Wellington, Nov 25: Australian carrier Qantas is to buy a 22.5 per cent stake in Air New Zealand, the New Zealand airline announced. The deal will see Qantas injecting up to 550 million New Zealand dollars (US$272 million) into the New Zealand airline, currently 82 per cent-owned by the government after a bailout last year.
The deal will allow the two airlines to rationalise their operations and international services, and form a strong Australasian airline group, Air New Zealand said.
“This is a major decision that will shape the future of Air New Zealand... and an initiative which will bring tremendous economic gain to New Zealand,'' said Air New Zealand chairman John Palmer.

He said it meant a strong Air New Zealand would continue to provide both domestic and international services, “and establish a major airline grouping in the region.''
The combined operations would be controlled by the New Zealand carrier.
The buy-in means Qantas will take two seats on the Air New Zealand board.

Trading in Air New Zealand shares was suspended on stock markets in both countries prior to the announcement.
The two airlines have been talking about a closer relationship all year after the New Zealand government bailed out the national carrier with a NZ$1 billion (US$495 million) injection last December.
The airline said it expects to clear regulatory hurdles to the merger by mid-2003. Bureau Report