Qantas quashes talk of cut-price NZ operation

By SCOTT MacLEOD transport reporter

Qantas is moving to lease two or three Boeing 737 aircraft for its limited domestic service between New Zealand main centres, but it has squashed speculation that it is about to launch as a discount carrier in New Zealand.

"If we were to lease the planes, they would fit into our existing schedules," Qantas spokesman Michael Sharp said from Sydney last night.

"It's not related to any discount airline by us in New Zealand - that's completely incorrect."

The aircraft would free up Qantas' own 737s, which would be returned to Australia to meet extra demand on routes across the Tasman after the collapse of Ansett Australia.

Mr Sharp said Qantas could not rule out the possibility of its expanding its existing service between Auckland, Wellington and Christchurch to other centres, but it had no immediate plans to do so.

Aircraft-leasing company Ansett Worldwide advertised at the weekend for Boeing 737 pilots, co-pilots and licensed aircraft engineers for a "proposed New Zealand operation" to start next month.

It would initially be for 90 days, with a possibility of extension.

Ansett Worldwide was set up as an aviation leasing operation in 1985 by Ansett Australia's then shareholders TNT and News Corporation.

Those links were severed in February last year, when Ansett Worldwide was bought by global merchant banker Morgan Stanley.

The newspaper advertisements did not say how many pilots and engineers the airline operator was seeking. No one from Ansett Worldwide could be reached last night.

Media reports suggested Qantas was poised to lease a fleet of aircraft to set up a more extensive discount carrier to compete domestically with Air New Zealand and its cut-price offshoot, Freedom Air.

In particular, Qantas was thought to be eyeing Air New Zealand's increased share of high-margin domestic routes, after the collapse of Qantas New Zealand in April.

Qantas would have an edge over any new airline, as it already has terminal and reservation facilities here.

Qantas, which started its main- trunk New Zealand domestic service in June, began using a leased Pacific Airways 737 last week to free up one of its own aircraft for duties in Australia.

Mr Sharp said that if the new leasing arrangements came off, Qantas would retain its own cabin crew in New Zealand but use the extra pilots and engineers hired by Ansett Worldwide.

The aircraft-leasing deals would be short-term arrangements of up to 90 days, after which Qantas would review its requirements.

"Obviously, with the state of the airline industry around the world at the moment, we're looking at all of our operations, all of our schedules and all of our networks in every country," Mr Sharp said.

"Things are changing all the time ... but given the present circumstance we've got no plans to go above four aircraft in New Zealand."

Sir Richard Branson's Australian cut-price airline Virgin Blue also has designs on New Zealand.

Sir Richard has been talking to the New Zealand and Australian Governments in a bid to fly transtasman routes, possibly feeding into main-trunk domestic destinations here.

- NZPA

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