Mav747
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ANZ/EK - Synergies?

Tue Oct 31, 2006 11:05 am

ANZ has returned from the brink of bankruptcy in 2001 and returned to financial health and profitability. EK has shown cursory interest in New Zealand (through sponsorship of Emirates Team New Zealand and dedication to AKL-MEL, AKL-SYD, AKL-BNE and CHC-MEL routes). Could EK be courting a stake in ANZ in the near future? ANZ would be an attractive target for EK (especially given that it has built up a considerable financial warchest):

- entry into the Star Alliance network (without having to join itself)
- ANZ only star alliance member to operate HKG-LHR
- ANZ launch customer for 787
- ANZ various landing rights in asia/south pacific, which are out of reach for EK at the present time
- speculation that EK is growing frustrated with Airbus, and seemingly has a preference for 777 over the A340 and could use the not inconsiderable options that ANZ has with boeing as leverage for its own deal with 787, 748 (granted EK has a large number of 777 options)
- entry into the North American market where ANZ has landing rights at LAX/SFO/HNL (EK also operates MEL-AKL, SYD-AKL, which could offer feeder service to NZ6/NZ8 to LAX/SFO on a codeshare basis)

Please would love to hear anyones views on this (don't want it to turn into an Airbus-Boeing war), and is my first post!

Thanks and regards
Mav747
 
HKGKaiTak
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RE: ANZ/EK - Synergies?

Tue Oct 31, 2006 11:32 am

Welcome to a.net mate.

Interesting thoughts, although QF might not be too keen on having EK to deal with in New Zealand as well, after all QF-NZ want "co-operation".

And EK can't buy too much of NZ given the foreign ownership cap.

But, doesn't NZ have the rights to fly domestically in Australia? And I understand there aren't any caps on how many flights they can fly internationally out of Oz? Looking at it in this perspective, NZ could be an excellent vehicle for EK's expansion into the market Down Under. But that would take rather a lot of capital investment, and a lot of luck, against a dominant carrier.
4 Engines 4 LongHaul
 
Motorhussy
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RE: ANZ/EK - Synergies?

Tue Oct 31, 2006 11:39 am

While the notion has merit, I think EK's plan is for global conquest without alliance (therefore without compromise). Their sole motivating strategy is to get people to and from Dubai as part of the Emirate's strategy to make itself the cross-roads of the world once fossil fuels are exhausted as an income. Tourism and trade are to be their commerce of the future and I don't think NZ in any way fits with that plan.

BTW, ANZ is a bank, NZ is an airline.

Regards
MH
come visit the south pacific
 
VHVXB
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RE: ANZ/EK - Synergies?

Tue Oct 31, 2006 11:42 am

Quoting HKGKaiTak (Reply 1):
But, doesn't NZ have the rights to fly domestically in Australia?

Correct

Quoting Mav747 (Thread starter):
- entry into the North American market where ANZ has landing rights at LAX/SFO/HNL (EK also operates MEL-AKL, SYD-AKL, which could offer feeder service to NZ6/NZ8 to LAX/SFO on a codeshare basis)

I think NZ has enough feeder traffic to fill its flight to the US

Quoting Mav747 (Thread starter):
CHC-MEL

This route does not exist anymore with EK it was dropped in favour of SYD-CHC
 
Mav747
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RE: ANZ/EK - Synergies?

Tue Oct 31, 2006 12:11 pm

Thanks for those responses.

Quoting HKGKaiTak (Reply 1):
And EK can't buy too much of NZ given the foreign ownership cap.

Is this some sort of legal requirement?
 
planemanofnz
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RE: ANZ/EK - Synergies?

Tue Oct 31, 2006 12:22 pm

Although it would be fantastic if it would happen, it won't. EK wants to expand from AKL however at the moment they have to fly via Australia to keep yields high. Australia has imposed restrictions on EK therefore EK can't get any more flights to New Zealand for the time being e.g- they were denied DXB-PER-AKL.

In the future once EK's loads are a bit higher on it's NZ-Australia routes, it will look at Dubai-Asia-Auckland or Dubai-Auckland non stop, but at the moment, loads don't require these flights. Therefore, there would be little or no connecting traffic onto services to the Pacific Islands and other places.

EK will expand from AKL without NZ's help. It will just take time.
 
Mav747
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RE: ANZ/EK - Synergies?

Tue Oct 31, 2006 12:38 pm

Are there any landing rights that NZ has that EK may be interested in (whether on a yield or strategic basis)? If so what are they? Do you think that a stake in NZ may be an entry point for EK in this regard?
 
ZKNBX
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RE: ANZ/EK - Synergies?

