QAN 0.56% $5.35 qantas airways limited

Something in the Air NZ

  1. 1,155 Posts.
    Something in the Air NZ
    October 12 2002

    Ever so subtly in the past week the debate about a Qantas/Air New Zealand alliance has switched from whether the two airlines will strike a deal to the question of when they'll announce it.

    There's now little doubt that Qantas will pay up to $520 million for a 25 per cent stake in its trans-Tasman rival. Given a potential $300 million in synergies available to the carriers, the rationale behind the deal, and the rewards, is too compelling for either Qantas's Geoff Dixon or Air New Zealand's Ralph Norris to walk away.

    There's a belief the airlines will announce their alliance at Air New Zealand's annual meeting on October 29, or before.

    Dixon isn't expected to deliver the news at the Qantas AGM in Perth this Thursday for obvious political reasons. Qantas doesn't want to be seen to be stealing the show, given the issue is so sensitive in New Zealand.

    The only unknown is whether the Australian Competition & Consumer Commission and New Zealand's Commerce Commission will approve the deal. Don't forget, either, that the US Justice Department also will have its say, given the alliance involves two of the three main carriers on the Australia/US route.

    Qantas shares were up 6c to $3.67. Air New Zealand was 2.5c stronger at 47c.

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