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Will Air NZ get the urge to merge?
SYDNEY – Air New Zealand could launch merger talks with another airline by the end of the year, according to the Centre for Asia Pacific Aviation (CAPA).
Air NZ’s strategy of cutting capacity to remain profitable had worked up to the early part of 2009, CAPA said in its 2009 Aviation Outlook.
“Whether this strategy can continue to keep the airline intact during what looks like being a prolonged downturn for the New Zealand economy will depend on just how long and deep that proves to be,” CAPA said.
“Unless there are more positive new developments for Air NZ, and with current consensus that recovery is unlikely before 2010, it seems likely that merger talks will again be on the table by the end of this year.”
Capacity reduction was the “unavoidable option” for Air NZ and the only way forward for the airline to protect its earnings base, CAPA said.
That base was under relentless pressure from expanding long-haul carriers, such as Emirates, and short-haul, low-cost carriers Pacific Blue and Jetstar, domestically, on the Tasman and in the Pacific.
Source: New Zealand Herald
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