AJ
Topic Author
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Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 9:41 am

Just reported on Channel 7...a resounding NO on the proposed stake by Qantas in Air NZ.
 
Lufthansa
Posts: 2303
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 9:48 am

Hurray!!!! Raise your glasses everybody, we're still gonna have
an Air NZ!

This would have been the beggining of the end for NZ.....
I think they're gonna come out of this okay...i bet the new A320s
are gonna be set up similar to JetBlue, for the new TasmanExpress and
i have no doubt that will be popular if they keep the price down!
 
polnebmit
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 9:54 am

Finally someone put their foot down on Qantas. Getting too big of a bully down there!
 
rendezvous
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 10:28 am

I'm glad that decision was made-
 
AJ
Topic Author
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 10:30 am

 
AJ
Topic Author
Posts: 2295
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 10:33 am

 
QANTASpower
Posts: 515
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 10:39 am

Qantas will get what it wants .... it always does.

 
thadocta
Posts: 389
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 10:49 am

Typical, that communist Samuels is even worse than that limp-wristed communist that was in there before, Comrade General Secretary Fels. If they are trying to turn Air NZ into a non-entity only operating on back-water routes, they are going the right way about it.

Dave
 
QANTASpower
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 12:41 pm

Thadocta,

I agree with you 100%. I am disgusted with the actions of the ACCC trying to create some false market across the Tasman. As a Qantas shareholder I am so angry that this deal has been blocked. However what all you Qantas haters have to realise is that the Australian Govt will legislate this through if they have to.

This will also mean that SQ has no chance of starting up services from the Australia to USA.

This alliance will eventually go through. No one else wants to invest in Air NZ.

QANTASpower will prevail!
 
Lufthansa
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 12:57 pm

QantasPower
I've got news for you...The Commonwealth DOES NOT HAVE THE POWER to legislate this matter through. Such a move would go beyond the powers outlined under s51 and s92 of the constitution. The Parliament just can't go and make laws on whatever issue it pleases...it has to operate within the constitutional framwork and a very big part of that is operating within Judicial review. The commonwealth has power, subject to judicial review and can't simply go and 'legislate' against the decision of any board of Judicial review.
THAT would be a move far more akin to communisim.
Also its not the ACCC's job to protect Qantas or premote the interests of Qantas Shareholders. Their interest is in the public. Otherwise you could
argue the price fixing in supermarkets, petrol stations, drug production etc could all operate in the form of Cartel's, and maximise their profits. Ummm
that would be very bad for the economy.

In any case, New ZEALANDERS, don't want to be invaided by Australian Companies! So, even if the Australian government did have such power to regualate anything it pleases, well it still has to be approved in New Zealand and they're not going to do that. Come on...Qantas is in a very good position across the pacific already by far and large controlling it. How much more do they need?
 
pilottim747
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 1:03 pm

I'm with Lufthansa. QANTAS needed to be put back in it's place. Although I think it's a great airline I also think that the alliance would have given more power to this airlines which already holds so much power in the Pacific.

pilottim747
Aviation Photographers & Enthusiasts--Coordinate your life.
 
buckfifty
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 1:14 pm

The fallout from the Ansett saga continues.

In reality, even if the alliance does not go ahead, cartel price fixing and under the table dealings between Qantas and AirNZ would most likely continue on the trans Tasman routes.

In any case, Air New Zealand's prospects are dim to say the least. Their former aspirations to be a global player now long dead in the water, and further rescue from overseas investors are now highly unlikely for an airline with such a small market. If Virgin jumps into the trans Tasman fray, that would likely spell the end for AirNZ.
 
aviasian
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 2:07 pm

This issue strictly concerns the implications of a union between Qantas and ANZ on the travel interests of the Australian public.

At a later stage if this gets the blessings of the ACCC, then the New Zealanders have to go through the same due diligence.

Please don't always drag Singapore Airlines or any other carrier into this issue. It only serves to dirty the already muddy waters. The Open Skies negotiations between Australia and Singapore is the result of a willingness of both governments . . . don't think it is one knocking on the door with a beggar's bowl and the other dishing out charity.

KC Sim
Bangkok
 
rmm
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 3:05 pm

So, can we assume from this decision that AirNZ will become a purely domestic carrier as so often stated by CEO Norris?

Rmm
 
star_member
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 3:09 pm

great news......air nz is doing well despite all the threats from qantas. air nz should focus on its strengths like the nz domestic market, south pacific and trans tasman. why should an airline of a small country be offering a large international network anyway. how does that serve the nz public. i think all this negative talk about air nz turning into a small airline in the backwaters misses the point that as long as air nz makes a profit and serves the public it is a great success. don't get sucked in by the megalomanical tendencies of qantas chief geoff dixon.
 
AJ
Topic Author
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 3:16 pm

A common misunderstanding is that the Air New Zealand board does not support the Qantas stake, quite the contrary, to quote Air NZ's media release: "Air New Zealand Managing Director and CEO Ralph Norris said that while disappointed with the ACCC's decision, the next step would be to apply for review of the decision by the Australian Competition Tribunal."
http://www.airnz.co.nz/aboutus/mediacentre/pressreleases/default.htm
 
QANTASforever
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 3:52 pm

Hey, Qantas is just dishing out Karma here.

