Hazelton bid battle escalates

By Phil Boeyen, ShareChat Business News Editor

Friday 5th January 2001

Australian regional carrier Hazelton Airlines has become a growing object of desire for Qantas and Ansett this week as they push their offers for the airline ever higher.

Only hours after Qantas announced an improved bid for Hazelton shares on Thursday of A$1.50, Air NZ (NZSE: AIRVA) owned Ansett jumped back in the market offering A$1.60 per sharer, up from its previous A$1.35.

The bidding battle has given Air NZ's new CEO, Gary Toomey, one of his first chances to speak publicly on behalf of his new employer and he was quick to repeat the message of "commitment to regional air service" that Ansett has preached from the start.

"I am impressed by Ansett's historic and ongoing commitment to regional communities and understanding of the importance of quality regional air services," he said in a statement.

"This is a fundamental for Ansett in terms of our commitment to regional services. Ansett is the bidder committed to building a strengthened Hazelton operation and to the continuing integrity of Hazelton's New South Wales regional air services."

That's a lot of commitment in just three sentences.

Nevertheless it indicates the kind of argument Ansett will put into play in trying to convince the Australian Competition and Consumer Commission that its bid, rather than the Qantas bid, should be allowed to go ahead.

The ACCC is against either carrier taking over Hazelton, fearing a takeover would reduce regional competition or allow one of the airlines to take control of the majority of landing and takeoff slots at Sydney Airport.

Both airlines are currently talking with the ACCC to try to allay those fears. This could mean promising to give away some of the slots to other airlines if their bids are allowed to continue, or giving "enforceable undertakings" that they will not transfer the regional service slots to more lucrative interstate flights at peak times.

The ACCC is expected to make an announcement at the end of the month but whatever the outcome Ansett is definite it won't be giving up the stake it already has.

"Our long term commitment is further evidenced by the fact that regardless of the outcome of this revised bid Ansett will not dispose of its original 20% shareholding," says Mr Toomey.

Such a statement shows that Mr Toomey - a former deputy CEO of Qantas and with considerable Australian airline experience - believes Hazelton is worth fighting for, and it will come as comfort to the Air New Zealand board to have a man with inside knowledge of the competition on their side.

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