Cloud over Qantas' plans to stop SIA

By DANIEL RIORDAN aviation writer

Qantas' hopes of thwarting Singapore Airlines' bid to become the region's dominant airline have been dealt a blow by the Australian Competition and Consumer Commission.

The ACCC's aviation commissioner, Ross Jones, has told Australian media that he would have strong prima facie concerns at any attempts by Qantas to buy a stake in Air New Zealand.

Qantas wants to buy Singapore's 25 per cent stake in the national carrier and offload Ansett to Singapore.

Mr Jones said his main concern was the impact the proposal might have on competition on the transtasman route and the Pacific routes through to the United States and other parts of the South Pacific.

The two airlines would presumably enter some sort of price-fixing agreement requiring an ACCC authorisation "which would entail the most careful scrutiny", he said.

Qantas says a Singapore-owned Ansett would be able to provide competition across the Tasman.

But Mr Jones said that begged questions about how Ansett could do that and with what planes, and what domestic infrastructure in New Zealand it would use to compete.

Qantas has met the ACCC's New Zealand counterpart - the Commerce Commission - to discuss its proposal, although it has yet to make the proposal formal. The New Zealand watchdog says it has an open-door policy for informal talks about New Zealand's regulatory environment.

Meanwhile, Air NZ expects to have a decision from the Government as early as next week on its proposal for Singapore to lift its stake to as much as 49 per cent.

The airline's board will meet in late August to consider a five-year business plan to restore the airline to profit and renew its ageing fleet. Decisions on how to fund new planes will hinge on the Government's verdict on the Singapore proposal.

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