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4. IT BECAME CLEAR FROM THE SUBSEQUENT DISCUSSION THAT THE NEW
ZEALAND GOVERNMENT IS NOW EXTREMELY WORRIED ABOUT THE CONSEQUENCES
FOR ANZ OF THE AUSTRALIAN I CAP SYSTEM ON ONE SIDE AND THE IMMINENT INTERVENTION OF CONTINENTAL AIRLINES (WHO HAVE RECENTLY ANNOUNCED VERY LOW FARES ACROSS THE PACIFIC) ON THE OTHER. IN THE PAST, ANZ (LIKE SIA) HAS LIVED LARGELY OFF AUSTRALIAN TRAFFIC,
WHILE ITS POSITION IN THE NEW ZEALAND MARKET HAS BEEN PROTECTED
BY DISCRIMINATING FARES WHICH HAVE ENCOURAGED ÁSSENGERS TO TRAVEL
TO THE LIMITS OF ANZ'S OPERATIONS. NOW, THEY FIND THAT THERE IS A
REVERSE FLOW OF TRAFFIC OVER AUSTRALIA TO THE UK WHICH IS ATTRACTED BY THE LOW APEX FARE, WHILE PUBLIC OPINION IN NEW ZEALAND HAS BECOME IMPATIENT AT THE ABSENCE OF CHEAP FARES BETWEEN NEW ZEALAND
AND THE UK WHICH WOULD CORRESPOND TO THE VERY LOW LEVELS OF THE
OFF-PEAK FARES NOW ESTABLISHED BETWEEN AUSTRALIA AND THE UK. 5. ROGERS SUGGESTED THAT THE MAJOR CHANGES WHICH HAD BEEN BROUGHT ABOUT BY THE INTRODUCTION OF THE I C A P REGIME ON THE ONE SIDE AND BY THE INTRODUCTION OF CONTINENTAL AIRLINES AS A SECOND US DESIGNATED CARRIER ON THE OTHER, COUPLED WITH THE RADICAL CHANGE IN THE US ATTITUDE TOWARDS FARES, MIGHT WELL CALL FOR A RECONSIDERATION OF ANZ'S OPERATING PATTERN. ONE OPTION AND AN OPTION WE HAD ALREADY SAID WE WOULD WELCOME WOULD BE THE ESTABLISHMENT OF THROUGH SERVICES BY ANZ BETWEEN AUCKLAND AND LONDON, COMPLEMENTING THOSE OF BRITISH AIRWAYS. HOWEVER, HEALY SAID THIS WAS TOO RISKY AND WOULD ENTAIL TO0 GREAT A RESTRUCTURING OF ANZ'S EXISTING PATTERN OF
OPERATIONS FOR THE NEW ZEALAND GOVERNMENT TO CONTEMPLATE IN THE NEAR FUTURE. THEY NEEDED A QUICK SOLUTION WHICH WOULD ENABLE ANZ TO CONTINUE ITS EXISTING OPERATIONS AND TO COMPETE WITH THE GIANTS ON EITHER SIDE. THEIR AIR SERVICES RELATIONS WITH AUSTRALIA HAD LONG BEEN STRAINED BUT THEY COULD NOT AFFORD TO GET INTO A DISPUTE WITH SINGAPORE, AS THE. AUSTRALIANS HAD DONE, BY ADOPTING AN ICA P-TYPE REGIME THEMSELVES.
6. BA AND ANZ WERE ASKED TO TRY TO WORK OUT AN INTERIM FARES PACKAGE WHICH WOULD SATISFY NEW ZEALAND'S REQUIREMENT WITHOUT CUTTING ACROSS THE POLITICAL AND ECONOMIC CONSIDERATIONS ON OUR
SIDE,
72 BA TABLED PROPOSED APEX AND APOW THROUGH FARES ON MUCH THE SAME PATTERN AS CAME INTO EFFECT ON UK/AUSTRALIA SERVICES ON 1 FEB BUT AT A HIGHER LEVEL TO REFLECT THE GREATER DISTANCE. THESE WOULD BE AVAILABLE ONLY ON THROUGH SERVICES OPERATED BY BA AND (IF AND WHEN THEY STARTED) AIR NEW ZEALAND,
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18. ANZ