They come over here and f*** up our airline, we'll go over and f*** up theirs.


qff
Fighting for the glory of the Australian Republic.
 
JGPH1A
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 3:59 pm

Bye-bye Air NZ, then. Domestic/Trans-Tasman LCC in 3 years, out of business in 6. Shame, really - it's a good airline.
Young and beautiful and thin and gorgeous AND BANNED ! Cya at airspaceonline.com, losers
 
'Longreach'
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 4:39 pm

What does this do to Virgin Blues hopes of operating in New Zealand under the name of Pacific Blue?

I think part of the alliance was allocated access and slots for VB?

Qantas stated a while ago that they were holding back on ANZ until this deal went through; are New Zealanders about to get a price war before Virgin even arrive in town?

Put your predictions as to which company will bust first!
 
User avatar
Aloha717200
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 4:47 pm

Just how bad off IS Air New Zealand anyway?

I'm afriad I dont know too much about the airline's ops, but I thought they had 744 operations going transpacific and even into California at one time didn't they? Do these ops no longer exist?

Here I was thinking Air New Zealand was a large airline...
 
Air Taiwan
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 5:24 pm

QANTASpower,

No matter how much I perfer QF over Virgin, I still think you're pushing it a bit. What does "Qantas gets what it wants, it always does" mean? I don't think they'll give you a job at Qantas marketing even if you wanted one. Snobbery is what ppl think of Qantas (although slowly changing), but you just prove that lots of people are right about the QANTAS ATTITUDE!

I suggest you stop acting like that before you do more damage to QANTAS' name

Jimmy
 
qantas747
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 5:43 pm

Although I am very shattered about this decision, especially as I am a Canberra resident and it would have been great to see the combined entity operating direct NZ flights out of Canberra, after all it is the national capital of australia.

As for what Lufthansa said "In any case, New ZEALANDERS, don't want to be invaided by Australian Companies! "
I think that is quite the contrary, mainly because Virgin's plans to enter the pacific markets, involve it operating out of NZ with it 1:50 ratio keeping costs down. And also QF has been trying to do the same thing by using its NZ subsiduary Jet Connect to operate accross the Tasman. So therefore NZ will have 3 airlines based in NZ operating out of there. So it is much like NZ companies 'invading' Australia.

It is a terrible shame, and with the increased competition on trans-tasman routes with Emirates entering the market, one (or 2) of the four just will not be flying the route. As much as I dislike Virgin Blue, their busines plan is a success and their plans for pacific routes will most probably go ahead well.

It is a big shame, because now Air NZ will probably be the loser of all these shananagans, and unfortunately they will ultimately fail, as QF have a fairly strong domestic and International presence and it is improving quite a bit.

It would have been a good tie up, as we go through the revolution of the LCC, and having the 2 full-service guys up against the not so little LCC would have benefited everybody involved. The ACCC in Australia is going to eventually kill businessess with their attitude towards everything. it is all good and well to try and keep fares down and such, but they have to give consideration to these world recognised international airlines in this struggle in this difficult aviation period.

Oh well, Maybe in 10 years a direct NZ service from CBR will be viable, hell we already do charters with Super 12..... Just another bump in the road.

QANTAS747
 
DoorsToManual
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 5:47 pm

Interesting times.....I wonder what plan B is for QF and ANZ (I'm assuming they planned for this outcome).

rgds
 
StarFlyer
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 5:59 pm

Some of you people obviously dont understand that competition is the driving force of market economies. Only through competition there will be innovation and investing in new products.

What some of you may not know - New Zealand is actually one of the most liberal countries in the world in terms of market regulation - just about everything is privatized and many large companies now belong to Australian owners, including New Zealand's largest bank.

In this case however, it was right to decline the application for an alliance between the two countries major airlines. Anyone with a bit of knowledge in economics should have seen that one coming, particularly Ralph Norris and Geoff Dixon.

Norris' constant blackmailing has had many believe that there will be no Air New Zealand if this alliance gets a NO.

However, I believe that if NZ change their strategy, focus on their key markets and on cooperation with Star Alliance partners such as UA, LH, BD and SQ, there will always be Air New Zealand. Obviously it is wishful thinking that a country like NZ with a population of about 4 mio can support a large international airline like Australia can do. NZ needs to accept that it is a niche carrier. So what - just deal with and move on.

Yours truly - StarFlyer
 
Air Taiwan
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 7:41 pm

I don't think the size of NZ is the reason that Air NZ won't be a big international airline. I think the main reason that Air NZ wo'nt be able to grow too big is the geographical location of the country.

Singapore, Dubai, and Taiwan are all fairly small countries but they all have a sizable airline.

I think what will happen to Air NZ ultimately is that they'll turn into a "Air Tahiti Nui" (but a bit bigger), focusing mainly on inbound market and some outbound market.

agree?

