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Govt's Diversionary Tactics Unconvincing

9 September 2001

The Government can't wash its hands of responsibility for Air New Zealand's current plight by laying all the blame on the airline's purchase of Ansett, National's Transport spokesperson Belinda Vernon said tonight.

"It's a bit rich for the Prime Minister to voice optimism that the Air New Zealand board will come up with a deal acceptable to the Government, given her disdain for Air New Zealand when they first approached the Government over three months ago.

"The Government's mishandling of the affair has directly contributed to Air New Zealand's woes and Ansett's deterioration over the last two months.

"Instead of being ready to make a decision when it was approached to lift the foreign airline cap in July, the Government procrastinated. It ignored pleas from Singapore Airlines and Air New Zealand to make a prompt decision

"Rather than acting decisively the Government confused its responsibilities. Its role was to make a decision on the foreign airline cap, not to get into negotiating whether the Qantas or Singapore Airlines deal was better.

"Its failure to make a decision has delayed Ansett recovering its competitive footing in Australia and perpetuated the reported losses of $1.5million per day. It also effectively stymied Air New Zealand's plans to purchase Virgin Blue as the opportunity to replace Ansett rather than sell out to it became increasingly clearer to Sir Richard Branson.

"It's too late now for the Government to say it has no problem with lifting the cap to 49%. The damage has been done. The share price has collapsed the original Singapore Airlines deal withdrawn and the Virgin purchase negated. The capital to be generated by the Singapore purchase has reduced accordingly.

"The Government can't now portray itself as the white knight when it has been so blatantly part of the recent problems," Belinda Vernon said.

Ends


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