Forum Archive Index - August 2001

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

>
> Whatever happens, Air NZ/Ansett needs to increase its capital and
> lower its costs. If Singapore is not enabled to provide some of the
> capital, what is to stop the Board, among other things: Selling Air
> NZ domestic.It is making good profits,  so it may be a good time to
> sell. 
>
>

Not a bad idea actually.  As long as they were able to sell it to a 
co-operative partner they could have a similar arangement to Qantas / 
Origin.

>
> Selling a large holding in ANZES, their Engineering Business.
>

Yes that might be another good move.

>
>
>Ceasing to operate any/all unprofitable routes eg. regional Aust.
>and NZ. Cancelling the remaining new Beech Aircraft on order for NZ
>regional services. Transferring the two new Boeing 767 aircraft due
>to commence sevice with Air NZ shortly, to Ansett. Down sizing Air
>NZ and transferring all available resources including Head Office,
>to where the attention is needed and where the turn around story is
>- Australia.
>
>
You speak as though a turnaround of Ansett is possible in the 
forseeable future.   Ansett have lost 10% market share (down from 
around 50% to 40%) in Australia which in a tight margin game with 
high capital costs like the airline business is very serious indeed.  
The only way out I can see for them is to come to some sort of 
arrangement with Virgin Blue.   Any other way looks very drawn out 
and expensive to me.
>
> 
>The NZ Govt have the opportunity to allow increased foreign 
>ownership  but with controllable restrictions
>, ie they can have some on-going influence.
>If they simply say 'sorry, can't help',AIR NZ/ANSETT  may
>well become  ANSETT/air nz.  If the Labour Government get
>this wrong, look out Air NZ employees, Air NZ Brand,and look MUCH
>further into the future,Air NZ shareholders.
> 
>
The Labour/Alliance government is in no way responsible for Air New 
Zealand's problems.  And despite Toomey's public rhetoric, allowing 
Singapore Airlines to take 49% of the airline will *not* help Air NZ 
that much.  Such a deal won't raise anywhere near the amount of 
capital they need and may well jepordise AIR NZs international 
landing rights.   

Have you considered what will happen if subsequent to Singapore 
Airlines taking 49% of Air NZ, the subsequent cash issue goes 
ahead?  BIL have publically stated they won't support it (BIL hold A 
shares), and with the recent record of other New Zealanders investing 
in Airlines (Qantas NZ/Tasman Pacific) I can't see a a big pool of NZ 
funds waiting to take up those rights.  So if all the B rights are 
taken up, but the A rights are not, this means Air New Zealand will 
become overseas controlled, which will put their landing rights, and 
all their international business at serious risk.  Effectively Air 
New Zealand would be finished under this scenario.

The way I see it Air NZ have painted *themselves* into a corner.  I 
think they were unlucky with the big hit in fuel prices and $US lease 
costs that the exchange rate fall caused them, plus the downturn 
in Business due to the millennium and the Olympics, but "hey that's 
business."     The only solution I can see for Air New Zealand (apart 
from selling off Ansett completely) is to sell half of Ansett to 
Singapore Airlines now.  SNOOPY

Disclosure Hold AIRVB



  
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