Jimmy
 
StarFlyer
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 7:49 pm

Jimmy, TN is a great example. Thats how I see things too. Your completely right about the fact that NZ is so remote and thus hardly has any connecting passengers.
I wish NZ well. Still one of my favourite airlines.
Yours truly - StarFlyer
 
aviasian
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 7:56 pm

Personally, I think that an alliance between Qantas and ANZ is going to provide both carriers with some efficiencies . . . at the expense of the public, unless others are able to start-up to provide the public with choices.

I am certain that for every New Zealander who does not want a Qantas stake in its national carrier, there is another who thinks it is desirable. Same is probably true in Australia.

Not having the blessings of ACCC certainly does not mean the demise of ANZ . . . the Kiwi carrier must perhaps look to making better use of its membership in Star Alliance (something which it does not seem to have used to fuller advantage in the past). Both ANZ and Qantas are carriers with a proud heritage and a glorious past . . . and an inately good product.

KC Sim
Bangkok
 
aerokiwi
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RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 8:51 pm

Being one of the few (wait, am I the first?) actual New Zealanders to contribute to this thread, I think some things need to be clarified and others emphasised.

The issue of New Zealanders' attitudes towards an Australian buy-in...generally, NO. Most of our national assets and public companies have been hived off to Australian firms or gradually taken over in the last 20 years. After such radical change, New Zealanders have largely grown weary (and more alert) of the Australian domination of the New Zealand economy. With a growing distaste towards relinquishing public assets to foreign companies, the average Kiwi is by all accounts, against the idea. Add to that the general suspicion and competitive attitude towards our larger next door neighbour.

The Air NZ model...it is no longer a full service carrier on domestic routes. It is decididely value based. Perhaps not truly low-cost, but nor is Virgin Blue when compared to the likes of Ryanair. So all this kerfuffle about the NZ domestic market only being able to support one BUDGET and one FULL-SERVICE airline distorts the picture.

Qantas (through Jet Conect), provides a full-service. Air NZ does not. Qantas is losing considerable amounts on domestic NZ routes. Air NZ is turning record profits (on these routes). Qantas's relationship with Origin Pacific, the second major regional airline in NZ, is rumoured to be ending next year. Air NZ has total coverage of the NZ market.

It all makes for an interesting situation, especially once Virgin is factored into the equation. Virgin is low-cost. Air NZ will be low-cost. So where does that leave Qantas? Even with Jet Connect, they are losing a lot of money. How long is that sustainable?

And please remember that Air NZ is a state-owned asset. At least NZ$1 billion has been injected into the carrier, making it 82% owned by the public. What government would let it collapse in 5 years time with that amount of public funds involved? When it comes to protecting its investment, the government will legislate against the attacking "outside" party first. Otherwise, it would be political suicide. Can you imagine the headlines of "$1 billion Lost While Hospital Waiting Lists/Crime/etc Grows" ?

QF does not directly compete with Air NZ on many international routes. Asia on QF from New Zealand requires an annoying stop part way through. QF provides almost no access to the South Pacific, aside from a few individual carriers. Qantas is having aenough trouble competing with VB on domestic flights and preparing for a possible SQ attack to dedicate the resources necessary to make it truly dominant out of NZ. Oneworld is hardly the co-operative agreement that Star is, with fewer airlines, less coverage and a network far less suitable to Air NZ's needs (aside from, granted, the very important Australian market).

So all this bruhaha about the "end is nigh" for Air NZ seesm increadibly premature. And consider this - how long has Air NZ kept Qantas's competitive threat in NZ at bay? A good few years now, long enough to let Vigin grow and enter the market. And ultimately, see the withdrawl of Qantas from its loss-making operations in these isolated, shaky isles. Hehe, cunning.
 
TNboy
Posts: 1115
Joined: Mon Mar 04, 2002 8:12 pm

RE: Accc Says NO To Qantas/Air New Zealand

Tue Sep 09, 2003 9:25 pm

Once again the ACCC demonstrates that its head is firmly between its legs. The trans-Tasman route now has more carriers than you have fingers on both hands, and the numbers will increase rather than decrease. When Ansett folded, the doomsayers predicted that fares would skyrocket - instead they fell. There is no reason to believe that a QF-NZ alliance would send trans-Tasman fares skyrocketing, there ARE other players - check out the trip report on the Emirates flight posted just today. I have flown on both Lan Chile and Air Pacific on the crossing. Virgin Blue hasn't started yet.
And remember, that while NZ may have invested in a very good A320 product trans-Tasman, despite its quite good service, its long-haul product at least in the premium classes, is a long way behind the competition.
This isn't about getting rid of an airline or increasing fares, it's about bringing some stability to a particular region in an increasingly competitive and difficult environment. Its just a shame that bureaucrats can make decisions on airline mergers, supermarket prices, and petrol pumps (generally all wrong) in the one breath.
Cheers
Bill
"...every aircraft is subtly different.."
 
Lufthansa
Posts: 2303
Joined: Thu May 20, 1999 6:04 am

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 12:54 am

StarFlyer...said like a true german! Im proud!
AeroKiwi.... thanks for bringing some sence back into the debate.

