Nats want merger grounded

United Airlines' decision to pull out of New Zealand should stop the proposed merger between Air New Zealand and Qantas, says National transport spokesman Roger Sowry.

"The disappearance of United Airlines from our skies should herald the death knell for the proposed merger," said Mr Sowry.

"I believe there's no way the Commerce Commission could now approve the deal if it were truly looking after the interests of the New Zealand traveller and Kiwi businesses."

United, the world's second-largest airline, filed bankruptcy proceedings in the United States a month ago. On Friday it announced it was pulling out of New Zealand, making its 96 New Zealand employees redundant.

The last United flight will depart Auckland for Los Angeles on March 29. At that point only Air New Zealand and Qantas will fly between New Zealand and the United States.

Qantas has applied to buy 22.5 per cent of Air NZ for $550 million.

Competition authorities on both sides of the Tasman have yet to decide on the proposal.

The Government - Air New Zealand's principal shareholder - gave its agreement in principle to the deal just before Christmas.



UBS Warburg New Zealand equities analyst Timothy Ross said the Commerce Commission was concerned with domestic issues and had no jurisdiction on who flew in and out of the country.

"Theoretically, the Qantas deal should not be contingent on who is flying in and out of New Zealand, as long as there are no barriers to airlines wanting to do so," he said.

"It will leave them with an effective monopoly, but it is only a monopoly if there are barriers to entry."


- NZPA

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