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Air New Zealand: Stop Dithering

Air New Zealand: Stop Dithering

Monday, September 24 2001
Stephen Franks Press Releases -- Commerce

ACT Commerce Spokesman Stephen Franks says it is incredible the Government is still trying to implement an Air New Zealand rescue package with Singapore Airlines and Brierley Investments as controlling shareholders. "You don't force the passengers back on the bus with a driver they think is drunk.

"The Chairman of Air New Zealand has said Singapore Airlines may have been acting in interests other than those of the Air NZ. Michael Cullen confirmed that he has had similar suspicions in response to one of my questions in Parliament last week.

"What sort of company does the Government think Air New Zealand would be if the 'rescue' goes ahead as planned. How will it thrive, even if they get the rescue, given: the obvious reluctance of the major shareholders to put in more and the mistrust staff will inevitably have of the owners.

"The Ministers involved can clearly have never had any experience of trying to rebuild a business culture," Stephen Franks said. He said the Government should:

Reassure customers that Air New Zealand tickets will be honoured. "Such a guarantee would not exceed any exposure the Government already faces to keep services going in New Zealand. Maintaining bookings will reduce the exposure, not increase it. To the extent it is a credit guarantee, any liability can be deducted from the $550m already politically promised."

Announce that if alleged liability to Australia is unfair, or legally improper, or unlikely to be known promptly, the airline will be put into statutory management.

Tell SIA and BIL and Qantas that raising ownership caps will be off the table, so that if their strategy includes an expectation of picking up the airline for nothing from the Statutory Manager, they have miscalculated. "If the airline is reduced for the present to a New Zealand rump, why commentators would international investment and expertise be so critical right now? It hasn't helped much over the past two years."

Urgently investigate the history of Qantas, SIA and BIL as partners, shareholders and those appointing directors, before proceeding any further with a rescue package that could leave any of them with the pickings from the wreckage. "We have been warned that they may have been using their share holdings for strategic purposes inimical to the interests of Air New Zealand. Unlike the US, our company law does not impose fiduciary obligations on shareholders, but we should at least know whether their director nominees acted lawfully. There will be many staff and perhaps even former Board members who may have interesting insights. Michael Cullen has been naive. Any more talk of giving those shareholders control of a taxpayer funded surviving business, would compound that naivety," Stephen Franks said.

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

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