Dunne alarmed by Air NZ papers
Dunne alarmed by Air NZ papers
United Future leader, Peter Dunne, said today his opposition to the proposed Qantas takeover of Air New Zealand had been confirmed by the partial release of the Treasury papers advising the Government on the deal.
"We are constantly being told by Air New Zealand that this is an all-or-nothing deal, that Air New Zealand will not survive unless we allow the rapacious kangaroo to gobble up the cowering koru-bearer," he said.
"Yet even the Treasury advice points out that letting Qantas into the New Zealand boardroom will not guarantee autonomy for our national carrier.
"Here's one quote: For Qantas, putting in $540 million provides it with board representatives to allow it to monitor Air NZ's performance and influence its strategy. It also restricts other airlines from entering into a strategic alliance with Air NZ.
"I emphasize particularly the references to influencing Air NZ's strategy and restricting other airlines. In effect, we are promoting an aviation monopoly for the benefit of Qantas - an airline whose history has never been one of helpful co-operation, but predatory competition with Air New Zealand."
Mr Dunne said he was struck by Treasury's blithe dismissal of the New Zealand capital markets as a source of re-financing for Air New Zealand.
"Another quote: Air NZ is unlikely to be able to source such a large amount of capital ($540 million) from the market - if it were able to, the bulk would probably need to come from the Crown as principal shareholder.
Even though some market participants have stated that Air NZ could source capital from the market, it would extremely difficult to get such a large amount given Air NZ's fragile position and the risky industry it operates in.
"That is certainly not the advice I have been getting from the New Zealand business community and I wonder just who Treasury has been talking to."
"Treasury's advice concerning Air New Zealand's future autonomy is simply alarming.
"A third quote: Air NZ's autonomy is a critical issue from both an ownership and regulatory perspective. Air NZ will need to ensure it has a strong negotiating position in its ongoing relationship with Qantas so that it can ensure Qantas's influence over it is kept to appropriate levels. It will inherently be in a relatively weaker negotiating position than Qantas since it has more of its business within the alliance and because Qantas can threaten it with increased competition.
"In other words, when you translate the Treasuryspeak, it simply means that Qantas is the same powerful bargaining position as an armed mugger 'Give me all your money or I'll shoot you.'
"I first raised these concerns in Parliament on August 28 last year and nothing I have seen or heard since has allayed my original fears."
Mr Dunne noted that submissions to the Commerce Commission
on the proposed takeover close tomorrow and he hoped the
Commission took careful note of the warnings hidden in the
Treasury advice to Government.