The battle between Qantas Airways Ltd and Ansett Airlines for regional player Hazelton Airlines Ltd appears to be over after the competition watchdog rejected both takeover proposals.
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The Australian Competition and Consumer Commission (ACCC) said the revised bids put forward by both Qantas or Ansett would not address the competition concerns it had held over their earlier offers.
The commission was concerned a successful takeover, by either airline, would create an uncompetitive situation in NSW’s regional air services market.
It was also concerned regional access to Kingsford Smith Airport during peak times could be affected. The ACCC also originally expressed concern that if Qantas or Ansett gained control of Hazelton’s slots it could move regional services out of peak times and provide additional interstate services
“The ACCC is of the view changes to the scheme sufficient to address its competition concerns are unlikely,” acting chairman Rod Shogren said.
Such a move would lessen competition in both regional and interstate markets, the ACCC said. “The transport minister’s recent statement in relation to moving permanent regional slots has not eliminated the ACCC’s concerns in this area,” Mr Shogren said.
“Approximately 24 per cent of Hazelton slots (roughly 120 a week) are not classified as permanent regional slots and could still be moved.
“After carefully considering their terms, the ACCC concluded that neither of the bids, which were very different to each other, would address the competition concerns that it had with respect to the original proposals.”
The decision by the ACCC follows a similar decision by the watchdog last month to oppose the original bids by Qantas and Ansett.
The ACCC had originally been concerned with the effect on competition in regional markets if either carrier bought Hazelton.
Those concerns were compounded by “the presence of high barriers to entry arising from the limited ability of airlines to access landing or take-off slots in Sydney at popular times,” the ACCC said yesterday.
The takeover war for Hazelton heated up earlier this week when regional rival Impulse Airlines entered the fray with a plan to merge both carriers.
Hazelton has dismissed the offer, saying there was no firm proposal on the table despite 12 months of talks.
Impulse’s offer came as Qantas and Air New Zealand-owned Ansett reached a stalemate after several months of competitive bidding over Hazelton.
Ansett recently upped its offer for Hazelton to $1.60 a share, while Qantas is offering $1.50.
Hazelton shares slumped 23 cents to $1.27 following the ACCC’s announcement.
