........?

I don't have a pedestal just some facts/opinions.

LJ It's "Qantas" thats been pushing hard for this deal, personally I hope it dosn't go thru, but I'm just another part number in the system.

6th Dec 2002, 15:49
Sat "Sydney Morning Herald" 7/12/02

Air NZ at risk without Qantas alliance
By Mark Todd
December 7 2002

Air New Zealand's managing director, Ralph Norris, warned his carrier could become all but irrelevant in the global aviation industry if regulators blocked a proposed $520 million alliance with Qantas.

The collapse of the deal would leave Air New Zealand exposed to a brutally competitive market and could within a few years spell the end of its days as an international carrier. Mr Norris said that, by itself, Air New Zealand was a "minnow".

"Our time horizon has to be at least three to five years out," Mr Norris told an American Chamber of Commerce meeting in Wellington. "Without this alliance there is a high probability that within that time frame, Air New Zealand could be reduced to a domestic airline."

Under that stark scenario, Air New Zealand could be reduced to three key routes - Auckland, Wellington and Christchurch - which together are about a quarter the size of Sydney-Melbourne.

"Air New Zealand would be very isolated. They'd have a small market, less than 2 million passenger movements a year," said Peter Harbison, managing director of the Centre for Asia Pacific Aviation.

Mr Norris went on to note the New Zealand domestic market is too small to support two-full service domestic airlines. And Air New Zealand expected a no-frills competitor to launch a service within three years.

Even if the planned Qantas-Air New Zealand alliance does proceed, the pair would account for less than 4 per cent of the world's commercial airline activity. Mr Norris also assured his New Zealand audience that the deal in no way represented a "Qantas takeover".

The airlines are due on Monday to submit economic arguments in favour of their partnership to the Australian Competition and Consumer Commission and New Zealand Commerce Commission. To win approval, Qantas and Air New Zealand will need to show that the benefits from the deal outweigh a decrease in competition in the trans-Tasman market.

The airlines have promised economic benefits to Australia of more than $680 million over five years and about $NZ1 billion for New Zealand.

Under the deal, Qantas would acquire a 22.5 per cent stake in Air Zealand. The carriers would consolidate their trans-Tasman services - representing 10 per cent of Qantas's operations - and enter into a comprehensive codesharing agreement.

Meanwhile, Qantas took delivery yesterday in Toulouse, France, of its first Airbus aircraft. The Airbus A330-200 is one of 13 A330s Qantas will add to its fleet over the next three years as part of the airline's comprehensive fleet upgrade.

Qantas shares eased 5c to $3.66 as Salomon Smith Barney reduced its net profit estimate for the airline in 2002-03 by 5.3 per cent and 2.8 per cent for the year after. Nevertheless, SSB kept an "outperform" rating on Qantas and a valuation of $5.20 without the Air NZ alliance.

8th Dec 2002, 08:06
Will QF base their new A330's in AUK ,So the Air NZ crews can be dual rated on the A320/330. Now theres a real cost saving !!!!:D

Boeing Belly
9th Dec 2002, 06:45
I notice John Palmer is telling everybody that will listen that if the QF takeover is knocked on the head that it will probably mean the end for AirNZ. There is nothing worse than listening to a Kiwi squeal like a stuffed pig:mad: :mad: If it's the end for AirNZ then so be it. Who cares? The gap will be filled quickly. Look what happened in Australia. Let the market dictate who survives. If that lemon can't survive then good riddance to them.

9th Dec 2002, 07:07
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

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
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.


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.

9th Dec 2002, 18:16
.........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.

As long as Aunty Helen is in power, Air NZ will never be allowed to fold.

If the merger doesn't go ahead - The Kiwi taxpayer will continue to support the airline and even fund a 'war of attrition'.

Can Qantas outspend the NZ government?. Quite possible given their current Warchest.

A government supported AirNZ could well become the 'Olympic Airlines' of the South Pacific.

max rate
11th Dec 2002, 18:41

BB you idiot. It's squeal like a STUCK pig, or maybe even a Whinging Aussie.

13th Dec 2002, 08:45
Nice one Max, that should get a bite!

Kaptin M
13th Dec 2002, 11:37
Seems as though New Zealand, and Air New Zealand, are being RELUCTANTLY FORCED into this deal.

According to what I heard on a BBC "Business Report", this morning, New Zealand's Prime Minister - Helen Clark - was reported as:
"An angry New Zealand Prime Minister, Helen Clark, stated that up to 25% of national carrier, Air New Zealand, could be taken over by QANTAS, the Australian monolith.
One of the jewels of the Pacific, Air New Zealand was a likely candidate to be picked up for its on-carriage rights" [My interpretation].

Perhaps it's STILL a game of chess with SINGAPORE AIRLINES - QANTAS thinking that by holding the QF/TE cards they hold ALL the Aces.

Enter Air Nauru!!
The Dark Horse - who ALSO holds many of the destinations desired by SQ! :p

Far Canard
16th Dec 2002, 07:22
It will be interesting to see what happens when G. W. Bush starts his "revive the US economy" war. Price of fuel up, upset Arabs blowing things up and spreading small pox through aircraft air conditioning systems.

I think it is better for these two airlines to join forces and the governments on boths sides of the Tasman should tell Branson to get lost. These low cost operations are a death sentence for any normal airline.