DCF
Mar 29, 06, 7:09 pm
'Devil in plan' of Air NZ-Qantas tie up
Thursday Mar 30 09:50 AEDT
Rival airlines say the devil will be in the detail of a secret plan reportedly hatched by Air New Zealand and Qantas to merge their trans-Tasman operations.
A Dominion Post report today said the pair were close to a deal that would see them work more closely, code-sharing flights in a bid to stave off record fuel costs and huge losses on the route.
Tony Marks, chief executive of rival Pacific Blue, said the move would give Air NZ and Qantas an 80 per cent share of the market. The airlines were likely to offer fewer, larger flights, lessening competition and making price hikes inevitable.
"This particular mechanism has been used before and looks like it is being resurrected from the graveyard," Mr Marks told NZPA.
Air NZ and Qantas had a code-sharing agreement on the Tasman route in the 1990s, although that ended acrimoniously after six years in 1997.
In 2003, competition regulators on both sides of the Tasman rejected a proposal that would have seen Air NZ and Qantas cooperate on all international and domestic services.
Australian authorities approved the deal on appeal saying increased competition from Pacific Blue and Dubai-based Emirates would prevent anti-competitive behaviour.
Here, the original deal was tripped up by the fact that it would give the airlines a monopoly on domestic flights.
Code-sharing deals are relatively common in the airline world. In the United States competition regulators put a ruler over any potential airline tie-ups, insisting airlines must not collude on scheduling or pricing.
In New Zealand, a potential airshare agreement could circumvent the Commerce Commission and could be approved by the Ministry of Transport within three months.
Both the ministry and the commission said they had not yet been notified of a deal.
Air NZ chief executive Rob Fyfe, who in the past has been quite vocal about the airline's ambitions for increased cooperation with Qantas, went to ground this week, declining to comment on whether a deal had been struck.
Mr Marks said Pacific Blue would come out fighting if the deal went ahead.
"We are very pleased with our position on the Tasman. We have carved out a niche in Auckland, Christchurch and Wellington," he said.
"We don't fear a combined Air NZ and Qantas any more than we fear an independent Qantas and Air NZ," he said.
The budget airline is a subsidiary of Australia's Virgin Blue.
The Tasman is one of the most competitive routes in the world, with 11 airlines vying for passengers.
A merger between Air NZ and Qantas would be more complicated this time around than in the 1990s when both carriers offered full service flights on large planes.
Now, both carriers also operate the route using their low-cost, smaller capacity, offshoots, Freedom and Jetstar.
Shares in Air NZ rose a cent to $1.35 in early trading.
That is all we need. Just imagine, you book a SYD-AKL Business Class fare on Air NZ's website, expecting to earn 75 Airpoints dollars each way, only to find that you fly on a Qantas plane so you only get 35 Airpoints dollars each way.
And you end up subject to Qantas' robotic adherence to customer-unfriendly rules re hand luggage, strollers etc.
If I wanted to fly Qantas I would book Qantas.
Thursday Mar 30 09:50 AEDT
Rival airlines say the devil will be in the detail of a secret plan reportedly hatched by Air New Zealand and Qantas to merge their trans-Tasman operations.
A Dominion Post report today said the pair were close to a deal that would see them work more closely, code-sharing flights in a bid to stave off record fuel costs and huge losses on the route.
Tony Marks, chief executive of rival Pacific Blue, said the move would give Air NZ and Qantas an 80 per cent share of the market. The airlines were likely to offer fewer, larger flights, lessening competition and making price hikes inevitable.
"This particular mechanism has been used before and looks like it is being resurrected from the graveyard," Mr Marks told NZPA.
Air NZ and Qantas had a code-sharing agreement on the Tasman route in the 1990s, although that ended acrimoniously after six years in 1997.
In 2003, competition regulators on both sides of the Tasman rejected a proposal that would have seen Air NZ and Qantas cooperate on all international and domestic services.
Australian authorities approved the deal on appeal saying increased competition from Pacific Blue and Dubai-based Emirates would prevent anti-competitive behaviour.
Here, the original deal was tripped up by the fact that it would give the airlines a monopoly on domestic flights.
Code-sharing deals are relatively common in the airline world. In the United States competition regulators put a ruler over any potential airline tie-ups, insisting airlines must not collude on scheduling or pricing.
In New Zealand, a potential airshare agreement could circumvent the Commerce Commission and could be approved by the Ministry of Transport within three months.
Both the ministry and the commission said they had not yet been notified of a deal.
Air NZ chief executive Rob Fyfe, who in the past has been quite vocal about the airline's ambitions for increased cooperation with Qantas, went to ground this week, declining to comment on whether a deal had been struck.
Mr Marks said Pacific Blue would come out fighting if the deal went ahead.
"We are very pleased with our position on the Tasman. We have carved out a niche in Auckland, Christchurch and Wellington," he said.
"We don't fear a combined Air NZ and Qantas any more than we fear an independent Qantas and Air NZ," he said.
The budget airline is a subsidiary of Australia's Virgin Blue.
The Tasman is one of the most competitive routes in the world, with 11 airlines vying for passengers.
A merger between Air NZ and Qantas would be more complicated this time around than in the 1990s when both carriers offered full service flights on large planes.
Now, both carriers also operate the route using their low-cost, smaller capacity, offshoots, Freedom and Jetstar.
Shares in Air NZ rose a cent to $1.35 in early trading.
That is all we need. Just imagine, you book a SYD-AKL Business Class fare on Air NZ's website, expecting to earn 75 Airpoints dollars each way, only to find that you fly on a Qantas plane so you only get 35 Airpoints dollars each way.
And you end up subject to Qantas' robotic adherence to customer-unfriendly rules re hand luggage, strollers etc.
If I wanted to fly Qantas I would book Qantas.