Transcript of the comments Helen Clark made on Air New Zealand at her regular post cabinet press conference, 27 Aug.

The Cabinet today has been discussing Air New Zealand. Michael Cullen reported on the work that the government negotiator, Rob Cameron, has been doing on our behalf. Mr Cameron is in continual dialogue with Air New Zealand. The Cabinet is treating the matter as commercial in confidence so little more can be said about it at this time. We expect to have a final discussion on the matter at the cabinet next Monday.

The PM was asked if a loan from the government for Air New Zealand or other financial guarantee was among the options being considered?

She replied: What I can say is that the government has no desire to be involved in the commercial affairs of Air New Zealand. The kiwi share arrangement is as far as any government envisaged it would ever go when the airline was privatised more than a decade ago. It is not our wish to go near a shareholding. I'm not making any further comment, I'm making very clear the government's preference.

She was asked if the government would be able to meet Air New Zealand's wishes and have a decision before the airline produces its financial statement, scheduled for Tuesday, Aug 4.

She replied: We are, through the negotiator, in continuing contact with Air New Zealand. We should be able to enable them [Air New Zealand] to meet the requirements they have.

She was asked if any of the Cameron options were off the table.

She replied: Mr Cameron I think is doing as good a job as anyone could in advising the government but I'm not going to discuss what options he's put up to us. There has been much speculation in the media and I'm not about to confirm any of that either.

She was asked what she made of the speculation because the reports were often at odds with each other.

She replied: In my experience throughout this whole drama of Air New Zealand that there are so many different interests and so many different spin doctors that many stories find their way into the news media.

Were the spin doctors from the government?
No. I'm thinking of the commercial interests involved.

Was there a probability that the bidders may be asked to amend their initial bid?

She replied; The negotiator has a brief to get from whoever he needs to information to assist the government to make a decision.
Asked the same question again, she replied: I'm not commenting on the work of the negotiator.

What was the government's overriding consideration?

She replied: The overriding consideration is a viable New Zealand airline.

Will next Monday be the final decision?

She replied: I hope it will be.

Asked if she worried that the government would find itself in a lose/lose situation because it would be criticised whatever it did she replied: No, I can't accept that. Air New Zealand's financial issues are not of the government's making.

Obviously the issues raised by the purchase of Ansett give Air New Zealand a few things to work through and Ansett has to track its way back to profitability. But those are commercial issues.

Asked if there had been any inter-government discussions, she said she was unaware of any discussions with the Singapore government and that the only discussions with the Australian government that ministers had had was between Mr Anderson and Dr Cullen.

Was she able to say that there had been any narrowing of the options on the table: We are taking advice from the lead negotiator on the best way to secure a viable Air New Zealand.

What made her confident that was possible: Air New Zealand in the quite recent past has been a strong airline and our desire is to see it return to that status.

A journalist said the only way Air New Zealand could be made viable was by picking up either the SIA offer or the Qantas offer. She said: Ar New Zealand has two suitors and they have both been vocal for some time.

ENDS

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