Third Airline Imminent (Alan Kohler)must read
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Wed "Sydney Morning Herald"
Airlines scramble to get more terminal space
By Darren Goodsir, Transport Editor
June 26 2002
Airlines will start lobbying immediately for access to the old Ansett terminal as the airport's new owners seek further income opportunities.
It is understood Qantas and Virgin Blue, who were on the brink of securing up to 15 of the terminal's 18 gates from Sydney Airports Corporation, yesterday made contact with the Southern Cross syndicate to resume negotiations. Under the deal, both airlines were poised to take out 10-year leases.
But all three syndicates protested - forcing Sydney Airport to abandon its talks - amid fears the deal would lock out the rumoured entry of a third domestic airline.
The two airlines are keen for the talks to resume. Virgin Blue, which is taking delivery of a new aircraft every month, is near to reaching its capacity at the "tin shed", the domestic express terminal. Likewise Qantas, which wants to use half of the terminal for its regional operations, has threatened to expand its existing facilities and turn its back on the Ansett gates unless a deal is struck soon.
Virgin Blue's head of commercial, David Huttner, said he hoped Southern Cross would allow its in-principle agreements to be ratified.
"We have an agreement in principle, and we don't see any remaining issues that are showstoppers. Therefore, we hope the new owners will allow SACL to conclude this deal, on the terms already negotiated, as quickly as possible. This is the only way to allow us to grow fast enough to become a competitive force against Qantas, the dominant player in the market."
Ulrich Stucke, managing director of Southern Cross's chief airport investor, Hochtief, said it was premature to remark on future commercial deals and the better use of certain airport facilities.
"We believe it is very good for an airport to be in control of an airport asset. [But] that terminal will have to be improved."
Airlines reacted nervously to the sale, saying Southern Cross's $5.6 billion winning bid would put pressure on the owners to rais charges.
Warren Bennett, president of the Board of Airlines Representatives of Australia, said carriers would watch closely to ensure maintenance and service standards were not eroded to save on costs. "It is a rather worrying development. It makes airlines nervous about airline charges. We would like to have further discussions with them. We want to make sure they understand airlines' requirements and give due recognition to that."
The Federal Transport Minister, John Anderson, conscious of rural fears the sale would mean cuts in bush flights, said Southern Cross was committed to ensuring regional services did not decline.
"Regional commuters can also rest assured access for regional airlines will continue to be guaranteed. And the [Australian Competition and Consumer Commission] will continue to ensure prices for regional carriers do not increase in excess of the consumer price index. In short, no regional airline will be forced to move from Sydney airport."
But the Federal MP for New England, Tony Windsor, said the Government should spend some of the sale funds on nurturing bush services, which were not meeting the needs of country communities. "The so-called regional assurances don't give any long-term security of access at affordable rates."
Airlines scramble to get more terminal space
By Darren Goodsir, Transport Editor
June 26 2002
Airlines will start lobbying immediately for access to the old Ansett terminal as the airport's new owners seek further income opportunities.
It is understood Qantas and Virgin Blue, who were on the brink of securing up to 15 of the terminal's 18 gates from Sydney Airports Corporation, yesterday made contact with the Southern Cross syndicate to resume negotiations. Under the deal, both airlines were poised to take out 10-year leases.
But all three syndicates protested - forcing Sydney Airport to abandon its talks - amid fears the deal would lock out the rumoured entry of a third domestic airline.
The two airlines are keen for the talks to resume. Virgin Blue, which is taking delivery of a new aircraft every month, is near to reaching its capacity at the "tin shed", the domestic express terminal. Likewise Qantas, which wants to use half of the terminal for its regional operations, has threatened to expand its existing facilities and turn its back on the Ansett gates unless a deal is struck soon.
Virgin Blue's head of commercial, David Huttner, said he hoped Southern Cross would allow its in-principle agreements to be ratified.
"We have an agreement in principle, and we don't see any remaining issues that are showstoppers. Therefore, we hope the new owners will allow SACL to conclude this deal, on the terms already negotiated, as quickly as possible. This is the only way to allow us to grow fast enough to become a competitive force against Qantas, the dominant player in the market."
