Trans-Tasman Open Skies? Not yet...

 

It is a key piece of New Zealand aviation history and indeed Trans-Tasman international relations that Australia and New Zealand were negotiating an agreement to liberalise the airline markets in both countries, effectively creating a single aviation market, and Australia pulled the plug on it in 1994 - because of fears that it would undermine the sale price for Qantas as it was being privatised at the time.

This article from the Evening Post in 18 June 1992 was written by a former transport Minister at the time, Bill Jefferies (who was transport and civil aviation Minister during the second term of the Lange (then Palmer/Moore) Labour Government, at the time of the Bolger Government. 

The article notes the significance of bringing aviation under CER, with the intention of there being a single aviation market, and Australia choosing to undertake its own merger of Qantas with Australian Airlines (formerly TAA), which has parallels with the Air NZ/NAC merger in 1978.  The merged airline was to have 70% of it privatised.  Jefferies writes that this is all good for the public as he summarises the history of airline markets over the years.  He notes New Zealand liberalised before Australia, as Australia at the time still had only one permitted international carrier (Qantas) and two domestic airlines (Australian Airlines and Ansett) with protected status.  Although Ansett had permission to fly domestically in New Zealand, Air New Zealand could not do so in Australia.  

Jefferies expected the single aviation market would see Ansett integrating its New Zealand services into its Australian operations including being able to operate internationally, but also Air New Zealand could fly domestically in Australia, especially between east coast capitals.  He also noted the possibility of being able to market travel to Australia and New Zealand jointly into overseas markets.

In fact, it all fell apart in 1994.  The effects of this were wide ranging. Air New Zealand's only option to be involved domestically in Australia was to buy 50% of Ansett Australia (and later 100% which required Ansett to sell its New Zealand operations), which would prove to be ill-fated for a range of reasons.  An interim agreement in 1996 sought to take some steps towards a single market, which was concluded in 2000. 

 (I was in attendance as an official at the signing of the Memorandum of Understanding in 2000 between Ministers)