Qantas decides not to buy Ansett Australia

4.00 pm

Qantas Airways says it has decided against buying the assets of its rival Ansett Australia, saying problems at the Air New Zealand-owned subsidiary are too big to tackle.

"While we would have liked to have assisted in keeping Ansett flying in some form, the implications for our own balance sheet and future profitability must come first," Qantas chairman Margaret Jackson said in a statement to the Australian Stock Exchange.

The airline has spent the past three days scrutinising the books of debt-ridden Ansett, after the Australian government asked it to come to the rescue as Ansett teetered on the brink of receivership.

Air New Zealand declined to comment on the Qantas decision on Ansett, which controls 40 per cent of the Australian domestic market but loses NZ$1.5 million a day.

Shares in Qantas, which plunged 49 cents or 14 per cent to A$2.95 at the open after this morning's terror attacks on United States' cities, were down 16 cents at A$3.28 after the announcement.

Ansett parent Air New Zealand's A shares fell 16 cents to NZ$0.55 cents while its B shares dropped 21 cents to NZ$0.68.

- REUTERS

Southern Skies Properties Limited

Air wars - the cast list

www.nzherald.co.nz/travel