Air NZ will Co-operate in Ownership Negotiations

Air New Zealand will co-operate fully in the process being established by the Australian and New Zealand Governments to determine Australasian airline ownership issues, the Acting Chairman of Air New Zealand, Dr Jim Farmer QC, said Wednesday.

"We will co-operate in the process to pursue the best possible outcome for the company's customers, shareholders and employees.

"Our preferred option - by unanimous decision of the Board of Air New Zealand, including directors from Singapore Airlines - is for the New Zealand Government to relax limits on foreign investment to allow Singapore Airlines to take a 49% shareholding in Air New Zealand and inject additional capital into the Air New Zealand - Ansett Australia airline group.

"Our Board's decision is supported by a current memorandum of understanding between Air New Zealand and Singapore Airlines. Both parties have affirmed their commitment to the preferred proposal in very recent public statements.

"New Zealand Government approval would obviously be subject to conditions that would guarantee continued New Zealand control of Air New Zealand.

"We note the Australian Government is expressing its concern that this proposal could produce an unhealthy imbalance in the global, regional and Australian aviation markets and wants the Qantas proposal to be fully developed and evaluated.

"Air New Zealand is in no position to consider the Qantas proposal at this point because of the commitment we have entered into with our significant shareholder Singapore Airlines.

"We also note that the issue of Singapore Airlines taking an increased stake in Air New Zealand is still alive and on the table as far as the New Zealand Government is concerned.

"The Government-appointed negotiating team and the joint officials' working party will need to resolve the policy and ownership issues.

"We were pleased to see that both Governments are committed to achieving an outcome that will see a strengthening of Ansett Australia and enhancement of Air New Zealand as part of the process of securing strong competition in both countries' aviation sector.

"That is entirely consistent with our own objectives," Dr Farmer said.