Ulrich Stucke, managing director of Southern Cross's chief airport investor, Hochtief, said it was premature to remark on future commercial deals and the better use of certain airport facilities.
"We believe it is very good for an airport to be in control of an airport asset. [But] that terminal will have to be improved."
Airlines reacted nervously to the sale, saying Southern Cross's $5.6 billion winning bid would put pressure on the owners to rais charges.
Warren Bennett, president of the Board of Airlines Representatives of Australia, said carriers would watch closely to ensure maintenance and service standards were not eroded to save on costs. "It is a rather worrying development. It makes airlines nervous about airline charges. We would like to have further discussions with them. We want to make sure they understand airlines' requirements and give due recognition to that."
The Federal Transport Minister, John Anderson, conscious of rural fears the sale would mean cuts in bush flights, said Southern Cross was committed to ensuring regional services did not decline.
"Regional commuters can also rest assured access for regional airlines will continue to be guaranteed. And the [Australian Competition and Consumer Commission] will continue to ensure prices for regional carriers do not increase in excess of the consumer price index. In short, no regional airline will be forced to move from Sydney airport."
But the Federal MP for New England, Tony Windsor, said the Government should spend some of the sale funds on nurturing bush services, which were not meeting the needs of country communities. "The so-called regional assurances don't give any long-term security of access at affordable rates."
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ABC News Net
Posted: Wed, 26 Jun 2002 18:49 AEST
Qantas confirms new Perth shuttle service
Qantas has confirmed it is launching a shuttle service between Perth and cities on Australia's eastern seaboard.
Chief Executive Geoff Dixon says four new airbus planes will carry 300 people per flight.
"It will provide a lot of capacity to both Melbourne and Sydney in particular from Perth," Mr Dixon said.
"We haven't finalised the exact schedules because we still haven't got a date, to tell you the truth, for the aircraft coming in, and they won't let us know for another 6 weeks because of the issues at Airbus."
Posted: Wed, 26 Jun 2002 18:49 AEST
Qantas confirms new Perth shuttle service
Qantas has confirmed it is launching a shuttle service between Perth and cities on Australia's eastern seaboard.
Chief Executive Geoff Dixon says four new airbus planes will carry 300 people per flight.
"It will provide a lot of capacity to both Melbourne and Sydney in particular from Perth," Mr Dixon said.
"We haven't finalised the exact schedules because we still haven't got a date, to tell you the truth, for the aircraft coming in, and they won't let us know for another 6 weeks because of the issues at Airbus."
A new category of AOC: the nudge nudge, wink wink AOC
The AOC expired two weeks after the Tesna Holdings deal collapsed in late February but an understanding was reached between the administrators and the Civil Aviation Safety Authority that the regulator would fast track the re-issue of the AOC if a new airline operation was identical to the original Ansett.
Given the extraordinary importance of that "understanding", prudence and good administrative practice would demand that the precise terms of the "understanding" and related discussions be meticulously recorded. I’ll look forward to CASA’s response when a Senate committee requests copies of the documents.
And it will be interesting to see whether, in the course of the (appropriately recorded) discussions leading up to the "understanding", CASA explained to Tesna that a delegate cannot be bound – whether by an "understanding" or even a deed signed in blood – to exercise the AOC-issuing power in a particular way, or at all.
Are the administrators really so naïve as to believe that experienced and well-advised investors would risk millions of dollars on the strength of a mere nudge nudge, wink wink from CASA?
And if the new airline operation were indeed to be "identical to Ansett", wouldn’t the new airline be at great risk of suffering a fate identical to Ansett?
I am perpetually astonished at these goings on.
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Reuters
Thursday June 27, 4:37 AM (Singapore)
Qantas aims to build non-aviation revenues
SYDNEY, June 26 (Reuters) - Qantas Airways Ltd said on Wednesday it aims to build revenues from its non-flight businesses to contribute up to a third of group profit.
Qantas chief executive Geoff Dixon told a luncheon the airline's catering, freight and holiday travel planning businesses had the potential to make increased contributions to company profit.
"In fact, we hope to nurture and shape them so that a third of our profits in future will come from these businesses," he said.
