Qantas threats 'nothing new' - Air NZ

By Phil Boeyen, ShareChat Business News Editor

Monday 4th February 2002

Reports that Australian airline Qantas has a battle plan to sink Air New Zealand (NZSE: AIR) are not fazing the New Zealand carrier, which describes such threats as nothing new.

Media reports say that Qantas plans an aggressive push on New Zealand domestic and transtasman routes, but Air New Zealand is promising to defend its markets vigorously against any attack.

"The only surprise this time is that they are actively seeking a damaging and costly battle on two fronts - with the imminent introduction of additional competition from a revived Ansett in their home market, and stronger competition offshore from a recapitalised Air New Zealand," says Air NZ chairman John Palmer.

"Over the last three months, we have been preparing for more aggressive competition. Our senior management has been formulating new business strategies, work that was initiated last year and, by coincidence, it is meeting again today to continue that process. Naturally, we aren't going to signal our intentions - but you can expect to see us rolling out the results over the next few months."

Following the state-funded recapitalisation of Air NZ Mr Palmer says the company has repaid all unsecured borrowings and signed heads of agreement with a new banking consortium to obtain significant new facilities.

"Finally, we note that the comments about putting us out of business were reportedly made some weeks ago, and that the chairman of Qantas is now denying them."

There is little love lost between the two airlines, especially since the demise of Ansett Australia, which a number of commentators blame on the protectionist attitude of the Australian government to its partly state-owned carrier.

Qantas currently runs a limited domestic service in New Zealand which it put in place after local airline, Qantas New Zealand, went into receivership.

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