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AUCKLAND, New Zealand (Radio Australia, April 11) - The New
Zealand government has hit out at its competition watchdog for rejecting a
proposal by the Australian airline, Qantas, to buy into Air New Zealand.

Both airlines must now make big changes to their proposal if
they want the deal to proceed.

Both the Australian Competition and Consumer Commission and the
Commerce Commission of New Zealand have rejected the proposed alliance between
the airlines.

They say fares would increase on several routes and there would
be few flights across the Tasman.

However, New Zealand's deputy Prime Minister, Michael Cullen,
says the Commerce Commission is wrong to believe Air New Zealand will survive
without Qantas.

"[It] seems to assume some kind of fairy godmother is going
to appear - given the number of fairy godmothers who are in bankruptcy at the
moment that doesn't appear terribly likely," Mr Cullen said.

Air New Zealand's chairman John Palmer says he is convinced the
airlines will come up with a new proposal that will satisfy the competition

April 11, 2003

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