Wellington (New Zealand), Oct 23: New Zealand's competition watchdog has again rejected applications by Air New Zealand and Australia's Qantas Airline to form a commercial alliance. The commerce commission said in a ruling today that the plan "would damage competition and harm consumers and is therefore not in the interests of New Zealanders".
The same ruling was given in the commission's initial finding in April, after which it held a public hearing to hear additional arguments.
Under the alliance plan, the Australian carrier would buy 22.5 per cent of Air New Zealand for 550 million New Zealand dollars (US$330 million). The commission said it "declined to authorize the proposed acquisition by Qantas of 22.5 per cent of the voting equity in Air New Zealand and a strategic alliance between the two companies".
Air New Zealand warned at public hearings in August it could collapse within three to six years as it would be poorly placed to win "a struggle for survival" against Qantas, which is many times bigger. The two airlines need approval from competition authorities in both countries for Qantas to buy into its New Zealand-based competitor.
Australia's competition and consumer commission ruled against the plan on September 9, saying it would stifle competition, raise prices and cut services. Bureau Report