Government flies Qantas

By Jock Anderson

Friday 22nd February 2002

After sacrificing $1 billion of taxpayer's money to rescue Air New Zealand, the government is flying Qantas because it is cheaper.

Qantas has just sewn up a one-year contract to fly as many as 11,000 Defence Force staff around New Zealand.

Qantas is pleased with the deal and is actively chasing other government work.

A spokesman in Prime Minister Helen Clark's office said the government had no particular loyalty to Air New Zealand. Air New Zealand would stand or fall on its commercial merits, the spokesman said, and ministers and members of Parliament could use whatever airline best suited their needs.

The government earlier pledged to put $885 million into Air New Zealand, followed by a further $150 million as required.

Air New Zealand increased some of its fares by 10% in January. The fare increases were followed by a "take no prisoners" stance of Qantas chief executive Geoff Dixon, reported saying he wanted to put Air New Zealand out of business.

A Qantas marketing source in Auckland said the latest contract included international travel and was also likely to include travel for Defence Minister Mark Burton and defence ministry staff.

A Defence Force spokesman said the contract, which would see the Australian airline flying soldiers, sailors and airmen on main trunk routes, went to Qantas in an open tender process.

The spokesman said the contract did not include international travel or travel for Mr Burton or the Defence Ministry.

Sources within Qantas suggested the Health Ministry might be next to sign up.

Air New Zealand public affairs manager David Beatson said it would be good if government departments always flew with Air New Zealand "but that's not the way it works. It should be competitive and we cannot expect preferential treatment," Mr Beatson said.

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