Paul Phelan/CAIRNS
NEW ZEALAND'S Commerce Commission has rejected Air New Zealand's plan to acquire up to 50% of Ansett Holdings. The scheme foundered on the monopoly effect the deal would have on domestic services in New Zealand.
Air New Zealand managing director Jim McCrea says that "...we are still committed to securing an influential stake in Ansett Australia". The airline is considering challenging the decision.
Ansett shareholder News Corporation says that it is considering separately buying out the interest of co-shareholder TNT in Ansett New Zealand as a way of processing the tie-up.
Commission chairman Dr Alan Bollard says that the plan has been rejected because "...we are not satisfied that Air New Zealand and Ansett New Zealand would not acquire a dominant position in the domestic air-services markets if this acquisition went ahead. The Commission requires public benefits to outweigh the detriment likely to arise from the acquisition, and, in this instance, it is not satisfied the benefits likely to accrue are such that it should be permitted."
The Commission says that the deal would give Air New Zealand and Ansett New Zealand almost 100% of the domestic market.
Air New Zealand had proposed a joint-venture structure isolating Ansett New Zealand from Air New Zealand, preventing the two parties from being "associated" under regulatory definitions.
The submission also says that the threat of entry to the main trunk passenger market, in the form of cabotage by an international carrier, would constrain the two companies.
Nevertheless, the Commission is "...not satisfied that the likelihood of such entry is great enough to constrain them, or that such entry would be timely". Australian rival Qantas has said that it will not be a major entrant on New Zealand domestic routes.
Source: Flight International
