Australia's approval of airline tie-up comes too late
October 12, 2004
Sydney - Australian authorities on Tuesday approved a proposed alliance between airlines Qantas and Air New Zealand - but too late for the deal to go ahead because a New Zealand court last month rejected the tie-up.
The alliance was aimed at allowing the two carriers to cooperate on routes between Australia and New Zealand, but was effectively scuttled by last month's High Court decision in New Zealand. The deal needed approval from authorities in both countries.
The Australian Competition Tribunal on Tuesday upheld an appeal by the airlines against an earlier ruling by the Australian Competition and Consumer Commission that the tie-up would be bad for competition.
Under the proposed alliance, Qantas would buy up to 22.5 percent of Air New Zealand for NZ$550 million (R2.37 billion) to enable the two operators to cooperate on all their routes between Australia and New Zealand.
Qantas and Air New Zealand said last month they would not appeal the New Zealand High Court's decision, and that they would abandon their plans for the tie-up in its current form.
Before Tuesday's decision, the airlines had said that winning approval in Australia could allow them to form an alliance in a modified form.
The tribunal supported all major aspects of the proposal, including plans to code-share, coordinate sales, marketing, pricing and scheduling, and also approved the plan for Qantas to purchase the 22.5 percent stake in Air New Zealand.
The tribunal, led by president Alan Goldberg, said that the alliance would "result, or will be likely to result in a benefit to the public and that benefit will outweigh the detriment to the public constituted by the lessening of competition." - Sapa-AP
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