'Devil in plan' of Air NZ Qantas tie up

[Yada Yada]

Follow-up story:

High price of Qantas codeshare
07 May 2006
By GARRY SHEERAN

Air New Zealand will pay Qantas an effective sweetener of more than $40 million if their proposed code-sharing deal goes ahead.

Under the deal, Air NZ proposes to buy out, at face value, the 220.76 million redeemable convertible notes it issued to Qantas in late 2002 for $98.24m.

The notes were the first step in the Australian airline's plan to take a 22.5% shareholding in New Zealand's national carrier. Under that plan, Qantas would have eventually put $550m into Air NZ as part of a strategic alliance.

But that plan was blocked by the Commerce Commission, which labelled it anti-competitive.

The current code-sharing proposal is another attempt by the two airlines to cut costs by sharing planes on trans-Tasman routes.

Also as part of this deal, Air NZ has said it will convert to debt the notes issued to Qantas three years ago, and pay back the $98.24m to Qantas over four years.

More...

 

[jakeseven7]

With this NZ/QF will be able to compete more effectively with carriers like Emirates.

Exactly, Emirates dumping capacity on the route has been hurting both carriers, with this tie up at least it evens the field up a little more, although I'm sure both QF and NZ would love to enjoy the same tax breaks Emirates do...

 

[JohnK]

NZ bodies condemn Qantas plans

NZ bodies condemn Qantas plans

Opposition is growing in New Zealand against the proposed trans-Tasman codeshare deal between Qantas and Air New Zealand.

Tourism groups say any reduction in flights will threaten passenger numbers and growth in one of New Zealand's most important industries.

Qantas and Air New Zealand claim they are sustaining heavy losses on the trans-Tasman route, operating the equivalent of eleven empty aircraft every day.

More...

Some valid concerns on proposed codeshare arrangements!

 

[Kiwi Flyer]

The ones reporting concern are mainly airports (big surprise - their income will drop) and from Wellington (concerned there are no competitors - but Pacific Blue could easily re-enter that market).

 

[NM]

The ones reporting concern are mainly airports (big surprise - their income will drop) and from Wellington (concerned there are no competitors - but Pacific Blue could easily re-enter that market).

I suppose JetStar or Freedom could enter the Wellington marker ... oh, sorry, you mentioned competition :evil:.

 

[Kiwi Flyer]

Funny how competition is expected so much more on trans-tasman yet the lack of competition domestically is forgotten about.

While the trunk routes have 2 or 3 airlines (only NZ with decent schedule), many other domestic routes only have 1 airline.

 

[jakeseven7]

I suppose JetStar or Freedom could enter the Wellington marker ... oh, sorry, you mentioned competition :evil:.

Wellington Airport Corp has been swinging out at anyone who comes close calling Pacific Blue 'a shadow of what it promised to be' in light of them scaling back their presence in NZ and providing very little competition.

As I only travel to NZ on business (ie don't pay) I would welcome a better spread of flights because at the moment the schedule truly bites!

 

[JohnK]

The ones reporting concern are mainly airports (big surprise - their income will drop) and from Wellington (concerned there are no competitors - but Pacific Blue could easily re-enter that market).

Nothing wrong with airports having a concern in the matter. Let's not forget who provides the facilities for airlines to conduct their business. Airports are just as important in surviving as are the airlines.

 

[Kiwi Flyer]

WLG was been found to charge extortionate landing fees a few years ago. Of course airports are important but IMHO the airport is also partly to blame for DJs poor showing there.

 

[jakeseven7]

Re: NZ bodies condemn Qantas plans

Some valid concerns on proposed codeshare arrangements!

Valid yes. But it boils down to the fact that AirNz and QF are both losing money on the TT flights, and have tried several different ways to turn things around. NZ is losing up to around 1 million a week.

Commercial reality is, that if this doesnt go ahead, services will be cut instead.

 

[Yada Yada]

Re: NZ bodies condemn Qantas plans

NZ is losing up to around 1 million a week.

And has nothing to do with AN.

 

[jakeseven7]

Re: NZ bodies condemn Qantas plans

And has nothing to do with AN.

Yes NZ has no one else to blame this time.

It has actually suprised me a little how open NZ has been about the whole deal. They are openly saying, look we tried new routes, tasman-express fares to try and get more pax, jigged our service, our schedules etc etc and just can't turn a profit there. Neither can QF. Neither can DJ.

If this goes ahead, what are peoples speculations about earning SC on QF marketed NZ metal flights?

 

[NM]

Re: NZ bodies condemn Qantas plans

If this goes ahead, what are peoples speculations about earning SC on QF marketed NZ metal flights?

I expect trans-Tasman codeshares to be handled exactly the same way as any other QF codeshare. If you are booked on the QF flight number, you will earn SC and FF points according to the fare class and distance flown.

 

[Kiwi Flyer]

Re: NZ bodies condemn Qantas plans

I expect trans-Tasman codeshares to be handled exactly the same way as any other QF codeshare. If you are booked on the QF flight number, you will earn SC and FF points according to the fare class and distance flown.

That matches what has been in the media. Book NZ code and get NZ/*A benefits and mileage. Book QF code and get QF/OW benefits and mileage.

 

[serfty]

That matches what has been in the media. Book NZ code and get NZ/*A benefits and mileage. Book QF code and get QF/OW benefits and mileage.

K/F, I'm sure you'll be looking for a way to get both at the same time!

 

[Kiwi Flyer]

K/F, I'm sure you'll be looking for a way to get both at the same time!

Nah I leave my double dipping to HHonors and PPS - both core features of their programs.

 

[JohnK]

Qantas, Air NZ deal to 'keep fares low'

Just in case people missed the latest news.

Qantas, Air NZ deal to 'keep fares low'
Friday Jun 9 19:33 AEST

A senior Qantas manager says the airline's plan to codeshare with Air New Zealand is essential to keep airfares across the Tasman low.

Qantas chief financial officer Peter Gregg says the number of empty seats on the Trans-Tasman route was "not sustainable".

But analyst Professor Tim Hazledine has warned fares could rise up to 25 per cent because the plan involves joint scheduling and pricing.

Both airlines insist the arrangement would not mean fare price hikes.


More...

 

[Yada Yada]

Re: Qantas, Air NZ deal to 'keep fares low'

Both airlines insist the arrangement would not mean fare price hikes.

Well there's a steaming hot pile of manure. Economics 101 - restrict supply, prices go up.

 

[serfty]

Nah I leave my double dipping to HHonors and PPS - both core features of their programs.

Actually, maybe not such a remote possibility.

I note that on FT, one of the of the guru's (number_6) indicated that when travelling on relevant flights they try to arrange the points to AAdvantage and the SC's to QF!!!

 

[Kiwi Flyer]

Actually, maybe not such a remote possibility.

I note that on FT, one of the of the guru's (number_6) indicated that when travelling on relevant flights they try to arrange the points to AAdvantage and the SC's to QF!!!

How can you do that? I recall seeing how number_6 was comped requalification of WP despite crediting to AA but I thought that was based on QF revenue factors rather than crediting SCs.

If you can credit SCs to QF but miles to AA that would be of great benefit to myself and many others too I suspect.