"The additional benefit from that is they're not quite as cyclical as the airline business."
Qantas shares closed 1.75 percent lower at A$4.49, in line with the broader market's 1.5 percent tumble.
On Monday, Qantas shares soared 4.4 percent after the airline lifted its A$550 million pre-tax profit forecast 10 percent.
However Dixon said on Wednesday the airline had yet to reach its potential, and needed the repeal of a law capping foreign ownership at 49 percent in total and 25 percent for a single airline.
"The Qantas Sale Act remains a real barrier to our ambitions to be globally competitive," Dixon said.
"The act, with its limitations on foreign investment in Qantas, restricts our capacity to access global equity capital. It also places an artificial ceiling on our share price, and consequently increases our cost of capital."
British Airways owns just under 25 percent of Qantas, leaving no room for further investment from offshore under current legislation.
He reiterated Qantas' hopes for a partnership with government-controlled Air New Zealand , which could involve code-sharing or other commercial alliances.
Qantas, which also wants a minority equity stake, had spoken with the New Zealand government and opposition, but has not yet had an answer.
The New Zealand owns 82 percent of Air New Zealand after a NZ$885 million rescue package earlier this year, a move brought on by the collapse of Air NZ's Ansett.
Singapore Airlines owns 4.5 percent of Air NZ, its previous 25-percent stake diluted by the NZ government bailout.
However talk has resurfaced that SIA plans a third airline in Australia, where Sir Richard Branson's domestic airline Virgin Blue has moved swiftly to try to fill the vacuum left by Ansett's demise, competing fiercely against Qantas.
"We have a line in the sand which we will defend, but I'm not going to tell you where that line is," Dixon said.
He said the company would soon take delivery of four Airbus
A330 aircraft, each seating about 300 people, which would be used on a route between Perth, Sydney and Melbourne.
Thursday June 27, 4:37 AM (Singapore)
Qantas aims to build non-aviation revenues
SYDNEY, June 26 (Reuters) - Qantas Airways Ltd said on Wednesday it aims to build revenues from its non-flight businesses to contribute up to a third of group profit.
Qantas chief executive Geoff Dixon told a luncheon the airline's catering, freight and holiday travel planning businesses had the potential to make increased contributions to company profit.
"In fact, we hope to nurture and shape them so that a third of our profits in future will come from these businesses," he said.
"The additional benefit from that is they're not quite as cyclical as the airline business."
Qantas shares closed 1.75 percent lower at A$4.49, in line with the broader market's 1.5 percent tumble.
On Monday, Qantas shares soared 4.4 percent after the airline lifted its A$550 million pre-tax profit forecast 10 percent.
However Dixon said on Wednesday the airline had yet to reach its potential, and needed the repeal of a law capping foreign ownership at 49 percent in total and 25 percent for a single airline.
"The Qantas Sale Act remains a real barrier to our ambitions to be globally competitive," Dixon said.
"The act, with its limitations on foreign investment in Qantas, restricts our capacity to access global equity capital. It also places an artificial ceiling on our share price, and consequently increases our cost of capital."
British Airways owns just under 25 percent of Qantas, leaving no room for further investment from offshore under current legislation.
He reiterated Qantas' hopes for a partnership with government-controlled Air New Zealand , which could involve code-sharing or other commercial alliances.
Qantas, which also wants a minority equity stake, had spoken with the New Zealand government and opposition, but has not yet had an answer.
The New Zealand owns 82 percent of Air New Zealand after a NZ$885 million rescue package earlier this year, a move brought on by the collapse of Air NZ's Ansett.
Singapore Airlines owns 4.5 percent of Air NZ, its previous 25-percent stake diluted by the NZ government bailout.
However talk has resurfaced that SIA plans a third airline in Australia, where Sir Richard Branson's domestic airline Virgin Blue has moved swiftly to try to fill the vacuum left by Ansett's demise, competing fiercely against Qantas.
"We have a line in the sand which we will defend, but I'm not going to tell you where that line is," Dixon said.
He said the company would soon take delivery of four Airbus
A330 aircraft, each seating about 300 people, which would be used on a route between Perth, Sydney and Melbourne.
