Qantas to call New Zealand home in Ansett rebranding

By Graeme Kennedy

Friday 30th June 2000

Franchising the Qantas brand to Ansett New Zealand's new owners was the best of three options for the Australian carrier to enter the New Zealand domestic market and extend its network to both sides of the Tasman.

Qantas had considered buying Ansett New Zealand or starting operating here in its own right but rejected both proposals as too expensive.

"We would have liked to have bought the airline but we were not prepared to pay the price," Qantas deputy chief executive Geoff Dixon told The National Business Review at the Qantas New Zealand launch this week.

"We ended up not having to pay the premium, so this is a very good arrangement for both parties.

"The franchise is our first in the world and a coup for the airline's owners as it brings with it Qantas' muscle as the world's 11th-biggest carrier and 80 years of expertise in the business.

"Qantas New Zealand is the only truly seamless airline in Australasia with one brand providing travel within New Zealand and Australia, transtasman and to every part of the world with Qantas and our Oneworld alliance partners.

"And we get reinforced and extended Qantas branding in the New Zealand and Pacific markets and a stronger passenger feed - we already had a commercial association with Ansett New Zealand, but without the cement around it, it was not as strong as we needed."

The deal, first revealed in NBR on May 12, is initially for seven years with a right of renewal which Qantas chief executive James Strong said was expected to be exercised.

Mr Dixon said Qantas' involvement brought a critical mass the New Zealand carrier would not otherwise have gained.

"New Zealand is a tough market," Mr Dixon said. "Ansett New Zealand was car-rying about two million passengers - a bigger market than Western Australia - and our 160 flights a week across the Tasman make it a sizeable business with sizeable revenues.

"This is a business deal. We've sold the franchise licence and that means fees to us but it is up to management here to run their own company."

Ansett New Zealand was purchased from 100% owner News Ltd in March by a group of New Zealand businessmen and the airline's Australian chairman, Ken Cowley, in a deal put together by Auckland merchant bank Clavell Capital and its executive chairman David Belcher.

Mr Cowley remains chairman with Mr Belcher his deputy while chief executive Kevin Doddrell continues in his role and becomes a board member.

The carrier will operate as Tasman Pacific Airlines of New Zealand Ltd under the Qantas franchise which will include the Australian airline's livery on its fleet of BAE 146 jets and Qantas uniforms for cabin crew.

No job losses are expected, although sales and marketing of both carriers will be integrated.

Meanwhile, Air New Zealand has completed its purchase of Ansett Holdings Ltd with a $A580 million payment to News Corp to secure the 50% of the company it did not own.

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