From the NZ papers courtesy of stuff.co.nz
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Air NZ's high-flying hopes grounded
11 September 2001
By COLIN ESPINER
New Zealanders will keep their national carrier – but Air New Zealand's billion-dollar dream to be a world player is over.
The national carrier's short-term future appears safe, as major shareholders and Government representatives last night put the finishing touches to a refinancing package that does not include Ansett.
Sources say the details remain "significantly conceptual", but the plan appears to involve an agreement by Brierley's to put in more money, a 10 per cent increase in shareholding by Singapore Airlines, and some form of guarantee by the New Zealand taxpayer over the billion-dollar hole in Air NZ's balance sheet.
Air NZ acting chairman Jim Farmer last night announced it was again trying to sell its Ansett subsidiary business to Qantas Airways Ltd and had begun discussions with the airline.
"Any transaction would be subject to due diligence and approvals of the Australian and New Zealand governments, and regulatory approvals, including that of the Australian Competition and Consumer Commission (ACCC)."
ACCC has already indicated that it would not allow such a deal to proceed because of the threat to competition in Australia.
Dr Farmer said Ansett was continuing normal operations, and Qantas and Air New Zealand would continue discussions, over the next few days, on the terms of any acquisition of Ansett by Qantas.
An announcement on the progress of the discussions would be made on or before Thursday, when the company's annual results were presented, he said.
The Press understands Ansett Australia is insolvent and speculation is rife that an announcement over its receivership could be made as early as today.
Ansett, which is losing $1.5 million a day, has stopped advertising in Australia, which along with mass media publicity has seen the carrier's bookings all but grind to a halt.
In another day of revelations:
Singapore Airlines rejected buying Ansett Australia.
Ansett's value has halved from the $1.2 billion Air NZ paid for it.
Air New Zealand's shares, which plunged again on opening, recovered with news of the impending separation of the two carriers, ending slightly higher.
As rumours of Ansett's likely demise spread across the Tasman, holders of Ansett frequent flyer airpoints were reported to be attempting to book tickets in a bid to cash in their points.
Air New Zealand's air points scheme is separate and is guaranteed as long as Air NZ continues to operate.
The Australian Council of Trade Unions has called the debacle "Australia's biggest aviation disaster", and is increasing the heat on Prime Minister John Howard to save Ansett. Mass protests are planned.
Air NZ's long-term future remains an open question post-Ansett. Engineers' Union national secretary Andrew Little said the reasons Air NZ bought Ansett in the first place remained valid.
"If it means cutting lose Ansett Australia there will be ramifications because I don't think Air NZ is viable in the long term as a South Pacific carrier," he said.
"That's not enough given the growing cost of overheads, to sustain the airline well into the future.
"The strategic reason for purchasing Ansett was good – the execution of it may be questionable," Mr Little said.
Air NZ announces its annual result on Thursday, and both the airline and the Government say a new deal must be in place by then.