I liken this to what all the Anaylists said about Virginblue 2 years ago.
They won't survive..they will be forced to merge with Ansett or Qantas
will have them fore breakfast etc .....
I remember thinking...BS...virgin are making a profit. Now as long
as you are making a profit and have customers...why would u be forced
to merge with anybody? And the rest is history......
I think Air NZ are up to something. I bet these A320s are going to have
PTV's in everyseat in TasmanExpress, and I bet the product is going to be pretty competitive.

The other big question i have to ask everybody, is one of the purpoted advantages of the alliance was the ability to serve new Routes...such as Canberra to Auckland. Now...the question I ask is what is to stop JUST ONE carrier doing that now? After all, Qantas offers Non-stop Sydney-townsville flights despite the fact virginblue doesn't, or Ansett didn't? And Freedomair offers direct service from the Gold Coast to Auckland....but Qantas doesn't?
It doesn't wash. Of course they would be financially stronger if you got them to behave in a monopolyistic fashon! Derrr.....
What they would have the effect of doing, is turning Domestic aviation back in New Zealand to somwhere in the 70s or 80s. One domestic carrier, and joint tasman flights. I think QF may either change its NZ operation style entirely or pull out of NZ domestic completely. Until it gets a more comprehensive domestic NZ network, the kiwi business man will fly NZ because they can get points everywhere they go...not just between Auckland, CHC and Wellington.
Option 3 - Qantas attempt to drive NZ out of business inorder to go and and fill its place. if they can get them to loose enough money on domestic, transpacific and tasman routes, they may just be able to do it....but at what costs to themselves?
 
'Longreach'
Posts: 457
Joined: Fri Jul 27, 2001 11:36 pm

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 2:17 am

Just a question... do you all think that Virgin will be anywhere near as successful over there considering it is up against a Low Cost Domestic Air New Zealand, and Qantas's Jetconnect??

Their success in Australia was largely due to the fall of Ansett and the fact that they were a new concept in travel, does anyone else think that they wont go so well is New Zealand? Especially considering the airline won't be under the Virgin name bringing its huge reputation??
 
StarFlyer
Posts: 929
Joined: Thu Sep 12, 2002 10:07 am

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 2:31 am

Lufthansa, sorry, but what was so "German" about my post?
I consider myself half kiwi (I am actually a resident of NZ) and I think anyone with a broader knowledge in economics would have posted like that.

I am not offended I just dislike it when people say this and that is typically "German".

I have grown up with an understanding of being European and I dont like being put in the "German draw" just because my profile says so. I used to have NZ on there, what would you have said then?

Sorry, I am not mad at you, just want to know why your saying that (and yes, I know you've got a German passport too!).  Wink/being sarcastic
Yours truly - StarFlyer
 
Lufthansa
Posts: 2303
Joined: Thu May 20, 1999 6:04 am

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 2:55 am

Wow....slow down a second! I was referring to the very direct, down to the point approach you took! I admire it...and if you said u were from PNG or something I still would have admired it. It is a complement. And a direct, efficient and straight to the point approach to things is typically German. It could also be typically Scandinavian. But some other places tend to take a slightly longer winded less direct approach to things. And is it a good thing? Definately....that's how u get Lufthansa's or Deustche Bahn's legendary reliability. That's all...simple...your not being thrown in some basket or labelled!

Yes u are right, anybody with basic economics knoweledge understands that.
That includes Qantas... they know exactly what they're doing!
 
StarFlyer
Posts: 929
Joined: Thu Sep 12, 2002 10:07 am

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 3:03 am

Thanks Lufthansa!  Big grin I was just wondering what you meant! Peace bro!  Smokin cool
 Wink/being sarcastic

[Edited 2003-09-09 20:04:07]
Yours truly - StarFlyer
 
Guest

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 8:48 am

What on earth are the ACCC thinking?

This was a perfect opportunity for the ACCC to show they are not some backward communistic anti-business entity at the sole behest of a couple of egg heads.

Both QF and NZ proved beyond a doubt that consolidating their TT business and other key routes / markets they would manage some substantial savings in the years to come.

They also showed considerable proof of the impending price war / destabilisiation should the two not be allowed to consolidate.

Hasn't the airline industry, it's staff and shareholders suffered enough?

Just for 6 months of cheap tickets?

It will be interesting to see how Virgin now forge ahead with their NZ domestic and TT aspirations, especially if the White Rat tries to strangle the Koru. I see some Kiwi bravado in this thread and the usual braying about QF losing money on it's NZ domestic operations, but I have it from an old hand that the losses are nothing compared to the benefits of having the network.

Who will come out on top? It's a pretty easy guess, although stranger things have happened.

Cheers,


mb

*yay* toybox*
 
QANTASpower
Posts: 515
Joined: Sat Aug 17, 2002 3:07 pm

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 9:59 am

This is not over yet.

I believe a new proposal will come out whereby QF will agree to "sell" there NZ operation to Virgin and withdraw from the NZ domestic market and just code share on ANZ flights. This is what would have happened in any case.

