ACCC knocks back Air NZ/VB Merger
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ACCC knocks back Air NZ/VB Merger
Reported in the New Zealand Herald at 12:44 today
Regulator knocks back Air NZ alliance bid - Business - NZ Herald News
Australia's antitrust regulator has knocked back a bid from Air New Zealand and Virgin Blue to forge an alliance on trans-Tasman routes.
In a draft determination, the Australian Competition & Consumer Commission said the alliance would probably boost the likelihood of coordinated conduct on routes between New Zealand and Australia with Virgin's Pacific Blue reining in its services.
"The ACCC considers that the alliance is likely to reduce competition in the market for trans-Tasman air passenger services," chairman Graeme Samuel said in a statement.
"More than one million passengers per year may be adversely affected by the removal of competition between Virgin Blue and Air New Zealand."
The airlines put forward the bid in May in response to Qantas Airways two-airline strategy where its low-fare Jetstar unit operates domestically in New Zealand and links to longer-haul flights on its parent. The tie-up required regulatory approval from the ACCC and New Zealand's Ministry of Transport.
Air NZ said it's reviewing the draft decision and will respond to the ACCC's concerns once they are identified.
Shares in New Zealand's national carrier fell 0.8 per cent to $1.25 in trading today, while Virgin Blue's stock sank 7 per cent to 40 Australian cents on the ASX.
Regulator knocks back Air NZ alliance bid - Business - NZ Herald News
Australia's antitrust regulator has knocked back a bid from Air New Zealand and Virgin Blue to forge an alliance on trans-Tasman routes.
In a draft determination, the Australian Competition & Consumer Commission said the alliance would probably boost the likelihood of coordinated conduct on routes between New Zealand and Australia with Virgin's Pacific Blue reining in its services.
"The ACCC considers that the alliance is likely to reduce competition in the market for trans-Tasman air passenger services," chairman Graeme Samuel said in a statement.
"More than one million passengers per year may be adversely affected by the removal of competition between Virgin Blue and Air New Zealand."
The airlines put forward the bid in May in response to Qantas Airways two-airline strategy where its low-fare Jetstar unit operates domestically in New Zealand and links to longer-haul flights on its parent. The tie-up required regulatory approval from the ACCC and New Zealand's Ministry of Transport.
Air NZ said it's reviewing the draft decision and will respond to the ACCC's concerns once they are identified.
Shares in New Zealand's national carrier fell 0.8 per cent to $1.25 in trading today, while Virgin Blue's stock sank 7 per cent to 40 Australian cents on the ASX.
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Sooooo it's fine for QF to effectively run 2 airlines on the tasman, but not OK for Air NZ and VB to forge an alliance and actually have a fighting chance against the QF/JQ machine...
Sounds a bit like a case of "do as I say, not as I do" from the ACCC. TYPICAL.
Can someone explain how this works
Sounds a bit like a case of "do as I say, not as I do" from the ACCC. TYPICAL.
Can someone explain how this works
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Bloody hell not a good week for VB.
What these regulators are failing to realise is that with fares only decreasing worldwide airlines have to find new ways to generate revenue.
Sounds like Mr Samuel enjoys some interesting perks from Qantas according to: http://blogs.crikey.com.au/planetalk...ing-club-land/
Would be good to see VB to lodge an official complaint and get all the dodgy boys deals out in the open.
What these regulators are failing to realise is that with fares only decreasing worldwide airlines have to find new ways to generate revenue.
Sounds like Mr Samuel enjoys some interesting perks from Qantas according to: http://blogs.crikey.com.au/planetalk...ing-club-land/
Would be good to see VB to lodge an official complaint and get all the dodgy boys deals out in the open.
Last edited by Mr. Hat; 10th Sep 2010 at 09:37.
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I maybe wrong but whats the difference of QF/JQ operating AUS-NZ and DJ/Pac Blue operating it. Two subsideries within the same company. Again I might be wrong but wasn't a QF/NZ alliance denied a few years back. Same scenario to me.
Not a surprising decision, especially in light of some of the other decisions from the west side of the Tasman regarding access to Australian skies.
One could be excused for thinking that like some previous decisions, Qantas had some influence in this decision.
Yes perhaps, but the dynamics were far different in that case WRT the collective dominance that QF/NZ would have had in the Tasman market.
