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Answers to key questions regarding Air New Zealand's strategic alliance with Qantas

Search ASIA Travel Tips .com 25 November 2002

 Answers to key questions regarding Air New Zealand's strategic alliance with Qantas :

How will you ensure consumers continue to be offered competitively priced airfares?

Our fare structures are based on the need to stimulate the market through affordable fares, higher loads and better aircraft utilisation. Our commitment to this approach is shown through initiatives such as Express Class and the enhanced trans Tasman services for Freedom Air.

Express Class and Freedom Air will continue and the current airfare structure is here to stay.

Can you assure consumers that fares will not go up?

Air New Zealand can confirm that its Express Class and Freedom Air fare structure will remain competitive. Fares will continue to be market competitive. Express Class and Freedom Air's expansion are prime examples.

Why has Air New Zealand chosen to go with Qantas, particularly given the fact that many New Zealanders have expressed their lack of support for the move?

This alliance is a bold move that is good for the country as well as Air New Zealand. It will create wealth and employment.

Now that we have at last been able to tell New Zealanders the terms of the agreement they will be able to appreciate that this was too good an opportunity to miss. It will 

- Allow continuation of affordable, convenient travel for New Zealanders using their own national airline carrier

- Provide economic benefits for New Zealand of close to NZ $1 billion over five years

- Ensure Air New Zealand has a successful future as a global, New Zealand owned and managed company

- Leave us in charge of our own destiny

How much control will Qantas have over Air New Zealand?

The basis of the strategic alliance is the absolute commitment of both parties to Air New Zealand being New Zealand controlled, and managed autonomously under the oversight and direction of its own Board.

Air New Zealand will control its own destiny and retain its identity as New Zealand's airline. Some 70% of shareholding will remain in New Zealand hands and the Kiwi Share structure will remain. The commercial management of the combined operations of Air New Zealand and Qantas in New Zealand and across the Tasman will be Air New Zealand's responsibility.

Will Qantas have board room control?

Qantas will have only two out of nine board positions, 22% is well short of control.

At one time British Airways had as much as a 25% shareholding in Qantas. That did not create control of Qantas.

What does the alliance mean for the travelling public?

An even stronger, growing Air New Zealand. This translates into 

- The retention of affordable fares for Express Class and Freedom Air

- The extension of Airpoints, in time, to Qantas services

- Greater options and flexibility in the number of flights through code sharing with one of the world's leading airlines. Choice will be increased threefold

- Code share access to routes from New Zealand, Sydney to Singapore, London and Europe.

What exactly has happened between Air New Zealand and Qantas?

We have formed a new regional airline grouping in this part of the world. Our focus will be on co-operating so that we do what is best for New Zealand and Australia, our respective customers and for Air New Zealand and Qantas. 

We are co-operating so we have the size and strength to take on the rest of the world's airlines.

How will the alliance operate?

Two of the more important operational aspects are 

- Air New Zealand and Qantas continuing to operate their own services in New Zealand and trans Tasman, but commercial management of scheduling, pricing, routes and marketing will be the responsibility of Air New Zealand

- We will cooperate to develop new routes internationally and improve scheduling and frequency

Why didn't Air New Zealand get New Zealanders to invest in the company rather than selling out to Qantas?

Continuing as a stand alone airline was an attractive notion. The stark reality of the international aviation market is however that it would be a high risk path for Air New Zealand. 

This alliance is not about the short or medium term. Our vision is on the long term and we are determined to be a New Zealand owned, globally operating and sustainable airline of which every New Zealander will be proud. This is a strategic vision which capital alone could not fulfil.

This alliance is dependent on Commerce Commission and Government approval. What happens to Air New Zealand if they do not give that approval?

We believe that when the regulatory authorities examine the alliance in detail and the benefits that will accrue to the respective countries and airlines, we will get agreement to proceed. We have no doubt shareholders and the majority of New Zealanders will see the very real wealth creation benefits that will come from the alliance.

What is Air New Zealand giving Qantas in return?

We share a common vision of what is best for this region and the common realisation that we need to work together to compete against existing and future competition that comes from other carriers. Qantas also clearly value our outstanding reputation for service, safety and technical excellence.

What happens to airpoints and existing alliances?

The benefits of Air New Zealand airpoints members are fully protected. In time it is planned to extend airpoints to Qantas services. Air New Zealand is a member of the Star Alliance. No decision will be made in the near future and it should not be assumed that Air New Zealand will leave the Star Alliance. 

Will Qantas still operate domestically in New Zealand?

Qantas will operate on domestic New Zealand routes and Qantas will be responsible for flight operations matters such as air crew, provision and maintenance of aircraft, and passenger services.

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