As reported in Bloomberg today. QF will up the anti in New Zealand on both domestic and International services and will possibly purchase new planes for it's expanded New Zealand operation.
Looks like they are about to put the real squeeze on Air New Zealand. I can't see a QF/NZ partnership being anything other than an eventual certainty.
Qantas Plans to Expand Services in N.Z. Early in 2002, Rivaling Air N.Z.
By Tina Morrison
Wellington, Dec. 19 (Bloomberg) -- Qantas Airways Ltd. Chief Executive Geoff Dixon said Australia's largest carrier plans to expand in New Zealand next year, competing head to head with ailing rival Air New Zealand Ltd.
``We regard New Zealand as a very major part of the Qantas network,'' Dixon said after meeting Finance Minister Michael Cullen and Transport Minister Mark Gosche. Qantas plans ``to have a much bigger domestic and international operation out of New Zealand'' early next year, he said.
Qantas is seeking to expand in New Zealand at a time when that country's government is attempting to rescue Air New Zealand after a failed expansion into Australia. Air New Zealand abandoned its Australian subsidiary in September. New Zealand services make up most Air New Zealand's revenue.
``When you have a weaker competitor you have got to make the best of that,'' said Pano Raftopoulos, who helps manage A$600 million ($309 million) at Challenger Profession Investment Management Ltd. ``It is obviously a negative for Air New Zealand.''
Cullen ruled out discussing Air New Zealand's finances at today's meeting, which was sought by Qantas amid speculation it wants to ally with its rival. Ownership of Air New Zealand wasn't discussed at the meeting. Qantas's relationship with the government was, Dixon said.
``We will be treated as equals and there will be a system whereby whatever information we give the government will be secure,'' Dixon said.
Qantas loses money on its business in New Zealand, which it established when closely held Tasman Pacific, which had the Qantas franchise, failed. Recently Qantas announced plans for a discount service in Australia. It won't be offering that service in New Zealand, Dixon said.
Qantas plans to fly bigger aircraft in its home market, and move some of its Australian aircraft to New Zealand, Dixon said. It's also seeking board approval to get new aircraft for New Zealand, he said.
Air Pacific and Polynesian Airlines aircraft it currently uses in New Zealand will probably be replaced in the first quarter of 2002, he said.
Dixon told reporters Qantas wasn't seeking a stake in Air New Zealand, though he didn't rule out considering the option in the future.
``We always have felt that it's a very, very natural partnership but a lot of natural partnerships don't work and don't get done,'' he said, adding Qantas may have discussions with Air New Zealand after it appoints a permanent chief executive and board.
Air N.Z. Vote
Air New Zealand shareholders vote today on the government's proposal to buy NZ$885 million ($369 million) worth of shares at 27 New Zealand cents each and lend the airline NZ$300 million. The government may invest another NZ$150 million before June 30, 2003 and will own 82 percent of the airline.
``The major issue is whether Qantas does in fact end up taking an equity stake in Air New Zealand, which will allow them to share their cost base,'' said Rohan Walsh, who holds Qantas shares in the A$2 billion he helps manage at Invesco Asset Management.
Qantas shares fell 4 cents to A$3.67. Air New Zealand's unrestricted Class B shares rose 1 cent, or 3 percent, to 34 New Zealand cents.