Air NZ loan terms / SOE

[Flash Blackman]

Not sure if this has been covered elsewhere, sorry if it has... Trying to increase my understanding on economics (nothing else to do)...

What changes can employees/public expect if Air NZ became SOE and was there somewhere in the terms of this loan that air nz had to continue to fly to every regional port (if they draw down of course)?
any accountants care to comment?

[empacher48]

I would say not a lot will be noticed. The first bailout post Ansett took the government ownership to 75% (I think), then it was sold down to close to 50% (or whatever it is now) by the previous National government.

The $900M loan (to turn into shares if not repaid) will not take it to 100% government ownership.

[go123]

Not sure if this has been covered elsewhere, sorry if it has... Trying to increase my understanding on economics (nothing else to do)...

What changes can employees/public expect if Air NZ became SOE and was there somewhere in the terms of this loan that air nz had to continue to fly to every regional port (if they draw down of course)?
any accountants care to comment?

I’d say the people of NZ will be very interested to see the salaries of all staff which would be make made public if we became a SOE. Not something that we want. No Christmas presents, wild changes in policy between different govts (labour/national). Not a road we want to go down at all!

[Anti Skid On]

I could not see them including regional services being included; in recent times Whakatane, Taupo, Wanganui, etc. have all fallen off the route map and will not return. The replacement of the Beech 1900 fleet changed the model of operation for many centres that often had half-empty Q300's pre-COVID.

[Flash Blackman]

I could not see them including regional services being included; in recent times Whakatane, Taupo, Wanganui, etc. have all fallen off the route map and will not return. The replacement of the Beech 1900 fleet changed the model of operation for many centres that often had half-empty Q300's pre-COVID.

didnt the loan have a requirement for the regionals (those already being serviced by the ATRs/Dash8s) to continue being serviced I.e. air Nz can’t drop any of its regional destinations?

[27/09]

I could not see them including regional services being included; in recent times Whakatane, Taupo, Wanganui, etc. have all fallen off the route map and will not return. The replacement of the Beech 1900 fleet changed the model of operation for many centres that often had half-empty Q300's pre-COVID.
Hmmm, Pretty sure the Dash 8's were still going into Taupo just prior to the lockdown.

What happens post lockdown is perhaps another story. However it was my understanding that one of the strings attached to the loan was that for the term of the loan all ports in the network pre lockdown had to be still serviced post lockdown.

An additional comment, I guess if Air NZ don't draw down the loan then they won't be bound by any strings.

Edit: I see while I was typing Flash beat me to it

[viatheairporthold]

if we became a SOE. Not something that we want. No Christmas presents

I'd happily relinquish a jar of $4 chutney, a spork, and a cheap bottle of wine every twelve months if it means i can keep my job

[ElZilcho]

I recall that during the term of the Loan we're required to operate to all Regions and a certain number of flights per day on the main trunks.

As for becoming an SOE, much like the Ansett Bailout the Government would likely wait until the last minute for a bailout. Why buy in at ~$1 shares when you can wait for them to plummet to 20c
Not sure what would change... probably put a hold on ULR flight, especially Newark, but that's probably going to happen anyway. Contracts would stay the same unless the Airline actually went under and was bought by the Government in a fire sale. However, the PR fallout from that could go either way. Kiwis have a terrible tall poppy syndrome and relish in "overpaid rich fat cats who are John Key's best mates" losing their jobs while at the same time are heavily critical of the Government and CEO's exploiting workers.

I hope we can survive without going down the SOE road, but I'd rather fly for a Government Airline than not fly at all.

[Anti Skid On]

Hmmm, Pretty sure the Dash 8's were still going into Taupo just prior to the lockdown.

What happens post lockdown is perhaps another story. However it was my understanding that one of the strings attached to the loan was that for the term of the loan all ports in the network pre lockdown had to be still serviced post lockdown.

An additional comment, I guess if Air NZ don't draw down the loan then they won't be bound by any strings.

Edit: I see while I was typing Flash beat me to it


They were flying south, but Sounds Air were flying from Wellington, Air Chathams picked up the others I mentioned. Arguably NZ hasn't the population for all the domestic routes. It'll be interesting to how much government business travel is replaced by Skype and Zoom

[27/09]

They were flying south, but Sounds Air were flying from Wellington, Air Chathams picked up the others I mentioned. Arguably NZ hasn't the population for all the domestic routes. It'll be interesting to how much government business travel is replaced by Skype and Zoom
The dropping of the Taupo Wellington service had nothing to do withdrawal/replacement if the Beech fleet. Eagle stopped flying to Wellington well before this.

[waren9]

There's a significant distinction between being majority Govt owned and being a SOE.

Foran has clearly stated that having AirNZ become an SOE is particularly undesirable and is a place he does not want to go.

[Flash Blackman]

There's a significant distinction between being majority Govt owned and being a SOE.

Foran has clearly stated that having AirNZ become an SOE is particularly undesirable and is a place he does not want to go.

Doesnt really provide much detail on the "significant distinction" does it. Care to flesh that out a bit?

[waren9]

Doesnt really provide much detail on the "significant distinction" does it. Care to flesh that out a bit?

No. Are you a critical thinker that likes to do their own research or do you like to be spoon fed?

[viatheairporthold]

Foran has clearly stated that having AirNZ become an SOE is particularly undesirable and is a place he does not want to go.

Surely that's partly because he probably wouldn't have his job anymore

[Flash Blackman]

No. Are you a critical thinker that likes to do their own research or do you like to be spoon fed?
judging by my line of inquiry, the latter.

[Chris2303]

Ten seconds work.

Probably not quite what you wanted but references therein may help

https://en.wikipedia.org/wiki/State-owned_enterprises_of_New_Zealand