Air New Zealand's (ANZ) future partnership, whether with Qantas or Singapore Airlines (SIA), has taken on a decidedly political hue.
After a meeting on 31 July, the Australian and New Zealand governments are to mull the long-term future of the Australasian aviation market and decide ANZ's future by early September to ensure a balanced, competitive market.
Both sides want to ensure an open market while securing the future of ANZ and Ansett. A joint working party will examine the issue before reporting to ministers on both sides of the Tasman by late August. This will enable decisions to be made before ANZ releases its full-year results, expected to show a loss, in early September.
ANZ wants state-imposed ownership caps lifted, so SIA can increase its 25% stake to 49% and help the struggling carrier secure much-needed capital for new aircraft and new products. ANZ has rebuffed Qantas' offer to take a stake in the airline and put SIA in control of Ansett.
"I should emphasise that both governments have an interest in this issue and one of any number of possible changes to Air New Zealand will involve regulatory approvals on both sides of the Tasman. So this is not purely an issue for the New Zealand Government," says the country's finance minister, Michael Cullen.
One aspect of particular concern to New Zealand remains trans-Tasman competition, which could be threatened by the SIA and Qantas proposals, says Cullen. This may help Virgin Blue's application to operate trans-Tasman services now being considered with the New Zealand Government. Landing rights also need to be safeguarded, as does ANZ's crucial role in transporting tourists.
Australia's transport minister John Anderson has strong reservations about SIA's bid: "We are concerned that its current proposal could produce an unhealthy imbalance in the global, regional and Australian aviation markets."
Australia is wary of a powerful carrier emerging from the fusion of different airlines which could overwhelm Qantas. To avoid this, Anderson prefers SIA to take over Ansett. "We think that is potentially in everyone's interests and we would welcome that."
Cullen reiterated New Zealand's strong reservations about the SIA bid for a 49% stake, but was careful not to rule it out, only suggesting it may need modifying.
Both governments are also concerned about competition issues raised by Qantas' proposal. But if Qantas can address these concerns, Anderson thinks its plan will provide a better competitive balance.
Source: Flight International