One could be excused for thinking that like some previous decisions, Qantas had some influence in this decision.
wasn't a QF/NZ alliance denied a few years back. Same scenario to me.
Strike 2 for Borghetti
First the pacific alliance with Delta fails, now the Tasman is off the agenda.... What will happen with the mid east???? Just as I suspected, this guy is good at the management talk but lacking on action to back it up. Perhaps he was overlooked by Q for a reason??!!??
You heard it here first, VB will be no more within 2 years..... If they keep steering in the current direction
You heard it here first, VB will be no more within 2 years..... If they keep steering in the current direction
Last edited by mince; 10th Sep 2010 at 12:02. Reason: Taking out a superfluous 'out'
Just as I suspected, this guy is good at the management talk but lacking on action to back it up.
You heard it here first, VB will be no more within 2 years..... If they keep steering in the current direction
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Hmmm... anyone who says that must have bad karma themselves..
Think there is some water to "go under the bridge" on this ACCC decision.
However, it's starting to appear the ACCC may have some prejudice or hidden agenders at play.
Maybe an all expenses paid, first class trip to the middle east again would smooth this out...... for fact finding purposes of course.
Think there is some water to "go under the bridge" on this ACCC decision.
However, it's starting to appear the ACCC may have some prejudice or hidden agenders at play.
Maybe an all expenses paid, first class trip to the middle east again would smooth this out...... for fact finding purposes of course.
Bit rich VBPCGUY. Was it not DJ/PB that was protected by the same body a couple of years ago on the QF/ANZ tie up. QF did not even object to current plans. (at elast according to public statements)
DJ have been protected by the ACCC probably more than QF in the past decade. In the early post Ansett days QF could have and probably would have crushed DJ by dumping capacity and prices in the domestic arena. Take a loss to gain a monopoly, but alas the ACCC would not have allowed it for good reason. So it is a little bit rich to say they have been protected. Apart from stopping Singair from the pacific run, I find it hard to think of too many other examples of the Rat being protected. (I am Jet lagged though)
DJ have been protected by the ACCC probably more than QF in the past decade. In the early post Ansett days QF could have and probably would have crushed DJ by dumping capacity and prices in the domestic arena. Take a loss to gain a monopoly, but alas the ACCC would not have allowed it for good reason. So it is a little bit rich to say they have been protected. Apart from stopping Singair from the pacific run, I find it hard to think of too many other examples of the Rat being protected. (I am Jet lagged though)
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Don't expect a level playing field boys, this is business, last man standing wins!
The aviation game is about business, ego's, paybacks, money, dummy spits, more money and mates rates. It's politics with some Avgas added.
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Well there is agreement here that DJ built a very good domestic business and blew it on international. But it had to go international didn't it. The 777s were a very good idea, and from reading around, putting them on Joberg was a very stupid place to use them.
If some posters are right about the LAX route now making money that stupid move by the cockroaches was right to.
Reading other threads, it could be that DJ has less going wrong for it than QF.
If some posters are right about the LAX route now making money that stupid move by the cockroaches was right to.
Reading other threads, it could be that DJ has less going wrong for it than QF.
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Baygon
If some posters are right about the LAX route now making money that stupid move by the cockroaches was right to.
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I found these last paragraphs interesting:
The ACCC chairman, Graeme Samuel, this afternoon told ABC Radio that the main purpose of the Virgin Blue-Air NZ deal was to remove price competition between the two carriers. This is the same effect of course that will be achieved by Virgin Blue quitting the market, and leaving Air NZ out muscled by Qantas and Jetstar. The proposed deal would make it less likely that Qantas and Jetstar could dominate the trans Tasman market by their being countered by Virgin Blue and Air New Zealand.
Disapproving the deal means, perversely, the approving of a lessening of sustained competition on the routes, which is of significant benefit to Qantas, which would, as a consequence of the DoT ruling, also become entrenched as the only US or Australian carrier allowed to have a domestic feed for its trans Pacific flights at the Australian and US ends, the latter through its American Airlines deal.
Samuel is believed to remain an invited guest of the Qantas Chairman’s Lounge club rooms. He was asked this morning if it was appropriate that he continue to enjoy the benefits of that exclusive club and its hospitality at a time when he is making decisions that affect Qantas and its main Australian competitor.
The question has been ignored, twice. Samuel is a man of integrity, and can be expected to resign from the Chairman’s Lounge.
