Competition body deals blow to Qantas/ ANZ plans
An alliance between Australian carrier Qantas and Air New Zealand now looks unlikely following the rejection of the plans by the Australian Competition and Consumer Commission (ACCC).
The ACCC said this was its “final decision” with its chairman Graeme Samuel stating that the “proposed alliance would be highly anti-competitive and offer little benefit to the Australian public”.
The commission pointed out that the trans-Tasman route accounts for 16% of all travel to and from Australia, with the two airlines for some time being the only effective competitors on the route. It said that while it was aware that Emirates had recently entered the market and Virgin Blue was about to do so, it did not agree that they provided “an immediate effective competitive constraint on the proposed alliance.”
Mr Samuel said that if industry or market circumstances were to change the ACCC might at some future point reach a different conclusion. But he pointed out that – unlike many other carriers – both airlines are “performing strongly and profitably”, with “neither airline..realistically in danger of failure even in the medium term. “
Qantas chief executive Geoff Dixon accused the ACCC of not properly considering new information following its draft determination in April 2003. He claimed the commission had not “adequately [considered] the significant further changes in our industry, including in our region, over the past five months.” Qantas has recently announced plans for a massive shake-up which are designed to cut costs by Aus$1billion.
The two airlines now plan to appeal to the Australian Competition Tribunal.
In New Zealand the Commerce Commission is expected to give its verdict on the proposed alliance later this month.
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