Air China's - Orient Aviation

NEWSNew tack for Qantas, Air NZBy Tom BallantyneThe stalled trans -Tasmanairline alliance betweenQantas Airways and Air NewZealand (Air NZ) has been relaunchedin a different guise –as a code-share agreement limited strictly toflights between the two countries.Qantas chief executive, Geoff Dixon,and his Air NZ counterpart, Rob Fyfe,announced the deal in April and said thecarriers will work together on network,schedule, pricing and marketing initiativesfor trans-Tasman operations.The agreement is subject to aviationregulatory approval from the Australianand New Zealand governments. Because itinvolves limited co-operation rather than anoverall alliance covering the carriers’ entirenetworks, it is believed it has a good chanceof winning approval from the monopolywatchdogs, which rejected the originalalliance application in 2003.The new ar rangement, called theTasman Networks Agreement (TNA) doesnot involve any shareholding. Under thealliance deal, Qantas would have taken amajor shareholding in Air NZ.Fyfe and Dixon both said a code-shareagreement – it is expected to take up to sixmonths to win clearance – would allowthe airlines to reduce costs by removingsurplus capacity and utilising aircraftmore efficiently, as well as increasing thenumber of flights available to each airline’scustomers.“The Tasman is a fiercely contestedmarket,” said Fyfe. “The number of seats onsale is greater than the number of passengerscarried. In fact, the equivalent of 11 emptyA320 aircraft make two return trips perday on the route. To continue such overcapacityin the present environment of highfuel prices would not only be uneconomic,it would be financially and environmentallyirresponsible.”“Air New Zealand currently uses 1.78million barrels of fuel a year on the Tasmanroute. This will be reduced by around100,000 barrels annually under the proposedcode-share.”Said Dixon: “This commercial agreementenables us to maintain network presence,while realigning some of the current surpluscapacity on the Tasman.“We plan to develop a combined schedulethat allows us both to better utilize aircraftand save costs.”Concerns such a move will lessencompetition have abated. There are now 11airlines battling to win passengers on trans-Tasman routes.42 ORIENT AVIATION MAY 2006