Discussions are under way between the governments of Australia and New Zealand to explore means for closer cooperation, and possibly even a merger, between their international airlines.
Any form of partnership between Australia's Qantas and Air New Zealand would make the carriers better equipped to compete on world markets.Some observers believe the discussions could result in a down under version of Scandinavian Airlines System, the joint national airline of Norway, Sweden and Denmark.
The Scandinavian success story is being quoted as a model to be emulated by the two government-owned airlines.
The partnership has been prompted by intense competition on international routes, especially across the Pacific, the growing globalization of services and the creation of mega-airlines.
It has long been recognized by both Qantas and Air New Zealand that they face enormous problems to remain independent, profitable and competitive in the 1990s.
A fully integrated partnership would make the combined airline the sixth largest international operator.
It would have over 70 aircraft, almost half of them Boeing Co. 747 jumbos.
At last count, the airlines had a combined operating pretax profit equivalent to US$155 million and 22,000 employees.
Observers agree that a fully integrated partnership would create an important new Pacific regional carrier that would have increasing bargaining power on world markets and would be in a much better position to negotiate better deals on new aircraft.
The Financial Review, published here, noted that the concept could provide an important step in coping with the great tyranny of distance and isolation which has plagued Australia since its establishment as a British colony 200 years ago.
The concept is not entirely new. The international Tasman Empire Airways Ltd. (TEAL) was an operation similar to the proposed merger, which was in business from 1940 until 1961.
TEAL initially was a joint venture between New Zealand (39 percent), Australia (33 percent) and Britain (28 percent).
In 1953, Britain pulled out, leaving Australia and New Zealand joint owners of TEAL until 1961 when New Zealand acquired full ownership and later established Air New Zealand.