Wirraway
12th Jun 2003, 11:32
news.com.au
Kiwis count Qantas cost
By Steve Creedy
12jun03
REGULATORS have suddenly raised the hurdle facing the proposed Qantas-Air New Zealand alliance, publishing new estimates that it would cost New Zealanders up to $NZ68 million a year more than assumed.
Qantas wants to buy 22.5 per cent of Air NZ and operate joint services to and within New Zealand, but the alliance has been rejected by regulators on both sides of the Tasman as anti-competitive.
Figures released yesterday by the New Zealand Commerce Commission estimated New Zealanders could be up to 16 per cent worse off than originally thought.
The proposed deal would cut competition, lead to higher prices on routes and remove incentives to reduce costs, the commission said.
The commission revised its estimate of what the deal would cost the New Zealand public to between $NZ245 million ($214.5 million) and $NZ500 million a year from a previous estimate of $NZ202 million to $NZ432 million. It increased the estimated benefits of the deal by 3.3 million a year, to between $NZ33.5 million and $NZ49.6 million.
But its revised estimate that the net cost of a deal could be as high as $NZ466.5 moved even further away from the airlines' calculation that the public would see benefits of $NZ226 million a year.
Air NZ chief executive Ralph Norris was surprised at the new calculations and said Air NZ differed with the commission's economic modelling.
He said the airline had worked with the commission after "our identification of significant miscalculations" and would lodge a detailed submission on June 20.
"The commission's surprise release of its revised calculations suggest that there continue to be fundamental differences surrounding the correct approach to quantify the net public benefits of the alliance," Mr Norris said.
The new figures come as analysts expressed doubt that a decision by Dubai-based Emirates to fly 21 weekly flights across the Tasman by late October would help the airlines' cause.
The New Zealand commission will not make a decision on the alliance until after a conference in August. A final ruling by the Australian Competition and Consumer Commission has been delayed until at least next month.
Qantas is also in a holding pattern over its request to continue its joint services agreement (JSA) on the kangaroo route to Europe.
The ACCC gave interim approval to continue the JSA pending a decision later this year but said the airlines must prove that the agreement is in the public interest.
The agreement allowing the airlines to co-ordinate freight, scheduling, marketing, sales, pricing and customer service activities expires on July 21.
"The decision to allow Qantas and British Airways to continue their arrangements, for the time being, will avoid significant disruption at short notice to both the applicants and consumers," ACCC chairman Professor Allan Fels said.
Professor Fels warned the interim approval did not mean the ACCC would give final approval for the agreement.
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news.com.au
Qantas halts Rome flights
12jun03
QANTAS is suspending its twice weekly services to Rome via Singapore, blaming tough conditions for international airlines.
The airline said it would instead commence codeshare services four times each week to Rome via Hong Kong with oneworld partner Cathay Pacific.
Chief executive Geoff Dixon said Qantas began services to Rome in 1948 and the suspension highlighted an extremely difficult operating environment.
"This decision has not been made lightly," he said.
"The aviation industry is going through the most difficult period in its history, with SARS compounding the consequences of the events of 9/11, the wars in Afghanistan and Iraq and the threat of terrorism.
"All areas of Qantas have been affected and we have made a range of tough decisions including redundancies, retirement of aircraft and the reduction of capital expenditure by $1 billion next financial year."
Mr Dixon said Qantas would maintain a sales office in Rome.
The Cathay Pacific codeshare services will begin on September 9 and be operated by a Qantas aircraft between Australia and Hong Kong and a Cathay Pacific aircraft between Hong Kong and Rome.
Qantas said the arrangement represented a doubling of frequency with flights departing Australia on Tuesdays, Thursdays, Fridays and Saturdays.
It plans on operating 30 services per week to Europe from September 9 - 21 to London, seven to Frankfurt and two to Paris.
==========================================
Kiwis count Qantas cost
By Steve Creedy
12jun03
REGULATORS have suddenly raised the hurdle facing the proposed Qantas-Air New Zealand alliance, publishing new estimates that it would cost New Zealanders up to $NZ68 million a year more than assumed.
Qantas wants to buy 22.5 per cent of Air NZ and operate joint services to and within New Zealand, but the alliance has been rejected by regulators on both sides of the Tasman as anti-competitive.
Figures released yesterday by the New Zealand Commerce Commission estimated New Zealanders could be up to 16 per cent worse off than originally thought.
The proposed deal would cut competition, lead to higher prices on routes and remove incentives to reduce costs, the commission said.
The commission revised its estimate of what the deal would cost the New Zealand public to between $NZ245 million ($214.5 million) and $NZ500 million a year from a previous estimate of $NZ202 million to $NZ432 million. It increased the estimated benefits of the deal by 3.3 million a year, to between $NZ33.5 million and $NZ49.6 million.
But its revised estimate that the net cost of a deal could be as high as $NZ466.5 moved even further away from the airlines' calculation that the public would see benefits of $NZ226 million a year.
Air NZ chief executive Ralph Norris was surprised at the new calculations and said Air NZ differed with the commission's economic modelling.
He said the airline had worked with the commission after "our identification of significant miscalculations" and would lodge a detailed submission on June 20.
"The commission's surprise release of its revised calculations suggest that there continue to be fundamental differences surrounding the correct approach to quantify the net public benefits of the alliance," Mr Norris said.
The new figures come as analysts expressed doubt that a decision by Dubai-based Emirates to fly 21 weekly flights across the Tasman by late October would help the airlines' cause.
The New Zealand commission will not make a decision on the alliance until after a conference in August. A final ruling by the Australian Competition and Consumer Commission has been delayed until at least next month.
Qantas is also in a holding pattern over its request to continue its joint services agreement (JSA) on the kangaroo route to Europe.
The ACCC gave interim approval to continue the JSA pending a decision later this year but said the airlines must prove that the agreement is in the public interest.
The agreement allowing the airlines to co-ordinate freight, scheduling, marketing, sales, pricing and customer service activities expires on July 21.
"The decision to allow Qantas and British Airways to continue their arrangements, for the time being, will avoid significant disruption at short notice to both the applicants and consumers," ACCC chairman Professor Allan Fels said.
Professor Fels warned the interim approval did not mean the ACCC would give final approval for the agreement.
=========================================
news.com.au
Qantas halts Rome flights
12jun03
QANTAS is suspending its twice weekly services to Rome via Singapore, blaming tough conditions for international airlines.
The airline said it would instead commence codeshare services four times each week to Rome via Hong Kong with oneworld partner Cathay Pacific.
Chief executive Geoff Dixon said Qantas began services to Rome in 1948 and the suspension highlighted an extremely difficult operating environment.
"This decision has not been made lightly," he said.
"The aviation industry is going through the most difficult period in its history, with SARS compounding the consequences of the events of 9/11, the wars in Afghanistan and Iraq and the threat of terrorism.
"All areas of Qantas have been affected and we have made a range of tough decisions including redundancies, retirement of aircraft and the reduction of capital expenditure by $1 billion next financial year."
Mr Dixon said Qantas would maintain a sales office in Rome.
The Cathay Pacific codeshare services will begin on September 9 and be operated by a Qantas aircraft between Australia and Hong Kong and a Cathay Pacific aircraft between Hong Kong and Rome.
Qantas said the arrangement represented a doubling of frequency with flights departing Australia on Tuesdays, Thursdays, Fridays and Saturdays.
It plans on operating 30 services per week to Europe from September 9 - 21 to London, seven to Frankfurt and two to Paris.
==========================================