Will QF + NZ have to merge??
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Will QF + NZ have to merge??
Qantas chief executive Geoff Dixon has tipped the global aviation industry to consolidate into a few, very large players as carriers struggle to cope with higher fuel costs.
Mr Dixon also disagreed with claims that Air New Zealand was too small to be a takeover target, but added that this didn't imply that Qantas was interested in buying the kiwi carrier.
Just days after announcing 1,500 job cuts at Qantas, Mr Dixon said globalisation, accelerated by permanently higher fuel prices, would result in a "new aviation world order".
"Right now the global aviation industry faces not just a shock or indeed a blip or indeed a crisis really but a permanent transformation," he told a business lunch in Sydney.
Cross-border merger and acquisition activity between airlines is currently prevented by strict foreign ownership rules in individual countries.
Mr Dixon said he was encouraged by current negotiations on an aviation agreement between the US and European Union.
"The EU's push for the abolition of foreign investment restrictions has so far - believe it or not - been resisted by the US, which limits foreign ownership of its airlines to 25 per cent of total voting stock," Mr Dixon said.
Mr Dixon said there were signs that the US may be prepared to accept airlines from Europe and potentially from other countries, based on their principal place of business rather than on strict ownership criteria.
"For us this would be a ground-breaking development," he said.
"It would open the way for airlines to engage in meaningful cross-border investments, and sooner or later it will happen.
"And we believe strongly at Qantas that over time, consolidation will transform aviation.
"It will produce a few very large and extremely efficient global airlines with a portfolio of interests and a portfolio of brands - the brands won't go.
When asked if Air New Zealand was a possible takeover target, Mr Dixon said that he disagreed with its chief executive's claims that the kiwi carrier was small enough to stay underneath the radar.
"I think it's changing so much that you won't be able to stay under the radar.
"And although I'm not going to say that Qantas and Air New Zealand are going to get together - we tried that once and we've moved on - I do believe very strongly and always have that consolidation will happen.
"Consolidation when it starts will be very erratic and I don't believe any airline, particularly in this part of the world, will be able to avoid consolidation."
"I'm not suggesting that's going to be Qantas and Air New Zealand but it's a small country, it's a difficult business (and) scale will be very, very important."
Mr Dixon said Qantas had positioned itself to avoid being swallowed up by investing in its business, cutting costs were appropriate, ordering more fuel efficient aircraft and developing a strong brand.
"The work that Qantas has done to date means that we will avoid any such dark destiny."
Seeing as QFA and ANZ couldn't even get approval to code-share on trans-tasman routes, I very much doubt any chance of a trans-tasman merger getting past the regulators.
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capt.cynical, AirNZ has already tried teaming up with a bunch of convicts once and been burnt..once bitten..
Wiz,
I've written the history lesson on here before about Air New Zealand's foray into Australia, and got replies as posts and PM's backing up what I wrote.
I don't have the time to repeat it all again, however the purchase of Ansett, which I assume you are referring to, was a long time in that making and goes right back to Australia renegging on the open skies agreement between the Australia and New Zealand.
So MattyJ's comments do have a fair amount of truth in them.
I for one would not trust an Australian company when it comes to dealing with a New Zealand company. You just need to see how Ansett New Zealand was screwed by Aussie interests. There was a very good example here recently in another industry of shady dealings involving Australian business and Australian banking interests and a New Zealand company which got screwed.
I've written the history lesson on here before about Air New Zealand's foray into Australia, and got replies as posts and PM's backing up what I wrote.
I don't have the time to repeat it all again, however the purchase of Ansett, which I assume you are referring to, was a long time in that making and goes right back to Australia renegging on the open skies agreement between the Australia and New Zealand.
So MattyJ's comments do have a fair amount of truth in them.
I for one would not trust an Australian company when it comes to dealing with a New Zealand company. You just need to see how Ansett New Zealand was screwed by Aussie interests. There was a very good example here recently in another industry of shady dealings involving Australian business and Australian banking interests and a New Zealand company which got screwed.
Nup
It would never be a genuine "merge" (or any other spin - partnership, unification, joint venture, etc etc). It would be a takeover pure and simple, and who would trust QF not to shaft the Kiwis?
Anway, the last time it was serously examined, Australia's ACCC and New Zealand's Commerce Commission found that a 'merger' (which was QF buying 23% of AirNZ) would lead to higher prices and lower service. Hence it was rejected by both agencies.
Anway, the last time it was serously examined, Australia's ACCC and New Zealand's Commerce Commission found that a 'merger' (which was QF buying 23% of AirNZ) would lead to higher prices and lower service. Hence it was rejected by both agencies.
HI everyone, you are missing what Dixon is saying, Air New Zealand's fate isn’t in their own hands, they will be bought out by a buyer unknown, when the Kiwi government or their majority share holders in that time gets sick of the taste of overwhelming losses on thin routes against huge major competitors.
If oil keeps going up, its inevitable, it has nothing to do with how good a company Air NZ is, because I personally hold them in a very high light in regards to their current managers and future fleet structure.But,and the big but is they are not and never will be big enough to hold of a foreign aggressive competitor who will systematically dry up their yields and compress their network into thinner routes.
Who will be the airline to take them over, I don’t know, I doubt it will be Qantas more likely someone with huge pools off cash and a surplus of aircraft looking for routes......Emirates maybe or even Eithad, it all depends on who is still standing when oil goes past $170 and stays above.
Anyway I am sure many Kiwis find what I am saying totally disgusting and not possible, but remember not long ago when every pacific island had their own 737 and called it a airline.
Consolidation is going to happen and small market share carriers will either unite with bigger players or disappear.
Anyway I personally hope Air NZ is around and flying the NZ flag for a long time to come.
If oil keeps going up, its inevitable, it has nothing to do with how good a company Air NZ is, because I personally hold them in a very high light in regards to their current managers and future fleet structure.But,and the big but is they are not and never will be big enough to hold of a foreign aggressive competitor who will systematically dry up their yields and compress their network into thinner routes.
Who will be the airline to take them over, I don’t know, I doubt it will be Qantas more likely someone with huge pools off cash and a surplus of aircraft looking for routes......Emirates maybe or even Eithad, it all depends on who is still standing when oil goes past $170 and stays above.
Anyway I am sure many Kiwis find what I am saying totally disgusting and not possible, but remember not long ago when every pacific island had their own 737 and called it a airline.
Consolidation is going to happen and small market share carriers will either unite with bigger players or disappear.
Anyway I personally hope Air NZ is around and flying the NZ flag for a long time to come.
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Back seat Driver....man you must like the idea of giving away QF! In the 47 years the cup has been contested you've only won it twelve times! Still, a 25% chance is better than none I suppose.
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May be we could have a football match and the loser could take both airlines as the prize. Looking at both airlines and their equipment reminds me of the last years of Ansett. No money and old planes ???????
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Unfortunately if BSD has his wish he could be in the money. I wouldn't bet anything against the QANTAS Wallabies when they are coached by that NZ legend Deans.
Last edited by Jed Clampett; 24th Jul 2008 at 09:54. Reason: wrong title