Tue Oct 31, 2006 1:56 pm

Quoting Mav747 (Thread starter):
Could EK be courting a stake in ANZ in the near future?

Aint likely to happen sorry. Don't believe the NZ govt would allow it. Not enough competition as it is.
 
Mav747
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RE: ANZ/EK - Synergies?

Tue Oct 31, 2006 2:07 pm

Thanks ZKNBX, I think you have raised very valid points - but do you think that it is arguable from EK's point of view that their transtasman flights are a "clip on" to the SYD/MEL-DBX routes and that, if anything, will give cause to QF to undercut on prices (a EK/NZ marriage is a far less daunting proposition than a QF/NZ marriage in terms of competition)?
 
kaitak744
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RE: ANZ/EK - Synergies?

Tue Oct 31, 2006 2:19 pm

Quoting MotorHussy (Reply 2):
Their sole motivating strategy is to get people to and from Dubai as part of the Emirate's strategy to make itself the cross-roads of the world once fossil fuels are exhausted as an income.

Thats interesting. So, fossil fuels die out, Dubai grows...... how will EK's planes fly?  Wink

(By the way, the United Arab Emirates (and Qatar) are not oil rich countries. They do have oil, but not to the extent of Saudi Arabia, Kuwait, Iraq, or Iran.)
 
ZKNBX
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RE: ANZ/EK - Synergies?

Tue Oct 31, 2006 2:25 pm

Quoting Mav747 (Reply 8):
but do you think that it is arguable from EK's point of view that their transtasman flights are a "clip on" to the SYD/MEL-DBX routes and that, if anything, will give cause to QF to undercut on prices

Yes... your analysis is tempting, but QF ain't undercutting on prices (and can't on service for the most part). Both QF and NZ have significant frequency advantages over EK. An EK NZ marriage... seems unlikely because EK are not pro alliance, and the alliance climate is changing and potentially less attractive (see United CEO's recent comments) and indeed Air NZ's recent actions... I'm not saying it's impossible, just that I don't see it as likely for the reasons you've stated, given NZ's good financial position. Actually, there are calls in NZ at present for the govt to pick up the remaining stake in NZ at present...
 
Mav747
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RE: ANZ/EK - Synergies?

Tue Oct 31, 2006 2:31 pm

Thanks for your thoughts ZKNBX. I guess part of my argument is that if EK are not pro alliance, and cannot get landing rights in high yield/strategic destinations, a possible way to do so is through a stake in NZ and subsequent agreement whereby NZ sells seats on their planes to EK customers.

Agreed however that the the government may be very reluctant to let this one go.

Regards
 
VHVXB
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RE: ANZ/EK - Synergies?

Tue Oct 31, 2006 2:53 pm

Quoting Mav747 (Reply 11):
landing rights in high yield/strategic destinations

which destinations are you trying talk about here??
 
Mav747
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RE: ANZ/EK - Synergies?

Tue Oct 31, 2006 3:05 pm

For example, AKL-LAX, LAX-LHR (which would also be strategically significant for EK).

HKG-LHR would be a significant stategic code share for EK with NZ - however this may place strain on the NZ-Star Alliance relationship given that the NZ is the one of the few (if only?) Star Alliance carrier on this route.
 
VHVXB
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RE: ANZ/EK - Synergies?

Tue Oct 31, 2006 3:29 pm

Quoting Mav747 (Reply 13):
For example, AKL-LAX

In relation LAX-Aust/NZ flight EK expressed its not interested
http://www.theaustralian.news.com.au...ory/0,20867,20588293-23349,00.html

Quoting Mav747 (Reply 13):
HKG-LHR would be a significant stategic code share for EK with NZ - however this may place strain on the NZ-Star Alliance relationship given that the NZ is the one of the few (if only?) Star Alliance carrier on this route.

It Is the only *Alliance carrier on this route. Beside EK has multiple flights to the UK and to HKG everyday
 
Motorhussy
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RE: ANZ/EK - Synergies?

Wed Nov 01, 2006 2:44 am

Quoting Kaitak744 (Reply 9):
Thats interesting. So, fossil fuels die out, Dubai grows...... how will EK's planes fly?

Yes, when Dubai's supply runs out, not the entire supply. This is predicted to be in or around 10 years at current production rates.

Source: http://en.wikipedia.org/wiki/Economy_of_the_United_Arab_Emirates

Quoting Kaitak744 (Reply 9):
By the way, the United Arab Emirates (and Qatar) are not oil rich countries.

No, not in comparison to the Saudi's etc, but wealth is a relative term.

MH
come visit the south pacific