Forum Archive Index - December 2002

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

Hi ichi

>>
>> 
>>The goverment was the lender of last resort.
> 
>
>That's a novel idea.  The directors of a *private* company 
>can make bloody-stupid decisions, run the company into the 
>ground, and then expect the guvmint to bail them out.  
>
>

No, the bailing out was not done for Air New Zealands sake. The 
producers of goods with a short shelf life having painstakingly built 
up an overseas market over many years, and those high tech 
manufacturers who rely on air freight of parts for emergency 
servicing of their overseas installations, and tour operators holding 
full bookings for their tour buses for the summer season were faced 
with a considerable, possibly catastrophic, loss of business through 
the blocking of the air corridoor conduit.  The threat of an almost 
total strangling of the passenger and freight system through 
absolutely no fault of their own is not something that can be 
reasonably planned for by these totally innocent business people.  
*It was right IMHO, for the government to step in to help these 
totally innocent parties that are the engine of growth for the New 
Zealand economy.*

Furthermore ichi, you seem to imply that Air New Zealand were somehow 
'winners' with the bail out.  But were they?

Despite the 'bail out', shareholders who have held on all the way 
through the Ansett purchase have lost around 75% of their investment. 
 The government has not recompensed them for this.

The directors and senior staff of Air New Zealand have not been 
'bailed out' by the government with this debacle.  Most have lost 
their jobs.

>
> 
>>The government rescuing Air New Zealand was not a matter 
>>of principle as you imply.  Given they had decided 
>>we needed a New Zealand controlled airline
> 
>Decided?  On what basis?  
>
>

On the basis that an airline headquartered here in New Zealand would 
best serve the interests of New Zealanders.  

I am sure you disagree with that proposition.  But disagreement does 
not constitute an excuse for not being able to have any feeling for 
the 'other sides' point of view.

>
> 
>Is that just mindless nationalism, or is there some tangible
>benefit from being New Zealand controlled (whatever that 
>means).
>
>

Let's put it another way.  Why should an entity controlled by the 
Singaporean government (Singapore Airlines) make any extra effort to 
promote New Zealand?  Would you expect 'your' government to look 
after 'your' 'home market' first, or favour advancing the interests 
of foreign nationals in other countries instead?

>
> 
>>it was the only option.
> 
>Actually, there were lots of options.  Unfortunately the
>best options were wrecked by government interference and
>dithering.
> 
> 

The best option would have been not to buy Ansett, at least the last 
50% of it, at all.  But with hindsight that is an easy thing to say.

Given that the NZ government decided they wanted an NZ controlled 
Airline, a cash investment by the NZ government was the only way to 
go, once the crisis point had been reached.  I didn't see your hand 
going up volunteering to put $NZ1bn in yourself ichi.

SNOOPY


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