Qantas DOES buy 1/4 of ANZ!!
 

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???

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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.

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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.

:confused:

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.

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.

Predictions?

Freedom Air sold to Patricks.

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

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!

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.

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.

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............:( :( :(

RK
 

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.

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?;)

: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.

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.

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.

Ct7

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.

"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.

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?

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:

Gnadenburg
Boeing Belly

You poor sad bitter b@#$%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 ****ty for all of them - if you want a lie in and are feeling brave fly on one of the asian carriers!!

Delta

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.

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!

Delta Whiskey
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 !