Last edited by Wirraway; 27th Jun 2002 at 05:30.
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There is a report in the Ansett Central forum, saying that SIA will make a announcement on the 15th. August,regarding their intentions for Australia. It also states that Ansett mangement still employed by the Aministrator are in the know.
Is this another urban myth ? Or does anyone out there have any information on this ?
Is this another urban myth ? Or does anyone out there have any information on this ?
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Reuters (Singapore) Fri 7.12pm
Virgin Blue stamps out SIA rumours
By Rob Schutze
BRISBANE (Reuters) - Budget Australian airline Virgin Blue on Friday poured cold water on speculation Singapore Airlines would take a stake in it or make a solo foray into the A$10 billion Australian aviation market.
Brett Godfrey, chief executive of entrepreneur Richard Branson's joint venture with logistics group Patrick Corp, said the domestic carrier did not need a cash injection before a public float next year despite plans for a A$3.6 billion fleet expansion.
"Singapore Airlines have never made an approach to us and I'm not sure they are going to," Godfrey told Reuters in an interview.
"That's just some science fiction set in motion by analysts. There is not really room for a third partner in our airline now and it doesn't need money poured into it."
Speculation has mounted in recent weeks that a third player would enter the Australian aviation market to plug a gap in the Star Alliance network left by the collapse of Ansett last year.
But Godfrey said it was "ludicrous" to suggest SIA or another airline would tackle the Australian skies on behalf of Star Alliance.
"You wouldn't set up an airline just to feed Star Alliance traffic, we looked at it. It's just such an off-the-wall suggestion because the plane utilisation would be nothing."
Godfrey said he was sure a third airline would enter Australia, but not on a scale to tackle Qantas' 80 percent market share. It would more likely be a niche player with no more than two aircraft, he said.
Earlier this month, Virgin Blue announced a code share agreement with UAL Corp's United Airlines to begin in August. Godfrey said he was in talks with four more major airlines for code share agreements but would not disclose their names.
FLEET EXPANSION DECISION LOOMS
The Virgin Blue chief said a A$3.6 billion decision on fleet expansion could come as early as Wednesday when the board meets for the first time with Patrick executives around the table.
"I may have a recommendation on Wednesday to take one of the bids. But we're not going to put the pressure on ourselves to decide on that day."
He said bids were roughly finalised for Virgin to buy and lease either 40 Airbus planes to replace its existing fleet of around 17 Boeing 737s, or to buy 15 to 20 extra Boeing planes.
Godfrey said the Boeing bid was worth about half the A$3.6 billion Airbus bid.
Godfrey declined to tip a favourite in the contest but said the US$16 million to US$19 million it would cost to convert from Boeing had been factored into the Airbus bid.
PROFITS, MARKET SHARE CLIMB
Godfrey said after two years in Australia, the no-frills carrier has snagged 18 or 19 percent of the domestic aviation market, which would grow to nearly 25 percent by Christmas and 30 percent next June.
He said Virgin had beaten its pre-tax profit target of A$35 million for the year to March 31, 2002 but declined to say by how much.
Next year earnings would grow in proportion to fleet expansion, which is due to double, he said.
"The number for this year was based on an average of 10 to 12 aircraft but we will have on average 24 aircraft next year. So we expect to do significantly better."
Asked about the timing of the airline's planned share market float, Godfrey said: "It could be anytime in the next year but I'd expect it probably in the third or fourth quarter of 2003."
Lamenting Virgin's stalled negotiations for terminal space at Sydney airport, Godfrey said he was having more luck moving into Ansett's terminal at Brisbane airport.
"By the end of next month we will definitely have an arrangement in place to utilise that facility," he said.
Reuters
Virgin Blue stamps out SIA rumours
By Rob Schutze
BRISBANE (Reuters) - Budget Australian airline Virgin Blue on Friday poured cold water on speculation Singapore Airlines would take a stake in it or make a solo foray into the A$10 billion Australian aviation market.
Brett Godfrey, chief executive of entrepreneur Richard Branson's joint venture with logistics group Patrick Corp, said the domestic carrier did not need a cash injection before a public float next year despite plans for a A$3.6 billion fleet expansion.