They will also propose more stringent conditions on the Tasman flights to ensure Virgin get a reasonable share and then you will have a deal.

Thank you

QANTASpower


 
Guest

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 10:48 am

Qantaspower,

I think the ACCC has made it quite clear that even the revised application was considered a complete joke, so I cannot see another revised version being presented in a hurry.

What we'll probably see is QF up capacity, slash prices, and undermine NZ as quick as it can. DJ will move in a bit slower but will probably hurt NZ in quite a short amount of time.

We know how the end game will be played out. Although only time will tell.

mb



 
Beno
Posts: 422
Joined: Wed Aug 28, 2002 6:52 pm

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 2:51 pm

IMO QF Should forget about the alliance and do what they should have done 2 years ago and kill off Air NZ which will free up plenty of market in the long run. And then concentrate on competing against EK which in the future will be a far more aggressive/smarter competitor than Air NZ could ever be.

Sorry to all the Kiwis but that's what will happen.

I can't see to many ex Ansett workers shedding to many tears.
 
aerokiwi
Posts: 2253
Joined: Sun Jul 30, 2000 1:17 pm

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 7:26 pm

"Kiwi bravado" ? Hardly. Simply trying to remind others on this thread that it's not just a decision for the Australian authorities to make. Believe it or not, New Zealand does have an independent competition authority (the NZ Commerce Commission) AND Government. I love it how everyone just barges on in and thinks this entire process will be determined by Australian interests alone. Perhaps this is why Australia is so distrusted by Pacific Island nations.

Again, to labour the point, the NZ government will not let a $1 billion investment be destroyed, along with its popular support, by a foreign entity. Governments have paid for that in the past and the lessons have been learnt. If worse comes to worse, Air NZ will be protected.

Second of all, in NZ we have something called the Commerce Act, which lays down clear rules for competitive practices. QF dumping capacity and deliberately losing money to drive NZ out of business would likely be deemed illegal. I'm sure these types of controls exist in most other liberalised economies. They exist to preserve competition.

And one has to wonder at some members claims that the ACCC is being "communistic" (is that even a word?). The ACCC does not exist at the behest of corporates, but as a protector of competitive practices, necessary elements for an efficient and sustainable economy that help maximise the benefits for consumers.

And yes we all "know it from an old hand" yadda yadda yadda. Everyone these days seems to have the "inside scoop" on whatever and we all claim to know them. It kinda just makes the argument a bit of a joke to claim these things.

I think perhaps QANTASpower is correct - if the QF/NZ tie-up is to go ahead, it will likely see the withdrawl of QF from domestic NZ ops, instead interlining or codesharing with Air NZ (& vice versa in Australia). Meanwhile "Pacific Blue" takes over as the second major domestic carrier.

And can't anyone see that this is just bad business practice anyway? QF gains a 22.5% stake but takes at least a 50% say on the Board. Correct me if I'm wrong but it sounds like a total jip to me.
 
thadocta
Posts: 389
Joined: Mon Aug 13, 2001 9:44 am

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 7:47 pm

After reading ALL of the above, I need to make the following points:

* Qantas wants the deal

* Air NZ wants the deal

* Aust government (via the Minister for Transport) wants the deal

* NZ government (via the Minister for Transport) wants the deal

What is the problem here?

Looking at various threads in the discussion forum, Vermin are more than well placed to compete across the Tasman, indeed, they even have one aircraft painted in "Pacific Blue" livery to operate these flights. So much for "lack of competition". And fares will go down on thiese routes, regardless of whether this deal goes through or not.

It strikes me as strange that a deal which BOTH governments want can be struck down because of arguments (related to competition issues) which do not hold up.

Just goes to show that Fels was the limp-wristed communist we all saw him to be, and his successor is continuing down the same path.

Dave
 
wirraway
Posts: 1294
Joined: Sun Mar 25, 2001 4:32 am

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 8:19 pm

Wed "Sydney Morning Herald"

Air NZ ruling buffets Virgin
By Scott Rochfort
September 10, 2003

Fresh doubts have been raised over the timing of Virgin Blue's stockmarket float amid concerns the airline's plans to expand into New Zealand could be stifled by the looming trans-Tasman turf war between Qantas and Air New Zealand.

With the Australian Competition and Consumer Commission rejecting the proposed $NZ550 million ($490 million) alliance between Air NZ and Qantas as anti-competitive, analysts warned Virgin would have difficulty replicating the success of its domestic operations on the low-yielding trans-Tasman and New Zealand domestic markets.

"This is a major blow to Virgin Blue's international expansion plans, in that it will now make its expansion more costly, more risky, longer to implement and potentially less profitable," said Smith Barney analyst Jason Smith.

"This decision, combined with Qantas's launch of a budget carrier, will also make the proposed float much less attractive in our view," Mr Smith added.

In another worrying sign, Air New Zealand moved to spoil Virgin Blue's plans on the New Zealand domestic market, after abandoning a yet-to-be-signed agreement to free some of its domestic terminal space at Auckland Airport to Virgin.

