Qantas and Air New Zealand (ANZ) are trying to boost the odds for final approval of their alliance, in response to adverse draft decisions by Australian and New Zealand competition agencies.

The New Zealand Commerce Commission has agreed to give the carriers an extra six weeks to file responses. Those are now due by 20 June instead of early May. The commission's final decision will come in September.

The most vocal battle, however, has been the war of words between Qantas and the Australian Competition and Consumer Commission (ACCC). Attacking its negative draft, Qantas chief executive, Geoff Dixon, accuses the ACCC of having "ignored or underestimated" the plight of airlines around the world. The agency, he says, "shouldn't focus solely on consumer and competition interests".

The benefits of a Qantas-ANZ alliance, Dixon says, were "supported by just about every independent commentator. Only the ACCC appears to think differently." In fact, the alliance plan drew criticism from many third parties.

Australia's transport minister John Anderson has joined in criticising the ACCC. He echoes Dixon's claim that the benefits of a strong airline should override consumer concerns. "It is in the national interest, and therefore in the public interest for this region to have a strong and viable airline group," he says.

But Peter Costello, Australia's treasurer, widely seen as a prime ministerial candidate, instead advised Qantas to focus on the ACCC's concerns. "I don't think the way to progress is to try and heavy the regulator," he says. The airlines should offer the ACCC undertakings "that will guarantee competition".

Anderson thinks it unlikely his government will need to introduce a law to override any ACCC decision because he believes the watchdog will be "wise and thoughtful". He denies trying to pressure the ACCC. Qantas and Air New Zealand are offering further concessions, but have asked the ACCC to fast-track its decision. They are pinning their hopes on an appeal tribunal, where they expect a more sympathetic hearing. n

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Source: Airline Business