Qantas senses a bargain deal for ailing NZ franchise

By DANIEL RIORDAN

Price is the key as Qantas Airways negotiates to take over ailing Qantas NZ - a move tipped to benefit travellers.

A team from insolvency firm Ferrier Hodgson, led by Michael Stiassny, has been kicking the franchisee's tyres since last weekend after being called in by major debenture holder BNZ. Talks are expected to continue into next week.

Qantas NZ, the name under which Tasman Pacific Airlines has flown as a franchise operation of Australia's Qantas Airways since last September, is understood to be losing more than $100,000 a month, hit by higher fuel costs and sinking revenues.

Tasman Pacific, owned by a consortium of local and Australian businessmen, paid Rupert Murdoch's News Corp about $35 million for Ansett Australia a year ago.

Analysts said Qantas Airways should be able to negotiate a lower price given the airline's worsening financial situation.

While Qantas says it has no timetable for buying Tasman Pacific, one source said Australian managers were preparing to fly from Sydney and take over.

The parties kept mum yesterday. Qantas NZ management continued a "no comment" policy. Qantas Airways spokeswoman Melissa Thomson said the airline had nothing to add to Thursday's comment that it was looking to buy Tasman Pacific, and that meanwhile it would honour all Qantas NZ tickets.

The deeper pockets of the Australian carrier will give it greater clout to match Air New Zealand as it fights to regain its share of the high-value corporate traveller market, lost in the fallout from Ansett NZ's pilot strike in December 1999.

Although some Australian commentators speculated that Qantas Airways might consider trimming routes and even making an orderly exit from the New Zealand market provided it could maintain its brand reputation, most analysts here believe such a move unlikely.

Qantas New Zealand employs 1100 staff, including about 140 pilots and 180 cabin crew. Union officials said yesterday they were still waiting to hear about their future.