2 'Blame game' infuriates Air NZ
14 September 2001
By MATHEW LOH HO-SANG
Responding to calls for his head in Parliament yesterday and accusations
from Deputy Prime Minister Jim Anderton that the existing Air NZ board
"couldn't run a corner dairy", Dr Farmer said today: "We were telling the
New Zealand Government back in June and the Aussies as far back as May that
Ansett Australia was losing over $2 million per day.
"And if this blame game - which is really no good for the present and future
wellbeing of Air New Zealand - continues, we will have to provide detailed
information on exactly what was said, who said it, and when, in order to
defend our position that the board did the best job it could under extremely
difficult circumstances".
Meanwhile, in response to calls from Australian union officials that Air NZ
guaranteed an estimated $6 million in accrued entitlements to Ansett
Australia staff whose jobs are seriously threatened, Dr Farmer said: "We
have continued to pay Ansett Australia wage bills and in fact have paid out
a wage bill today."
But he said it was too early to guarantee Air NZ responsibility for accrued
entitlements. "There is no doubt about what Ansett staff are entitled too
but the voluntary administrators have a lot of work to do before anything is
confirmed."
He explained his intentions to leave the board, saying the job had become
"highly pressured and basically full-time".
He had been under increasing pressure over the past months as the extent of
Air NZ's problems associated with Ansett Australia became public knowledge.
Dr Farmer also added he wanted no part of a board that was dominated by
vested interests.
Part of the conditions of the taxpayer-funded bailout is a restructuring of
the airline's board from 14 members to 9, including the managing director,
that will see the balance of power shift from independent board members to
stakeholders Brierley Investments and Singapore Airlines.
Dr Farmer confirmed his exit within hours of Ansett Australia's planes being
grounded, Air NZ's report of a $1.43 billion loss, and confirmation of a
taxpayer-funded $550 million loan to keep the Kiwi airline aloft.
Sources have confirmed the $550 million taxpayer-funded bailout announced by
the Government to recapitalise Air New Zealand is dependent on satisfactory
due diligence being completed by October 10.
"We are entering into a due diligence process now where we will examine Air
New Zealand closely, and if we aren't satisfied by October 10 that the $550
money loan will be money well spent then we will have to consider other
options," the source said.