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Airways Corp Restructuring Sound - Minister

22 January 2000

Minister Receives Report into Airways Corporation Restructuring

The Minister of State-owned Enterprises Mark Burton says a report into the restructuring being undertaken by the Airways Corporation has concluded that the restructuring is being been carried out in a commercially-sound way.

"I called for a report from the Crown Company Monitoring Advisory Unit, after concerns were publicly expressed last weekend about redundant air traffic controllers having to be rehired and flown to Christchurch to work, following the transfer of Auckland facilities to Christchurch.

"The report says the cost of the exercise is slightly less than $400,000, not "almost $1 million" as claimed. CCMAU believes the allowances being paid are not excessive. They are similar to those paid to controllers 10 years ago when Wellington services were moved to Christchurch.

"The report also examines safety concerns. It finds that contingency plans are in place for dealing with any failure in the air traffic control system.

"The Airways Corporation's revenue comes from its customers, not the taxpayer, and the hiring of staff on short-term contracts is an operational manner. As Minister, my role under the legislation is to hold the SOE boards accountable for overall performance.

"Nevertheless, I note the findings of the report that the Airways Corporation appears to have followed acceptable processes during the restructuring," Mark Burton said.

(Attached: details of the report's conclusion.)

 At a total cost of $400,000, the cost of this secondment package represents less than one percent of ACNZ's total labour cost – which exceeds $60 million;
 A short-term secondment of 15 controllers to Christchurch is not unreasonable given the nature of the reconfiguration being undertaken;
 The secondment package being offered to controllers, (i.e. an out-of-town allowance plus travel and accommodation) does not appear unreasonable;
 The cost of this secondment is being met from within the restructuring budget, and the restructuring package will result in large ongoing savings, and as such appears commercially sound; and
 In addition to being beneficial to ACNZ and its shareholder, the restructuring package is supported by key ACNZ customers.

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