Kevin O'Toole/LONDON
AIR NEW ZEALAND (ANZ) remains optimistic that it can go ahead with the proposed deal with TNT to acquire up to half of Ansett Australia.
The agreement with TNT, which owns half of Ansett together with News Corporation, is still under negotiation, but has yet to clear tough competition hurdles in Australia and New Zealand.
ANZ management, nevertheless, believe that the $300 million deal can go through. "The directors remain optimistic that, the continuing negotiations will result, in the acquisition of a substantial interest in the company", says ANZ chairman Bob Matthew and managing director Jim McCrea, in the airline's half-year report.
ANZ's long-running efforts to buy into Ansett hit another problem at the end of January, with an initial ruling from New Zealand's Commerce Commission that the deal offended the country's strict competition laws.
The Commission can still allow the deal to go through, provided that the airlines can prove that a merger would benefit consumers.
The concern surrounds the dominance that ANZ would hold in its domestic market when combined with the Ansett New Zealand operation. In its first-half report, ANZ says that its current domestic operations, which account for about one-fifth of group sales, give it a market share of around 70%.
Negotiations are continuing, with the Commission over possible compromises, including the possibility of separating out the Ansett NZ operation. A final decision is expected on 20 March.
Overall, ANZ held its performance steady over the six months to the end of December. Net profits edged down a little, to NZ$135 million ($91 million) in 1995, largely because of weaker growth from in-bound tourist traffic.
In-bound tourism, which makes up the largest slice of ANZ's traffic, had been growing at more than 14% in 1994, but that growth has slowed to around 6.5% over the past year. The number is now on the rise again, and the airline expects this to show through in a stronger second half. Over the half year, the airline saw a 17% increase in international seat capacity.
Source: Flight International
