Ansett still keen on Hazelton

By Phil Boeyen, ShareChat Business News Editor

Thursday 21st December 2000

Air New Zealand (NZSE: AIRVA) subsidiary Ansett Australia is likely to try to allay regulatory fears over its bid for New South Wales regional carrier Hazelton Airlines.

Ansett has been in a bidding battle with Qantas for Hazelton, last offering A$1.35 a share. However Australia's competition watchdog ACCC (Australian Competition and Consumer Commission) says it would oppose any takeover by either of the airlines.

The ACCC says Hazelton Airlines accounts for almost one third of all regional passengers carried in New South Wales, and even higher shares on specific routes.

It says if Qantas gained control of Hazelton it would account for 60% of the NSW regional air services market while if Ansett gained control it would account for 62%.

The watchdog is also worried about the lucrative landing and take-off slots at crowded Sydney Airport, which are seen as the driving motivation behind the takeover offers.

"If Qantas gained control of Hazelton it would control 55% of the landing/takeoff slots which are specialty classified for regional air services at Sydney Airport. If Ansett gained control, it would control 50% of these slots."

"The ACCC is concerned that should Qantas or Ansett gain control of these slots, the ability of the acquirer to swap the regional slots may lessen competition in both regional and interstate markets. The holders of these scarce slots may be able to significantly expand capacity while other competitors will be constrained in their ability to provide additional competing services".

Ansett spokesman Ron Rosalky says his airline is seeking advice and further information from the ACCC and, subject to those discussions, remains committed to proceeding with a bid.

"Ansett has a long-standing commercial relationship with Hazelton and we remain absolutely committed to the integrity of that airline and the services it provides to regional New South Wales," he says.

Qantas, which is considering a higher bid for Hazelton, has also said it wants to proceed with an acquisition despite the concerns of the ACCC.

Hazelton's board has recommended its shareholders accept the Ansett offer of $1.35 per share unless a higher price has been offered by Qantas by December 28th.

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