Disapproving the deal means, perversely, the approving of a lessening of sustained competition on the routes, which is of significant benefit to Qantas, which would, as a consequence of the DoT ruling, also become entrenched as the only US or Australian carrier allowed to have a domestic feed for its trans Pacific flights at the Australian and US ends, the latter through its American Airlines deal.
Samuel is believed to remain an invited guest of the Qantas Chairman’s Lounge club rooms. He was asked this morning if it was appropriate that he continue to enjoy the benefits of that exclusive club and its hospitality at a time when he is making decisions that affect Qantas and its main Australian competitor.
The question has been ignored, twice. Samuel is a man of integrity, and can be expected to resign from the Chairman’s Lounge.
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DFO with cheese and crackers
Oh please, spare me. The Chairman's Lounge is hardly a prestige highly sought after silo of superbness. These days it is usually overcrowded with all manner of gimps accepted into its throngs. If anyone honestly believes that Mr Samuels is trying to stich up DJ so he can retain his membership then a brain scan is in order. Samuels (until recently) could buy his own lounge !!
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You're getting Qantas Club & Chairmans Lounge confused - the first may be full of "gimps" using your words however you won't find that in the Chairmans Lounge which is still invite only from the CEO.
Now its Virgin/Etihads turn
Not happy with just the VB/ANZ alliance it seems.
Qantas opposes Virgin Blue-Etihad alliance
By Ghim-Lay Yeo
Qantas Airways has protested against plans by Australia's Virgin Blue and Middle Eastern carrier Etihad Airways to form an alliance, and has urged Australian regulators to not grant interim approval to the tie-up.
The Oneworld carrier says it is concerned the alliance could lead to "more widespread price coordination across the broad codeshare network", including on routes between Australia and Europe.
Virgin Blue and Etihad announced plans last month to join their networks and codeshare on flights between Australia and Abu Dhabi. The two carriers also plan to integrate their frequent flyer programmes.
In a submission to the Australian Competition and Consumer Commission, Qantas says that "it is not possible that the applicants will not also be coordinating prices between Australia and Europe".
"Since Abu Dhabi attracts only a small volume of point to point travel, the true value of the proposed alliance rests in access to international markets, and for Virgin Blue, the ability to offer services from Australia to UK / Europe," adds Qantas.
"The consequences of such coordination should be fully analysed before the applicants begin any cooperation."
Qantas and Etihad have an existing codesharing agreement on certain flights but Etihad's CEO James Hogan has said the partnership is too limited.
If interim approval is granted, Virgin Blue and Etihad will begin their partnership from 1 October. Virgin Blue customers will have access to Etihad's network of 65 destinations while Virgin Blue will offer 44 Asia-Pacific cities to Etihad passengers.
By Ghim-Lay Yeo
Qantas Airways has protested against plans by Australia's Virgin Blue and Middle Eastern carrier Etihad Airways to form an alliance, and has urged Australian regulators to not grant interim approval to the tie-up.
The Oneworld carrier says it is concerned the alliance could lead to "more widespread price coordination across the broad codeshare network", including on routes between Australia and Europe.
Virgin Blue and Etihad announced plans last month to join their networks and codeshare on flights between Australia and Abu Dhabi. The two carriers also plan to integrate their frequent flyer programmes.
In a submission to the Australian Competition and Consumer Commission, Qantas says that "it is not possible that the applicants will not also be coordinating prices between Australia and Europe".
"Since Abu Dhabi attracts only a small volume of point to point travel, the true value of the proposed alliance rests in access to international markets, and for Virgin Blue, the ability to offer services from Australia to UK / Europe," adds Qantas.
"The consequences of such coordination should be fully analysed before the applicants begin any cooperation."
Qantas and Etihad have an existing codesharing agreement on certain flights but Etihad's CEO James Hogan has said the partnership is too limited.
If interim approval is granted, Virgin Blue and Etihad will begin their partnership from 1 October. Virgin Blue customers will have access to Etihad's network of 65 destinations while Virgin Blue will offer 44 Asia-Pacific cities to Etihad passengers.
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You're getting Qantas Club & Chairmans Lounge confused - the first may be full of "gimps" using your words however you won't find that in the Chairmans Lounge which is still invite only from the CEO.
And the fact that it is not always what you know but who you know also comes into play. Not every Lounge member is a member of societies elite my friend.