"Singapore Airlines have never made an approach to us and I'm not sure they are going to," Godfrey told Reuters in an interview.
"That's just some science fiction set in motion by analysts. There is not really room for a third partner in our airline now and it doesn't need money poured into it."
Speculation has mounted in recent weeks that a third player would enter the Australian aviation market to plug a gap in the Star Alliance network left by the collapse of Ansett last year.
But Godfrey said it was "ludicrous" to suggest SIA or another airline would tackle the Australian skies on behalf of Star Alliance.
"You wouldn't set up an airline just to feed Star Alliance traffic, we looked at it. It's just such an off-the-wall suggestion because the plane utilisation would be nothing."
Godfrey said he was sure a third airline would enter Australia, but not on a scale to tackle Qantas' 80 percent market share. It would more likely be a niche player with no more than two aircraft, he said.
Earlier this month, Virgin Blue announced a code share agreement with UAL Corp's United Airlines to begin in August. Godfrey said he was in talks with four more major airlines for code share agreements but would not disclose their names.
FLEET EXPANSION DECISION LOOMS
The Virgin Blue chief said a A$3.6 billion decision on fleet expansion could come as early as Wednesday when the board meets for the first time with Patrick executives around the table.
"I may have a recommendation on Wednesday to take one of the bids. But we're not going to put the pressure on ourselves to decide on that day."
He said bids were roughly finalised for Virgin to buy and lease either 40 Airbus planes to replace its existing fleet of around 17 Boeing 737s, or to buy 15 to 20 extra Boeing planes.
Godfrey said the Boeing bid was worth about half the A$3.6 billion Airbus bid.
Godfrey declined to tip a favourite in the contest but said the US$16 million to US$19 million it would cost to convert from Boeing had been factored into the Airbus bid.
PROFITS, MARKET SHARE CLIMB
Godfrey said after two years in Australia, the no-frills carrier has snagged 18 or 19 percent of the domestic aviation market, which would grow to nearly 25 percent by Christmas and 30 percent next June.
He said Virgin had beaten its pre-tax profit target of A$35 million for the year to March 31, 2002 but declined to say by how much.
Next year earnings would grow in proportion to fleet expansion, which is due to double, he said.
"The number for this year was based on an average of 10 to 12 aircraft but we will have on average 24 aircraft next year. So we expect to do significantly better."
Asked about the timing of the airline's planned share market float, Godfrey said: "It could be anytime in the next year but I'd expect it probably in the third or fourth quarter of 2003."
Lamenting Virgin's stalled negotiations for terminal space at Sydney airport, Godfrey said he was having more luck moving into Ansett's terminal at Brisbane airport.
"By the end of next month we will definitely have an arrangement in place to utilise that facility," he said.
Reuters
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I have been away.
AN2002 is close to the truth.
SQ are closely evaluating their options.
They were sensible to wait for the bargain and no baggage ( especially union) from the old AN.
Patience gentleman.
QF have a sniff of this and one other option being explored are pulling out all stops to have some appeal to business passengers.
I hope the latter remember clearly QF's F### You attitude when there is again a REAL alternative!
AN2002 is close to the truth.
SQ are closely evaluating their options.
They were sensible to wait for the bargain and no baggage ( especially union) from the old AN.
Patience gentleman.
QF have a sniff of this and one other option being explored are pulling out all stops to have some appeal to business passengers.
I hope the latter remember clearly QF's F### You attitude when there is again a REAL alternative!
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Dow Jones (Singapore)
Singapore Air Chairman: No Australia Investment Plan For Now
SINGAPORE -(Dow Jones)- Singapore Airlines Ltd. isn't considering new investments to expand its role in the Australian aviation market at the moment, Chairman Koh Boon Hwee said Friday.
Despite the recent collapse of Ansett Australia Holdings Ltd. that country's former second-largest domestic airline, SIA has no intention to set up a third airline to fill the void, Koh told reporters.
When asked whether SIA will take a stake in Australia's current second-biggest domestic carrier Virgin Blue, Koh also ruled out the possibility for the time being. "Is it possible? Yes, it is possible. But are we considering it now? The answer is no," he said.