Just last week Air NZ offered Virgin access to "one-sixth" of its domestic gates and check-in counters at the airport. The latest decision has no bearing on Virgin's access to international gates in New Zealand.

While the NZ Commerce Commission has yet to make a decision on the deal, Air NZ chief Ralph Norris said yesterday's ACCC decision meant his company no longer would "bend over backwards" to assist Virgin. "It's every airline for itself," he said.

Virgin Blue's head of strategy, David Huttner, insisted Virgin's plans to fly to New Zealand were still on track, noting the airline had placed job advertisements for New Zealand crew just last weekend.

But Mr Huttner declined to give any potential timetable for Virgin's first landing in New Zealand.

"The problem is that Qantas and Air New Zealand will read the paper tomorrow," he said.

Mr Huttner said Virgin domestic flights in New Zealand would now probably miss Auckland, while "we probably look to building something akin to the old 'tin shed' at Sydney Airport".

While it was widely expected the ACCC would reject the deal, Qantas shares slumped 22c to $3.30 immediately after the decision, recovering to close 16c lower at $3.36. Air NZ closed 7c lower at 48c.

Some analysts also questioned Air NZ's recent pleas that its long-term viability depended on its proposed alliance with Qantas.

In light of Air NZ reporting its first profit over the Tasman in five-years and also having $NZ850 million of free cash on its balance sheet, Merrill Lynch analyst Simon Gresham said: "The assumption that they are an endangered species may be premature, given their recent performance."

Meanwhile, the Air NZ chief said he was "amazed at the flagrant error in the ACCC press release" which stated that Qantas and Air NZ had a 90 per share of the trans-Tasman aviation market. With the recent entry of Emirates, Mr Norris said the true figure was 75 per cent, and possibly 65 per cent with the entry of Virgin.

But ACCC commissioner Ed Willett said that, unlike Air NZ, the ACCC calculated how many passengers travelled across the Tasman, not how many seats.

"The usual way of counting market share is how many products you sell not how many you make," Mr Willett said.

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wirraway
Posts: 1294
Joined: Sun Mar 25, 2001 4:32 am

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 8:29 pm

Wed "Sydney Morning Herald"

Banker better than Biggles
By Alan Kohler
September 10, 2003

Ralph Norris, the chief executive of Air New Zealand, has been a revelation since he was appointed 18 months ago.

"But he's a banker - what would he know about planes," the world's aviators squawked. It was generally assumed that this already sick company would soon fully succumb to the fumbling ministrations of this former boss of the Commonwealth Bank's New Zealand subsidiary, ASB Bank.

But while it's true that aviation is a uniquely complicated business, and Air NZ was near death from ansettitis, Norris is actually in the process of turning Air NZ around. In fact, it probably doesn't need Qantas any more.

In pressing the case for the alliance between the two a month ago, Norris had suggested that without it, Air NZ would not survive. A couple of weeks later he announced an embarrassingly handsome $147 million profit and had to quietly take the earlier dire warning back. Now they're warning of long-term strategic difficulties, not quite the same.

None of which made any difference to Graeme Samuel's confirmation of his predecessor's decision to block the alliance. Ensuring the survival of a company that is 82 per cent owned by the NZ Government is no basis on which to run Australian competition regulation.

So yesterday's decision was no surprise, and Air NZ will survive - although it will need more capital than the NZ Government can supply. The really interesting question is what that survival might mean for the Australian aviation market.

Subject to yesterday's decision being overturned on appeal, the big operational issue facing Air NZ now is getting better access to the Australian market. At the moment it buys capacity from Qantas on the same terms as everybody else - in other words, it is being screwed.

The alliance was designed to give it access to code-sharing with Qantas so it could fly Kiwis on to other ports. Now it will need to negotiate a better deal with Qantas without providing an equity link (unlikely), do a deal with Virgin Blue or fly as a domestic Australian carrier itself. Under CER, it is allowed to do that but bought Ansett instead - not the better of the two ideas.

Qantas and Virgin Blue will now be watching nervously to see whether the banker turned aviator and his board decide to do what Air NZ should have done in the first place, which is become a domestic carrier in Australia.

That's because Air NZ is in danger of becoming a seriously profitable and effective airline. In 2002-03 its yield (revenue per passenger kilometre) was 12.3c. Qantas's was 10.7c.

Air NZ's profit of $147 million was 42 per cent of Qantas's $343.5 million, earned by carrying 38 per cent the number of passengers Qantas carried and pulling in just 30 per cent of its revenue passenger kilometres (RPKs, the key aviation benchmark). This is an airline, remember, that 12 months ago was on the brink of collapse, and is still in turnaround mode.

Maintenance costs are lower - it costs up to 20 per cent less to overhaul a GE aircraft engine at Air NZ's Christchurch facility than at Qantas's in Sydney - and the New Zealand carrier's unit operating costs are said to be between 10 and 20 per cent below those of Qantas.

This was probably one of the keys to the deal for Qantas CEO Geoff Dixon. Having an alliance with a lower cost NZ airline would escalate the pressure on the Australian unions.

