In another watershed event for Qantas alliances, a New Zealand court has ruled against the Australian carrier and Air New Zealand (ANZ) on appeal from denial of their proposed merger. This follows Canberra's recent decision allowing British Airways and Qantas to renew their alliance, which then prompted BA to sell its Qantas stake.
The New Zealand court ruling is effectively the death-knell for the proposed ANZ-Qantas merger, which featured a planned Qantas stake in ANZ and jointly co-ordinated fares, routes, and capacity. New Zealand and Australian competition regulators each ruled last year that the anti-competitive effects of this proposal outweighed its benefits.
The airlines appealed both outcomes. The court's decision is the first ruling on those appeals. A separate appeal is pending in Australia, but the proposed merger requires approval in both countries.
"We need to move on," says Geoff Dixon, Qantas chief executive, conceding that Qantas will forego further appeals. ANZ has not rejected the possibility of appeal to a higher New Zealand court, but local sources suggest it is unlikely to go ahead by itself. Ralph Norris, ANZ's chief executive, admits that the planned Qantas alliance is probably at "the end of the line".
Norris still holds some hope that the remaining appeal in Australia might reach a different result, which could allow ANZ and Qantas to co-operate in markets affecting Australia but not New Zealand. Currently, however, both airlines do not operate in any such markets.
A more likely prospect is for them to co-operate in ways the regulators would accept. The two carriers already have a joint ticket processing facility in Fiji, and are looking at joint engineering purchases and a common inventory pool. Norris also foresees some joint marketing. With a strategic alliance effectively dead, such plans are the only remaining options open to the carriers.
Source: Airline Business