Speculation has been rife recently that SIA may either be involved in establishing a third Australian carrier or enter the market through an investment in Virgin Blue.
Ansett, Australia's former second-largest domestic carrier, was placed into administration in September after amassing around A$2 billion in debt.
Virgin Blue was launched by U.K. tycoon Richard Branson in mid-2000 as a low cost competitor to Qantas Airways Ltd. Australia's largest carrier. Branson sold half the airline to Australia's Patrick Corp. for A$260 million earlier this year.
SIA owns 49% of Virgin Atlantic, a U.K.-based airline unit of Branson's Virgin Group.
Although Australia remains a very important market for SIA, Koh said SIA's current priority is to enhance the carrier's competitive advantage and increase yields, or sales divided by passenger or cargo traffic.
SIA's net profit sank 61% to S$631.7 million for the year ended March 31, from S$1.62 billion a year earlier. Despite the sharp decline, SIA's resilience pleased investors as the global economic slowdown and the Sept. 11 terrorist attacks on the U.S. had led to depressed passenger and cargo demand.
"While our S$632 million profit after tax was a very good result considering the prevailing conditions, we must naturally aim for a stronger performance in this financial year, even though yields may be slow to recover," Koh said.
In order to rein in costs, SIA has frozen all pay increases for the financial year ending March 31, 2003, Koh said.
At 0744 GMT (3:44 a.m. EDT), shares of SIA were up 0.8% at S$13.10.
-By Shen Hong, Dow Jones Newswires; 65-6415-4156; [email protected]
(This story was originally published by Dow Jones Newswires)
Copyright (c) 2002 Dow Jones & Company, Inc.
Singapore Air Chairman: No Australia Investment Plan For Now
SINGAPORE -(Dow Jones)- Singapore Airlines Ltd. isn't considering new investments to expand its role in the Australian aviation market at the moment, Chairman Koh Boon Hwee said Friday.
Despite the recent collapse of Ansett Australia Holdings Ltd. that country's former second-largest domestic airline, SIA has no intention to set up a third airline to fill the void, Koh told reporters.
When asked whether SIA will take a stake in Australia's current second-biggest domestic carrier Virgin Blue, Koh also ruled out the possibility for the time being. "Is it possible? Yes, it is possible. But are we considering it now? The answer is no," he said.
Speculation has been rife recently that SIA may either be involved in establishing a third Australian carrier or enter the market through an investment in Virgin Blue.
Ansett, Australia's former second-largest domestic carrier, was placed into administration in September after amassing around A$2 billion in debt.
Virgin Blue was launched by U.K. tycoon Richard Branson in mid-2000 as a low cost competitor to Qantas Airways Ltd. Australia's largest carrier. Branson sold half the airline to Australia's Patrick Corp. for A$260 million earlier this year.
SIA owns 49% of Virgin Atlantic, a U.K.-based airline unit of Branson's Virgin Group.
Although Australia remains a very important market for SIA, Koh said SIA's current priority is to enhance the carrier's competitive advantage and increase yields, or sales divided by passenger or cargo traffic.
SIA's net profit sank 61% to S$631.7 million for the year ended March 31, from S$1.62 billion a year earlier. Despite the sharp decline, SIA's resilience pleased investors as the global economic slowdown and the Sept. 11 terrorist attacks on the U.S. had led to depressed passenger and cargo demand.
"While our S$632 million profit after tax was a very good result considering the prevailing conditions, we must naturally aim for a stronger performance in this financial year, even though yields may be slow to recover," Koh said.
In order to rein in costs, SIA has frozen all pay increases for the financial year ending March 31, 2003, Koh said.
At 0744 GMT (3:44 a.m. EDT), shares of SIA were up 0.8% at S$13.10.
-By Shen Hong, Dow Jones Newswires; 65-6415-4156; [email protected]
(This story was originally published by Dow Jones Newswires)
Copyright (c) 2002 Dow Jones & Company, Inc.
