Cullen in the House 20 September 2001

Q…..Statutory management and if so why can't he share the advice he has received?

I have received an extraordinary amount of advice from an extraordinary range of people on Air New Zealand very little of which is consistent with each other. But could I also say that the [option?] of statutory management is another process. The government sees that as primarily a process for the Air New Zealand board to follow. Could I repeat to him, what I tried to explain to him yesterday, the due diligence process is one which SIA, BIL, the banks and others all have to go through. So whatever the government decides to do will still take 4 to 6 weeks.

Q. What process might cause those terms to be renegotiated?
If the due dilligence process indicates that the proposed Crown Facility is inappropriate, there can be further discussion to see if agreement can be reached on restructuring the terms of the Government contribution. One option would be, for example, a …by way of convertible security.
Q.Does he accept the view of the markets that the government's rescue package is completely inadequate and that the government has three choices: it can bail out Air New Zealand's shareholders ala the BNZ [Bank of New Zealand] with the tax payers' money, secondly he could put the airline into statutory management to save the employees' jobs and the travelling public's tickets and air-points or thirdly the government can just procrastinate and let the airline fall over just like it did with Ansett?
No, I don't think the member has an infallible connection to what "the markets" believe. But could I say that the government's view is that the issue of statutory management is made most appropriately by the board of Air New Zealand it is for them to decide whether that is the best way to go.
Q. What processes will compromise a bright and orderly future for Air New Zealand?
Constantly talking down Air New Zealand is the one process that risks provoking a high cost route to restructuring. I do urge parties to desist from some rather silly questions and silly political point scoring on this matter.
Q. In hindsight, does the Minister believe that the last Labour government did the right thing by selling Air New Zealand in 1989?
I don't think selling Air New Zealand had anything to do with subsequently Air New Zealand buying 50% of Ansett at a premium without doing due diligence. That was entirely their own decision.
Q. Noting the Minister's answer…long time frame and noting also almost daily as more bad news emerges of Air New Zealand can the Minister assure the House that the directors in particular are co-operating fully with the government or its representative?
I can certainly say that the board is working co-operatively with the government negotiator and certainly Dr Farmer has been working closely with the government over recent days.
Q. With regard to both the state of the aviation market at the moment and the comments contained in the minister's original question, has the situation regarding Air New Zealand led the government to reconsider its attitude to the possible entry of Virgin Blue to the market and if so why and in what regard?
I think its fair to say that Virgin Blue has been a very unwilling bride as far as being a partner with Air New Zealand …market…..sometimes it [unclear]….and at other times it has disappeared completely over the horizon.
Q. Given his comments today, does the Minister still believe that the proposal he announced last week is still alive or is considering changes to it such as he referred to in his comments on convertible notes?
The proposal is still very much alive, the issue of some transfer package is actually contained within the Heads of Agreement.

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