Air NZ still needs a plan b, says employer-manufacturer group

By NZPA

Monday 13th January 2003

United Airlines's withdraw from New Zealand was a timely reminder to Air New Zealand to work on an alternative plan to its proposed alliance with Qantas, the Employers & Manufacturers Association (Northern) (EMA) said today.

EMA chief executive Alasdair Thompson said tourism and air freight dependent traders wanted to see the development of a Plan B for Air New Zealand for two to three years time.

"At the moment there isn't one."

"If the world economy fails to lift, and Air New Zealand fails to attract sufficient capital to maintain its international operations, its demise as an international airline is on the cards.

"The deal with Qantas is an interim step towards the longer term stability of Air New Zealand though still subject to the approval of our Commerce Commission and the Australian Competition and Consumer Commission (ACCC), which is likely to be tougher than our regulators.

"Even assuming the deal with Qantas is approved, which is by no means certain, Air New Zealand still needs Plan B for its mid term sustainability to reassure investors in our tourism and air cargo industries."

United, which filed for bankruptcy protection just over a month ago, on Friday announced it was quitting the Auckland-Los Angeles route, leaving air traffic between New Zealand and North America entirely in the hands of Air New Zealand and Qantas.

Air New Zealand and Qantas could expect demand for their services to pick up in the short term, he said.

"However other carriers such American Airlines or British Airways could enter the US leg to capture some of the freight and passenger demand vacated by United, and this would be more likely if Air New Zealand failed to retain competitive rates."

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