Ian Thomas, at the Asia Pacific Centre for Aviation, believes Air NZ would now have little trouble raising the capital needed to begin flying as a domestic Australian carrier, concentrating on the high-yield east coast routes.

Alternatively, Norris might look at doing something with Virgin Blue. Who could forget Richard Branson's humiliation of Norris's predecessor, Gary Twomey, when he tore up Air NZ's $250 million takeover cheque on national television.

Of course, Branson then went on to take much more care with a rather smaller cheque from Chris Corrigan's Patrick Corp and Corrigan now calls the shots at Virgin Blue.

But Corrigan and Branson now have a problem. Not only will be difficult, if not impossible, for them to make any headway in the trans-Tasman market, they face the prospect of Air NZ's own discount operation, Freedom, flying domestically in Australia and doing an Impulse/Compass in Australia - only much more effectively, and with more capital.

All in all, Samuel has deftly arranged for all the airlines to go back to cutting each throats - not just on the Tasman route but also, possibly, within Australia as well.

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QANTASpower
Posts: 515
Joined: Sat Aug 17, 2002 3:07 pm

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 9:15 pm

Aerokiwi,

You are incorrect. Qantas will get 2 places on the Air New Zealand Board one of which will be taken by CEO Geoff Dixon. In return Air New Zealand will get 1 place on the Qantas Board which will be either the ANZ Chairman or CEO.

I hope this goes ahead. I would love to see ANZ and Qantas work together to take on Govt owned airlines like SIA. It makes so much sense for QF to code share on ANZ domestic flights and vice versa with Virgin providing a competitive force. QF feed will be a massive boost to ANZ domestic.

Thankyou

QANTASpower









 
Guest

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 9:32 pm

Aerokiwi,

Bravado indeed.

I work as an International Equities Trader mate and we consider NZ a basket case economy. NZ has been raped and pillaged and your only hope is to join Australia and become part of it's economy.

Boring rhetoric about NZ's sick of being pillaged is crap. You voted in the government that sold you lot out.

You only have to look at the most liquid stock companies on the NZX to see they are listed in Australia as well. I have to try and buy NZ companies on a regular basis and we are about to simply non-bind the NZX as useless because of liquidity.

I think Qantaspower probably summed it up quite well, that Qf will get what they want in the end. Can Kiwiland actually support ANZ in such a manner? Will your traveling public support the govt spending quillions on saving ANZ time after time? Far out, you only have to look at Tranzrail to see the debacle that is all on for young and old.

I think Jeff Kennett forked over Victoria here in Australia with similar attitudes, and what has happened there?

Is there a power plant left in NZ that is owned by the public?

Aside from that, the last thing Iwant to see is a dead ANZ. Just get off your high horse about the Aussie imperialists and see the writing on the wall.

Little country with nothing left and needs big guy support.

Lets start printing ANZ currency.

mb

 
Guest

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 9:58 pm

I forgot to add that Kiwi fundamentalism or *balls to be aussies* killed off one of our premier airlines....

small country with an attitude problem..

*shame of the pacific*

Hoo roo

mb
 
Air Taiwan
Posts: 1498
Joined: Fri Dec 03, 1999 3:06 pm

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 10:10 pm

Apparently, the *VOTERS* don't want the deal -- THAT is the problem here Dave!

You see -- QF/NZ tie up, prices "may" not go up
no QF/NZ tie up, prices "will" not go up

Let's get this right, QF can't fail (due to Oz govt), Air NZ can't fail (due to Kiwi govt), so what's the big deal here??? Do the *REALLY* need an alliance?? (apart from saving a few thousand dollars a year that goes directly into the directors' pockets)

Jimmy
 
pacificjourney
Posts: 2659
Joined: Wed Jul 04, 2001 9:12 pm

RE: Accc Says NO To Qantas/Air New Zealand

Wed Sep 10, 2003 11:09 pm

Mx 5 boy don't you think basket case is a bit strong ? Admittedly no Asian Tiger but hardly one foot in the grave. On what do you base your expert opinion other than an obvious interest in liquidity on the NZX ? Please inform what other economies you regard the same, presumably Australia being one of them.

Power stations in NZ are in public hands - the share holding public - and the railways now actually make money (for their shareholders) instead of eating it, to say nothing of doing a much MUCH better job. It's known as a liberal economy and is responsible for the lower costs of operation for ANZ re QF as outlined in post 43. If Australia was the free place it always claims then front up to an open skies policy, but no that would be competition for QF wouldn't it.

While you are there read about the relative profits and cash on hand between the 2. I don't think there will be any more public money required for ANZ any time soon. Who is really the subsidised flyer in this story ?
" Help, help ... I'm being oppressed ... "
 
Lufthansa
Posts: 2303
Joined: Thu May 20, 1999 6:04 am

RE: Accc Says NO To Qantas/Air New Zealand

Thu Sep 11, 2003 12:14 am

mX5.....That was a very harsh swipe at the Kiwi's.
Now we all have heard of the book "the ugly American"...
for certain reasons...and I don't want to see a book
published called "the ugly Australian" because that exact treatment of NZ are the type of attitudes that gave so many good americans bad names....

