Air NZ Cabinet Minutes
Cabinet minute on the proposed process
Commercial: Sensitive
Personal
to:________________________
CabinetMinute of Decision
CAB Min (02) 31/23
This document contains information for the New Zealand Cabinet. It must be treated in confidence and handled in accordance with any security classification, or other endorsement. The information can only be released, including under the Official Information Act 1982, by persons with the appropriate authority.
Minister
of Finance
Associate Minister of Finance
(Hon Trevor
Mallard)
Minister of Transport
Copies to:
Prime
Minister
Deputy Prime Minister
Hon Jim Anderton
Minister of Tourism
Minister of Commerce
Secretary, POL
Additional Item: Air New Zealand and Qantas Commercial Alliance: Proposed Process
On 18 November 2002 Cabinet:
1 noted that Qantas and Air
New Zealand have revealed to the market that the two
airlines are in discussions about a strategic partnership
that includes Qantas taking an equity stake in Air New
Zealand;
2 noted that agreement has been reached with
Air New Zealand for the government to make an in principle
decision on the ownership case, and a conditional decision
from the Kiwi Shareholder, within five weeks of the proposal
being publicly announced;
3 noted that a favourable Kiwi
Shareholder decision will mean Qantas will be advised that
approval has been given for the entire shareholding sought
by Qantas, subject to:
3.1 there being no material
changes to the commercial proposal, or significant new
information being revealed, during the subsequent
competition and other regulatory processes;
3.2 approval
of the transaction by Air New Zealand shareholders, with
respect to any portion of shares requiring shareholder
approval;
4 agreed that the following process and
timeline will be used for the Government's consideration of
any proposal by Qantas to purchase a stake in Air New
Zealand:
Date Event
20 November 2002 Cabinet
Policy Committee, with Power to Act, agrees on the national
interest criteria
22 November 2002 - Air New Zealand and
Qantas announce proposals-
Application made to Kiwi
Shareholder
22 November to early December 2002 Separate
groups of officials undertake ownership and national
interest analysis
18 December 2002 Cabinet Business
Committee, with Power to Act, makes an in-principle decision
on the ownership case, and a conditional Kiwi Shareholder
decision
May-June 2003, subject to favourable
in-principle decisions by Cabinet Competition authorities
advise decisions
Following competition and other
regulatory approvals, if granted Cabinet confirms ownership
decision (subject to shareholders' approval) and reconfirms
the Kiwi Shareholder's decision
Following Cabinet
approval if granted Air New Zealand shareholders' meeting
5 authorised the Cabinet Policy Committee on 20 November
2002 to have Power to Act in considering the national
interest criteria that should be applied as part of the Kiwi
Shareholder's evaluation of the proposal;
6 noted that
the intention of the Kiwi Shareholder evaluation will be to
reveal all relevant information on the national interest
criteria selected by Ministers, and allow the Kiwi
Shareholder to make an informed qualitative judgement based
on this information;
7 noted that a comprehensive,
quantitative analysis of other possible criteria, such as
the effect of a commercial alliance on inbound and outbound
passenger flows, is more appropriately undertaken through
the Commerce Commission's process than the Kiwi Shareholder
evaluation;
8 noted that the Minister of Finance,
Associate Minister of Finance (Hon Trevor Mallard) and
Minister of Transport will consider further whether it is
necessary to maintain the formal separation of regulatory
and ownership advice submitted to Cabinet, or whether it
would be preferable to synthesise both perspectives into a
single piece of advice for Cabinet;
9 noted that
Ministers are likely to have access to commercially
sensitive information that could influence market
participants;
10 invited the Minister of Finance, the
Associate Minister of Finance (Hon Trevor Mallard), the
Minister of Transport and the Minister of Tourism to form a
subgroup of Ministers to develop a communications strategy;
11 agreed that all communication on the Qantas/Air New
Zealand negotiations be sanctioned by the subgroup of
Ministers referred to in paragraph 10 above.