Benefits from synergy outlined

Press, 27 September 1988, Page 6

Benefits from synergy outlined

Air New Zealand would gain more benefits through a link with Qantas than it would through one with a northern European airline partner, said the chairman of Qantas, Mr Jim Leslie, in Wellington yesterday.

Mr Leslie said he saw the possibility of synergy through a closer association between the two airlines as a natural extension of Closer EconomicRelations.

“In addition the partnership would create a strong regional combination to exploit more effectively tourism growth opportunities in this part of

the world,” he said. “Both our airlines are part of a region which in terms of tourism growth is running well above the O.E.C.D. average. Together we can substantially increase the flow of tourists to New Zealand.

“There are some facts which need to be set straight,” he said. “Air New Zealand and Qantas both have a long and valued association with British Airways, but that airline has only tenuous links to New Zealand with a mere three flights a week compared with 50 by Qantas.

“Obviously Qantas is far better able to feed traffic into Air New Zealand’s domestic network and New Zealand’s tourism infrastructure,” said Mr Leslie. “The primary source of tourism to our region is not Europe but rather the Pacific rim and that is becoming more evident each day. “For instance, Qantas has 88 flights a week from Asia and Air New Zealand eight, providing major opportunities for the route structures of Air New Zealand and Qantas to complement and support each other.”

Mr Leslie said tourism was an important earner of foreign exchange and provided substantial employment opportunities in both New Zealand and Australia.

He said he expected that New Zealand’s involvement in aviation maintenance would get a significant boost through the closer association of the two airlines. “We are confident that additional engineering work would be placed with Air New Zealand facilities,” said Mr Leslie. “There is a huge and increasing demand for the high quality skills of both

Air New Zealand and Qantas in the engineering field. Air New Zealand has enormous strengths in both management and technology. Both airlines would, I hope, be looking to attract more lucrative contract work from foreign airlines.” Mr Leslie said Qantas would support the Government’s view that the staff of Air New Zealand have the opportunity to purchase Air New Zealand shares. He said Qantas would also welcome participation by New Zealand investors but that was clearly a matter for the Government.