Forum Archive Index - October 2001

["Malcolm Cameron" <malharcameron@hotmail.com>]

Bruce
MR Toomey in some of his Australian statements gave me the impression, and 
this is MHO that his job was to sell a large proportion of Ansett to 
Singapore airlines
malcolm cameron




>From: "Bruce Harris" <bruce99@freemessage.com>
>Reply-To: sharechat@sharechat.co.nz
>To: sharechat@sharechat.co.nz
>Subject: [sharechat] Air NZ and the Government
>Date: 3 Oct 2001 06:27:25 -0000
>
>Intuitively I would resist the government having any involvement in Air NZ- 
>especially a government whose natural instincts are not business oriented. 
>However it is not obvious that the alternatives are palatable to any of the 
>stakeholders, be they shareholders, staff, provincial passengers, tourist 
>oriented businesses, or even citizens of the country who just feel better 
>about having an Air New Zealand.
>Brierley and SIA’s interest in adding money had clearly gone- even if they 
>did the pound of flesh in terms of increased shareholding would not have 
>been acceptable I believe either to the other shareholders; or just as 
>importantly to all the other stakeholders above. Would there have been 
>other international investors to come up to the plate and look after the 
>interests of the stakeholders? In the current environment- with SwissAir 
>falling over and other airlines in desperate straits, noone else would have 
>touched it and given any kind of commitment to NZ’s wider interests. Would 
>there have been other local investors ready with a $billion? Doesn’t even 
>need asking.
>
>To let Air NZ into statutory management – if the sole objective was to 
>protect creditors and maximise value- would have left NZ at best with a 
>bare bones airline, and without sounding too dramatic, third world status 
>just around the corner, and a huge hit for the tourist industry as well as 
>the psyche of the country.
>
>Still I hope that any deal limits paying Brierleys or SIA any kind of 
>excessive premium for their stakes- they really have to take a lot of 
>responsibility for getting Air NZ to where it is. Also hopefully any 
>government funds have limited exposure to Ansett debts- the more the saga 
>unfolds, the clearer it is that Australian unions and the Aust government 
>were at least partly culpable for the Ansett demise.
>
>As well the future airline governance system will need to be absolutely 
>commercial- this will present challenges, but I suspect the government can 
>manage that- if they don’t they also will have to make those tradeoffs like 
>do we do extra operations at the local hospital, or keep staff or routes we 
>don’t need at Air NZ.
>
>It will also be interesting to see what is in store for the minor 
>shareholders (I am one, for the record) - are they offered or expected to 
>front up for a rights issue. Either way you could not make a good call 
>without knowing details of debt in total and exposure to Ansett. On these 
>matters Air NZ seems to remain very silent.
>
>As a related matter I note that Air NZ have taken offense at media 
>suggestion that Mr Toomey’s days are numbered. This to me is a stupid 
>denial by Air NZ, and hurts their credibility. The whole world can work out 
>that Mr Toomey can sensibly have no place as Air NZ’s CEO in the future; 
>unless he’s willing to be say the CFO at say a sixth of his salary, then he 
>has to go. I sympathise with the fact that he’s had a tough year, but one 
>or two of his calls have been extraordinarily bad. I still cannot fathom 
>why the Ansett costs, staff levels, routes were not dramatically cut to fit 
>their revenues. I understand considerable union resistance and Aust Govt 
>resistance, but the option was not even addressed until the week before the 
>whole plug was pulled. Reports suggest this was Toomey’s call against the 
>advice of some of his colleagues. If they were not his call, then I have 
>some sympathy, but he’s still the man in charge.
>
>Regards, Bruce
>
>
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>
>
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