- Dec 6, 2004
stuff.co.nz said:High price of Qantas codeshare
07 May 2006
By GARRY SHEERAN
Air New Zealand will pay Qantas an effective sweetener of more than $40 million if their proposed code-sharing deal goes ahead.
Under the deal, Air NZ proposes to buy out, at face value, the 220.76 million redeemable convertible notes it issued to Qantas in late 2002 for $98.24m.
The notes were the first step in the Australian airline's plan to take a 22.5% shareholding in New Zealand's national carrier. Under that plan, Qantas would have eventually put $550m into Air NZ as part of a strategic alliance.
But that plan was blocked by the Commerce Commission, which labelled it anti-competitive.
The current code-sharing proposal is another attempt by the two airlines to cut costs by sharing planes on trans-Tasman routes.
Also as part of this deal, Air NZ has said it will convert to debt the notes issued to Qantas three years ago, and pay back the $98.24m to Qantas over four years.