Air New Zealand Bail Out Proposal A Con
Friday 15th Jun 2001 Stephen Franks Media Release -- Governance & Constitution
Any New Zealand Government money given to Air New Zealand would bail out the shareholders and not be a rescue for the company, says ACT’s commerce spokesman Stephen Franks.
“The payoff goes to the Asian controllers of Brierley Investments (BIL) and Singapore Airlines not New Zealanders generally.
“It is unbelievable that the Minister did not show them the door weeks ago. Despite the Cabinet’s lack of business experience their normal prejudice against multi-nationals should have led them to smell a rat. But if press reports are correct, flattery and lack of nous seems to be sucking New Zealand into a scheme to rescue Air New Zealand’s foreign owners. I am familiar with the relevant law, the issues are not complex and Air New Zealand’s problem is not with the law. Our law is part of a pattern known by every international airline around the world. It has not changed.
“BIL got Air New Zealand to pay too much for Ansett Australia. The consequence is Air New Zealand has a large loss and may have to sell Ansett at a discount. That is sad for Air New Zealand shareholders.
“But the solution does not need Government involvement it just needs acceptance that the shares are worth much less now if new capital is needed.
It seems protracted negotiations could even led ministers to agree to the equivalent of injecting a wasting virus into Air New Zealand.
“Representation of Qantas and Singapore Airlines on its board would mean the two competitors with most to gain from watching Air New Zealand shrivel could know all its strategies in advance and direct them. Air New Zealand under Qantas and Singapore Airlines influence would suffer a long painful decline, its immunities destroyed by Government blessed viruses on the board.
“The Government must come clean. Is it negotiating behind Mr Toomey’s back in terms that would make his nightly TV assurances to New Zealanders meaningless?” Stephen Franks concluded.
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