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Wednesday July 3, 10:10 AM (Singapore)
Australia's Qantas Keen To Secure 25% Air NZ Stake
SYDNEY (Dow Jones)--Qantas Airways Ltd. is aggressively seeking to buy a 25% stake in Air New Zealand Ltd., according to a report issued by Salomom Smith Barney Wednesday.
"We continue to believe Qantas is very interested in buying at least 25% of Air New Zealand," SSB analyst Jason Smith told clients in a note. "With the NZ national election now on 27th July - Qantas could gain its much sought-after stake sooner than expected," he added.
The Australian airline has previously expressed an interest in taking a stake in Malaysian Airline System . and Air New Zealand.
"We believe Air NZ does require additional funding and the (NZ) government will find it hard to justify injecting further capital in Air NZ now that the airline is operating on a much more viable basis," Smith added. The investment bank has a buy rating on Qantas with a 12-month valuation of A$5.80 on the stock. At 0203 GMT, Qantas shares were flat at A$4.55.
Last week, New Zealand Prime Minister Helen Clark declined to comment on how long the government wants to retain majority ownership of Air New Zealand or whether she would be happy with Qantas as cornerstone investor.
Salomon Smith Barney estimates Qantas will have to spend NZ$350 million to NZ$400 million to buy the 25% stake, plus up to NZ$100 million to NZ$200 million for further capital injections.
The New Zealand government has spent about NZ$885 million on a rescue package to save its troubled flag carrier.
Salomon Smith Barney also said Qantas is being actively courted by both Boeing Co. (BA) and Airbus (F.ABI) for further aircraft orders in the next six months.
-By Ambereen Choudhury, Dow Jones Newswires;
61-2-8235-2965; [email protected]
Australia's Qantas Keen To Secure 25% Air NZ Stake
SYDNEY (Dow Jones)--Qantas Airways Ltd. is aggressively seeking to buy a 25% stake in Air New Zealand Ltd., according to a report issued by Salomom Smith Barney Wednesday.
"We continue to believe Qantas is very interested in buying at least 25% of Air New Zealand," SSB analyst Jason Smith told clients in a note. "With the NZ national election now on 27th July - Qantas could gain its much sought-after stake sooner than expected," he added.
The Australian airline has previously expressed an interest in taking a stake in Malaysian Airline System . and Air New Zealand.
"We believe Air NZ does require additional funding and the (NZ) government will find it hard to justify injecting further capital in Air NZ now that the airline is operating on a much more viable basis," Smith added. The investment bank has a buy rating on Qantas with a 12-month valuation of A$5.80 on the stock. At 0203 GMT, Qantas shares were flat at A$4.55.
Last week, New Zealand Prime Minister Helen Clark declined to comment on how long the government wants to retain majority ownership of Air New Zealand or whether she would be happy with Qantas as cornerstone investor.
Salomon Smith Barney estimates Qantas will have to spend NZ$350 million to NZ$400 million to buy the 25% stake, plus up to NZ$100 million to NZ$200 million for further capital injections.
The New Zealand government has spent about NZ$885 million on a rescue package to save its troubled flag carrier.
Salomon Smith Barney also said Qantas is being actively courted by both Boeing Co. (BA) and Airbus (F.ABI) for further aircraft orders in the next six months.
-By Ambereen Choudhury, Dow Jones Newswires;
61-2-8235-2965; [email protected]
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Dow Jones
Dow Jones] Air New Zealand plans Auckland briefing on a "major company decision" at 1300 Sydney time. Briefing will be hosted by CEO Ralph Norris and chairman John Palmer. Management struggling with looming July 19 pilots strike but other issues could be talks about 25% stake from Qantas or mooted links with Virgin Blue. (IGP)
------------------------------------
11.09 AEST 4/6/02
[Dow Jones] Air NZ (AIZ) executives could announce major upgrade of aircraft fleet at early afternoon news conference in Auckland. AFR.com says deal could be worth up to A$1.5 billion and "will increase the urgency for an injection of new capital in the majority New Zealand government-owned carrier" and help plans for Qantas (QAN) to take 25% stake in the process. Air NZ up 1 cent at 56 cents in Sydney trade, Qantas (QAN) ahead 5 cents at A$4.60. (IGP)
------------------------------------
Top News
Thu, 04 Jul 2002, 11:36am EST
Air New Zealand Plans $1.5 Billion Upgrade of Its Fleet, Review Reports
By William J. Willitts
Auckland, July 4 (Bloomberg) -- Air New Zealand Ltd. is set to announce an upgrade of its narrow-bodied aircraft fleet in a transaction that could be worth as much as A$1.5 billion ($836 million), the Australian Financial Review reported.
