Australian Government pushes Qantas deal

CANBERRA - The Australian Government says it will push for the nation's competition watchdog to approve a proposed alliance between Qantas Airways and Air New Zealand that was initially rejected.

Transport Minister John Anderson said airlines globally were having a hard time and he feared Qantas' future would be less secure if the deal with Air New Zealand was blocked.

"Those that make it in the future will be those who have looked to the long-term, formed strategic alliances and grown.

"There will be many who won't make it because they haven't been able to do that," he said.

"We want to make certain that our aviation sector in this region - in the interest of jobs in Australia and New Zealand and in the region - is given the best possible shot."

"I don't think I'm putting them (the Australian Competition and Consumer Commission) under pressure at all. I completely trust their judgment and their capacity to form the right view."

Qantas signalled this week that it would keep pursuing a planned alliance with Air New Zealand, despite strong opposition to the proposal from competition authorities.

The ACCC and New Zealand's Commerce Commission last month initially rejected a deal for Qantas to buy 22.5 per cent of Air New Zealand for $550 million and share routes to and in New Zealand.

The watchdogs raised concerns that the two airlines would dominate passenger and freight routes between Australia and New Zealand and control the New Zealand domestic market.

The ACCC said it found it hard to see what undertakings the airlines could offer to meet its concerns.

But Qantas this week said it would make a written submission in response to the draft ruling.

It asked for a quick decision so it could lodge an appeal if necessary.

The Commerce Commission this week extended a deadline for submissions on the proposed alliance by six weeks to June 20.

A final decision is now due by September 30.

A spokeswoman for Finance Minister Michael Cullen said the Government's position all along had been that it would abide by the decision of the Commerce Commission and the ACCC and that had not changed.

Air New Zealand shares, the majority owned by the New Zealand Government, rose 2c to 45c yesterday while Qantas shares last traded at A$3.18 ($3.59).

- REUTERS, NZPA