Yes, New Zealand has had its problems. But, they are improving. They're
a very small country, that used to once have a very big export industry to the UK that was swept away from it thanks to the EU, and that takes a while to get over. Yes, there were governments that caused problems...but its not like that hasn't happened in Australia either. It's not like Australia isn't built on foreign investment either! The only thing saving Qantas is a little piece of legislation that Paul Keating passed because he thought he wouldn't be able to do it if he didn't.[privatise QF] And if you want to blame somebody for Ansett's Demise, how did it all start? How did the once biggest airline in Australia (in terms of number of planes, and passengers carried, Not ASMs) get so far behind?

Go back to the early nineties. Ansett was the business travelers FIRST choice. It was by far the most popular, and its Golden Wing lounges and Frequent flyer programs were considered the best in the country. It was always the leader of change too...First with 767 in Australia. First with 737-200, before the 737-300, launch customer of the A320-200, (AF was 320-100)
And it used to be the only airline to fly many places...like throughout Western Australia.
So, How did it go wrong? The Australian Labour Party decided to finance its deficit's by first, selling Australian Airlines (the first) to Qantas, and then later floating the whole thing. So, poor Ansett all of a sudden, had to compete with a company twice its size that had a global network that would appeal to Frequent flyers, and a very patriotic brand. Something it never had to do before (and remember it wasn't allowed to fly globally at this stage...that was for the exclusive domain of Qantas, as the chosen instrument....kind of the same way aeroflot was) That was the beggining of the end for Ansett! Air New Zealand...although not exactly helping...really bought a company that was already in trouble. This is another post in itself...im not going to go here...but lets just say that if Mr Keating had decided to priviatise both Australian Airlines and Qantas seperately....and give all three the right to fly domestically and internationally, Im sure you'd see a very different market place today. That would have been a far fairer move.

As for the rest of NZ...well their a small country and are never going to be an economic superpower...but things are improving and lately their currency has been strong, around equal value to the Australian dollar, yet their cost bases remain lower. Their big problem is a brain drain...and Australia is also facing that to a lesser degree, but, that is actually going to benifit Air New Zealand!
You know, Air New Zealand might just do okay inside Australia. I can see Australian business people taking to new A320s with say PTVs in every seat and a simple straightford service...say, snacks like SAS serves with say, complimentry liqour. And if you got Kiwi crew to fly it, you did your heavy maintaince in CHC and just stuck to peak east coast routes...you could produce a better prodcut than Qantas has for a lot lower price. Plus we would have a star alliance carrier in Australia again and singapore air and United would be very happy about that. Now its never going to get to say, equal market share with QF...but it might be able to carve out enough to be viable. Afterall....there are Kiwi's who fly inside New Zealand on an Australian carrier, and they've had that option since about 1987 i think?
So i wouldn't be so mean to them.
 
Guest

RE: Accc Says NO To Qantas/Air New Zealand

Thu Sep 11, 2003 8:51 pm

Lufhansa,

Your dreaming mate. Aussie business people taking to the A320? No-one in my office will fly NZ, internationally (or domestic if they attempted that). Their business product isn't up to it.

As for the NZ economy, yeah the basket case of the pacific. Why do you think QF + DJ are baseing their TT airline ops in NZ? Because they can screw the populace for cheap wages.

Brain drain? Exactly, and it will continue. Who wants to live in a shithole when they can live in say Sydney, Brisbane, Perth or Melbourne and earn twice the money for what they do and have twice the lifestyle? (Compared to NZ?)

Oh, a Kiwi friend has just arrived at my place.. Who happens to agree with me.

hoo roo!

mb
 
aerokiwi
Posts: 2253
Joined: Sun Jul 30, 2000 1:17 pm

RE: Accc Says NO To Qantas/Air New Zealand

Thu Sep 11, 2003 8:57 pm

Heheheh, MX5_boy, you're always good fodder for proving a point.

I wouldn't dare question the amazing intellect of an "International Equites Trader" (I like the 'international' bit, by the way, makes it sound very important). Perhaps if you considered your statements, you would realise that the NZ sharemarket has outperformed most (Australia's too? I don't know) in the world over the last 3 years. Sure it's not huge, but tidy profits nonetheless are available to be made.

And since when has bigger been better? I'm amazed that someone with the responsibility you have presumably been given has not been able to digest this fact of life. Though, looking at threads that label free-market defending authorities such as the ACCC as "communistic" goes a long way in explaining things.

Bigger is not always better. Sometimes it is, but in the airline industry especially, it is blatantly obvious that the big boys aren't always the winners at the end of the day (a la United, AA, BA, JAL, Air Canada, US Airways etc etc).

In any case, I enjoy these sporadic rants. They help one to remember how lucky we are to live at the end of the world, with a healthy, liberalised economy (NOT based on property speculation), a respected international reputation and an airline that keeps going from strength to strength. New aircraft, lower costs, greater efficiencies, added with new business practices will further strengthen Air NZ's position.