Qantas eyes cheap NZ ticket

By DANIEL RIORDAN aviation writer

Having allowed its New Zealand franchisee to collapse, Qantas Airways is considering entering the domestic market in its own right, and at a bargain basement cost.

Tasman Pacific, the company that had been flying as Qantas NZ for less than a year, went into receivership on Saturday morning at the prompting of its major debenture holder, the Bank of New Zealand.

Transport Minister Mark Gosche said yesterday that approval for Qantas to fly domestically had been granted last week as part of what he understood was a contingency plan by the Australian airline to ensure continuity of service. Under open skies agreements between New Zealand and Australia, Qantas could have applied for that permission at any time.

Mr Gosche expects to hear more about Qantas' plans today when he meets its New Zealand head, Peter Collins - a meeting scheduled some time ago.

"The airline industry is a tough world. It takes a lot of money to get into it and make a go of it in the first place. I think we will see something emerge from the gap that's there, but we won't know what it is for a while."

Receiver Michael Stiassny of Ferrier Hodgson would not reveal the size of the debenture held by the BNZ, but said it was more than the $4 million reported at the weekend.

He was still working out how much debt the airline had, but said it had few assets to sell. Twenty of Qantas NZ's 21 planes were leased from Air New Zealand, and had already gone back.

He said two parties, which he would not name, had shown interest in the assets.

Unconfirmed reports put Qantas NZ's total debt at $20 million.

Qantas Airways had been negotiating with Qantas NZ for several weeks before talks broke down.

"At the end of the day, the numbers didn't stack up," said Qantas spokesman Michael Sharp.

Mr Sharp said Qantas had several options for its involvement in the New Zealand market, but it was too early to be more specific.

One of those options would appear to be buying at bargain basement prices the pieces of the Qantas NZ operation that it needs to connect with its transtasman flights.

Peter Harbison, director of the Centre for Asia-Pacific Aviation in Sydney, said a "selective re-entry" by Qantas into the New Zealand market is a strong possibility.

"Qantas had the opportunity before to invest in it, and made it clear it didn't want to.

"But it does want to be in the market. It's important, albeit not essential, to compete with Air NZ, at least in the connecting market if not the domestic market.

"If it was going to make any sort of investment, it would sit back and wait, and perhaps pick up certain pieces in what is definitely a buyer's market. Certainly it would like the market share."

That share has been estimated at about 40 per cent.

He said Qantas would want to use some of the 1100 Qantas NZ staff who were laid off on Saturday.

"You ideally want the resource of some of the marketing and sales staff, people who understand the market, and some of the underlying infrastructure network that keeps that in place, including terminal access."

Damage to the Qantas brand was inevitable, said Mr Harbison.

But by allowing its franchisee to fall over, Qantas can fly into New Zealand with new aircraft, free of the hangovers from Ansett ownership.

Qantas NZ flew eight 90-seater BAe146 whisper jets on expensive leasing deals.

Qantas could use Boeing 737s, which are cheaper to maintain.