Air NZ braces for turbulence

By Duncan Bridgeman

Friday 23rd May 2003

The government will back consumers ahead of taxpayers if Air New Zealand's proposed alliance with Qantas is gunned down.

Chief executive Ralph Norris is not giving up hope that sceptical competition regulators will find in favour of the airlines' amended proposal but he is not expecting any help from the government, despite its 82% shareholding.

"I think the government has made it pretty clear that it wouldn't intervene," Mr Norris said.

After an emphatic rejection the first time round, a second regulatory veto is looking likely. Across the Tasman, attention has turned to a political solution while cynical observers here are starting to think the same.

But Finance Minister Michael Cullen is standing firm that the government's position has not changed and if the commission turns down the deal, he will not move to overrule it.

Those opposed to the alliance are concerned the government will go back on its word and sanction a Fonterra-style bypassing of competition law.

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