Joint Australia-New Zealand Working Party On Aviation

The Australian and New Zealand Governments will form a joint officials' working party to take forward the extensive discussions that have already taken place at ministerial level on the Australasian aviation market.

The agreement was forged at a meeting in Wellington today between Australian Deputy Prime Minister and Minister of Transport, John Anderson, and New Zealand Finance Minister Michael Cullen and Transport Minister Mark Gosche.

"We recognise each other's great interest in ensuring the long term strength and competitiveness of both countries' aviation sector in the interests of consumers and the travelling public," the three Ministers said.

They said today's discussions had been fruitful, and that there was a high level of consensus between the two governments.

Dr Cullen said the issues for New Zealand were protecting bilateral landing rights, the significance of Air New Zealand to the New Zealand tourism brand and competition.

"We have appointed a lead negotiator who will be entering into discussions with Air New Zealand and associated parties, including Qantas and Singapore Airlines, to flesh out the detail of the various proposals and report back to the New Zealand Government."

Mr Anderson said the Australian Government understood that Air New Zealand needed a capital injection.

"While we have a great respect for Singapore Airlines and would welcome its direct investment in Ansett, we are concerned that its current proposal could produce an unhealthy imbalance in the global, regional and Australian aviation markets," Mr Anderson said.

"Accordingly, the Australian Government believes that the Qantas proposal must be fully developed and evaluated.

"Qantas must now develop its proposal further, to demonstrate how it will benefit New Zealand and how it can satisfy the competition regulators in both countries. In particular, the challenge for Qantas is to show how its proposal will enhance Air New Zealand's route structure and maintain employment in New Zealand," Mr Anderson said.

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