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Source: ONE News -
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An aviation think tank says Air New Zealand may have to consider a merger by the end of the year if increased competition and the recession continue to take a toll on its viability.
Australia's Centre for the Asia Pacific Region's annual outlook report says the national carrier has prided itself on its ability to "stay nimble" and match demand with supply.
However, it says Air New Zealand has little option but to trim capacity in its Trans-Tasman and domestic markets as aggressive rivals like Jetstar and Pacific Blue move in.
The report says Air New Zealand risks becoming marginalised and that its returns and value will steadily diminish over time. And, if the price of fuel goes increases, its ability to survive may dissolve.
The report also says the carrier, which is majority owned by the government, is unlikely to give New Zealand taxpayers the best possible return on their nearly $1 billion investment.
