Air New Zealand is believed to be close to deciding on a bold strategic move towards domestic operations in Australia, despite Canberra's shock decision late last year to abandon the proposed Australia-New Zealand single aviation market.
Sources say ANZ majority shareholder Brierley Investments Ltd is considering two options, an equity stake in Ansett Australia or a new airline which would have a majority Australian shareholding, overcoming foreign ownership rules. BIL has talked in Australia with local investors who would put up most of the cash for an ANZ-run domestic carrier.
Either option would seal the fate of Qantas' 20 per cent stake in the carrier, probably forcing Qantas, whose managing director James Strong is on the board of ANZ, to sell its stock back to BIL. Sources at the Auckland-based flag say its managing director Jim McCrea remains furious at the pivotal role Qantas played in Australia's decision to drop the single market concept just days before ANZ was due to gain domestic rights.
One way or another, ANZ is making it clear that it intends to get a foothold in Australia's domestic skies. Both BIL and Ansett are remaining tight lipped on the progress of equity discussions, but intensive meetings are known to have taken place and McCrea has confirmed an Ansett stake is a definite option.
Even without equity, the two carriers will almost certainly forge commercial links likely to include frequent flyer and marketing arrangements. ANZ would also provide the trans-Tasman air link for Ansett between its separate domestic operations in Australia and New Zealand, completing a network gap the Melbourne-based operator desperately wants to close.
The New Zealand government is also understood to be keen to see the country's airline return to totally local private ownership in the wake of the soured aviation relationship with Australia.
BIL will take a significant step in that direction in April when it pays US$65 million in cash for the 5 per cent stake currently held by Japan Airlines, taking its stake to 42.5 per cent. Its 71 per cent voting rights remain unchanged. JAL is selling to enable it to report a profit in 1994/95 and help rationalise its asset base, realising it can continue a relationship with ANZ on a cooperative commercial basis without equity involvement.
JAL bought its shares in a joint bid with Qantas and American Airlines when ANZ was privatised, to stop British Airways buying into the NZ flag. American sold its holding three years ago.
JAL bought its shares in a joint bid with Qantas and American Airlines when ANZ was privatised, to stop British Airways buying into the NZ flag. American sold its holding three years ago.
Source: Airline Business