The announcement is expected today in Wellington, the newspaper reported on its Web site. Government-owned Air New Zealand has called a news conference today at 3 p.m. New Zealand time. It gave no details.
Air New Zealand has been in negotiations with Boeing Co. and Airbus SAS to replace its existing fleet of 15 Boeing 727-300s. It has been looking at Boeing's 737 models and at Airbus A320s, the newspaper said.
The unprofitable national carrier was saved from bankruptcy by the government, which bought 82 percent after refinancing the business, injecting NZ$885 million ($430 million).
(Australian Financial Review 7-4 Web site)
Dow Jones] Air New Zealand plans Auckland briefing on a "major company decision" at 1300 Sydney time. Briefing will be hosted by CEO Ralph Norris and chairman John Palmer. Management struggling with looming July 19 pilots strike but other issues could be talks about 25% stake from Qantas or mooted links with Virgin Blue. (IGP)
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11.09 AEST 4/6/02
[Dow Jones] Air NZ (AIZ) executives could announce major upgrade of aircraft fleet at early afternoon news conference in Auckland. AFR.com says deal could be worth up to A$1.5 billion and "will increase the urgency for an injection of new capital in the majority New Zealand government-owned carrier" and help plans for Qantas (QAN) to take 25% stake in the process. Air NZ up 1 cent at 56 cents in Sydney trade, Qantas (QAN) ahead 5 cents at A$4.60. (IGP)
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Top News
Thu, 04 Jul 2002, 11:36am EST
Air New Zealand Plans $1.5 Billion Upgrade of Its Fleet, Review Reports
By William J. Willitts
Auckland, July 4 (Bloomberg) -- Air New Zealand Ltd. is set to announce an upgrade of its narrow-bodied aircraft fleet in a transaction that could be worth as much as A$1.5 billion ($836 million), the Australian Financial Review reported.
The announcement is expected today in Wellington, the newspaper reported on its Web site. Government-owned Air New Zealand has called a news conference today at 3 p.m. New Zealand time. It gave no details.
Air New Zealand has been in negotiations with Boeing Co. and Airbus SAS to replace its existing fleet of 15 Boeing 727-300s. It has been looking at Boeing's 737 models and at Airbus A320s, the newspaper said.
The unprofitable national carrier was saved from bankruptcy by the government, which bought 82 percent after refinancing the business, injecting NZ$885 million ($430 million).
(Australian Financial Review 7-4 Web site)
Last edited by Wirraway; 4th Jul 2002 at 01:42.
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WELLINGTON (Dow Jones)--Air New Zealand said Thursday that Australia's Qantas Airways hasn't made a formal offer to take a minority stake.
Chief Executive Ralph Norris, in response to a question about Qantas's ambition to invest in Air New Zealand, told a briefing on the local airline's fleet upgrade that discussions with Qantas are continuing.
"We are still in discussions with Qantas on a number of matters and certainly no decision has been made in that regard. We haven't had any formal request (offer) from Qantas," he said.
Air New Zealand said in late May that it had been in discussions with Qantas since May 2001 about the Australian carrier taking a stake and a range of other business issues.
- By Stephen Wright, Dow Jones Newswires; 64-4-471-5990;
Chief Executive Ralph Norris, in response to a question about Qantas's ambition to invest in Air New Zealand, told a briefing on the local airline's fleet upgrade that discussions with Qantas are continuing.
"We are still in discussions with Qantas on a number of matters and certainly no decision has been made in that regard. We haven't had any formal request (offer) from Qantas," he said.
Air New Zealand said in late May that it had been in discussions with Qantas since May 2001 about the Australian carrier taking a stake and a range of other business issues.
- By Stephen Wright, Dow Jones Newswires; 64-4-471-5990;
