Air NZ close to deal with Qantas
Air New Zealand and Qantas appear to be close to agreement to merge their Tasman operations in the face of record fuel costs and huge losses on the route.
An anti-competitive alliance covering all international and domestic services was rejected by competition watchdogs in Australia and New Zealand in 2003.
Australian authorities have since approved the deal on appeal, but the High Court in New Zealand did not.
Wellington sources said they knew of a plan for the two airlines to work together more closely, including code-sharing.
The airlines may also share maintenance and ground handling services.
An airshare agreement would circumvent the Commerce Commission and could be approved by the Ministry of Transport within three months. Both the ministry and the Commerce Commission said they had not yet been notified of a deal.
Air New Zealand, which has till recently freely discussed ongoing talks with Qantas, this week put the shutters up saying "it would be inappropriate for Air New Zealand to comment", when asked if a deal had been struck.
However, chief executive Rob Fyfe said in Australia earlier this week that Qantas and Air New Zealand were "practically code-sharing on the Tasman in the 1990s and that worked quite effectively". The 1990s code-sharing arrangement ended acrimoniously after six years in 1997.
Mr Fyfe recently said that the airlines had continued to talk about "collaboration" on the Tasman, but that progress had been slower than he and Qantas boss Geoff Dixon would have liked.
Any new agreement is likely to centre around a similar airshare arrangement through which the airlines sell seats on each other's aircraft. This would allow them to replace competing flights that departed within minutes of each other with a single, possibly larger aircraft.
A merger on the Tasman would give the airlines a combined market share of about 80 per cent. But the Australian Competition Tribunal, in overturning the original alliance decision, said increased competition from Dubai-based Emirates Airline and budget airline Pacific Blue was enough to keep anti-competitive behaviour in check.
The Tasman is one of the most competitive routes in the world with 11 airlines vying for passengers.
Mr Fyfe has said Air New Zealand and Qantas were between them flying the equivalent of 11 empty 146-seat Airbus A320 jets across the Tasman every day.
The introduction of Qantas's budget airline Jetstar on the Tasman and Air New Zealand merging its low cost Freedom Air A320 fleet with its main fleet had made it more difficult to reach agreement.
Forsyth Barr head of research Rob Mercer said the two airlines would try to increase passenger numbers on the Tasman because that fed their profitable domestic networks, Mr Mercer said.
"So it could lead to better pricing. The more people they get flying to New Zealand, the more they pick up on the domestic routes, the more money they make."
mmm heard about that... see if it goes anywhere this time
Weren't BA and Amercian Airlines supposed to merge at one time?? 😀
😀 😀 😀
Ahhhh BA and AA - what a partnership......
Interesting article. It might not be that good for the customers though 😕
Yeah I saw that in the news as well. Interesting news, I guess it would make sense to try take on Emirates and Virgin Blue, but I hope they would keep the ANZ interiors. 😀