Airline deal might hit turbulence

Press, 4 August 1987, Page 4

Airline deal might hit turbulence

By

NICK BROWN

Ansett’s surprise purchase of East-West Airlines may yet hit some turbulence as Australia’s Trade Practices Commission examines the deal. T.N.T. and News Corporation, which jointly own Ansett, swallowed up East-West Airlines last Friday just 10 days after East-West had been sold to the Perth entrepreneur, Mr Stan Perron. In one swoop Ansett removed an aggressive challenger to the Ansett-Australian Airlines duopoly on Australia’s domestic trunk routes and a regular antagonist in the courts. While Ansett has agreed to divest East-West’s West-

ern Australian operations to avoid contravening the Trade Practices Act, the Trade Practices Commission’s deputy chairman, Mr Bill Coad, said yesterday that the commission wanted to examine EastWest’s operations in all other states.

He said it would probably be three or four weeks before the commission reached a decision on whether the sale breached the act in states other than Western Australia.

Any disputes would be referred to the Federal Court. Australia’s travel industry is also reportedly concerned that Ansett could try to dominate the indus-

try. The "Sydney Morning Herald” yesterday said the Australian Federation of Travel Agents had engaged lawyers to see if the Trade Practices Act was breached by the EastWest take-over. East-West Airlines, before being sold to Mr Perron, had been preparing for a public float and Air New Zealand was widely tipped to buy a big stake in East-West to get a foothold into the Australian domestic market Air New Zealand, striving for the same treatment in Australia that Ansett has been given in New Zealand, has criticised Ansett’s purchase of East-West as an anti-com-petitive move.