Qantas DOES buy 1/4 of ANZ!!
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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.
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.
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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.........
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.........
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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.
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.
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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?
BP
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.
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.
Moderate, Modest & Mild.
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.
"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!
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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!
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!
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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.
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.
Whiskerey
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!
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!
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Sat "New Zealand Herald" 30/11/02
Qantas and Air NZ: The odd couple
30.11.2002
By JIM EAGLES and CHRIS DANIELS
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.
Qantas and Air NZ: The odd couple
30.11.2002
By JIM EAGLES and CHRIS DANIELS
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.
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?
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?
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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.
Gandenburg
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))
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.
Gandenburg
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))
Moderate, Modest & Mild.
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.
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.
Evertonian
Was my name mentioned again???
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!
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!
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Kaptain M
Well I'm sure you don't pay full fare for your travel
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!
Well I'm sure you don't pay full fare for your travel
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!
BP
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!
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!
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Gnadenburg
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!
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 goodMedia 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!
Moderate, Modest & Mild.
"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! 
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!
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).
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!
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).