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Air NZ and Qantas appeal decision

Graeme Kennedy

Friday 21st November 2003

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Air New Zealand and Qantas are appealing the Commerce Commission's rejection of their proposed alliance.

The carriers lodged an appeal with the New Zealand High Court yesterday.

It took this action after reviewing the commission's determination.

Air New Zealand chairman John Palmer said the decision to proceed had been made after receiving advice from economists and competition lawyer Jim Farmer QC that the determination was "seriously flawed" and that factual and economic evidence provided strong grounds for an appeal.

"Based on the strength of the advice, it would have been negligent for both boards not to go ahead with an appeal," Palmer said.

Chief executive Ralph Norris said much of the commission's determination was based on analysis, assumptions and information.

This did not stand up to scrutiny ­ it bore no resemblance to the commercial realities of the aviation market, he said.

Norris said the appeal was likely to be heard in mid-next year.

Under the proposed alliance, Qantas would acquire a 22.5% stake in Air New Zealand.

The two carriers would rationalise Tasman services.

The Australian Consumer & Competition Commission also turned down the airlines' application and that decision is being appealed in the Australian Competition Tribunal.

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