Airline plots route changes

By Phil Boeyen, ShareChat Business News Editor

Thursday 4th October 2001

Air New Zealand (NZSE: AIRVA) is planning a number of route changes in the wake of both the Ansett collapse and the US terrorist attacks.

The company says it has been considering reductions to international and domestic network schedules and will announce details as soon as the new board has approved them.

"These changes to frequency, routes and aircraft type will reflect the reduction in trans-Tasman feed as a result of the closure of Ansett and the consequences for international aviation of the terrorist attacks in America," says acting chairman Jim Farmer.

"The planned changes will achieve significant cost reductions to reflect the reduction in capacity and details of these will also be announced shortly."

Dr Farmer says looking further ahead the company is well-advanced in preparing a business plan for board consideration reflecting the circumstances in which it is now operating.

The airline announced early Thursday that the Crown is to become the majority shareholder in the company, taking an equity stake of up to $885 million dollars to keep the business in the air.

At the same time company revealed that shareholder funds had fallen to $156 million after recognising further losses of around $350 million from the closure of Ansett.

Despite the dire situation Dr Farmer says the company is grateful for the co-operation of all parties in coming to an agreement to secure the airline's future.

"The recapitalisation agreement contains arrangements that will enable Air New Zealand to start a process of recovery from the severe setbacks it has suffered on several fronts.

Finance Minister Michael Cullen, in supporting the rescue package, says it is important to the economy in general, and to the tourism industry in particular, that the airline continues to function as a national flag carrier promoting the New Zealand brand abroad.

"We have had to wait a frustratingly long time to reach this stage. I hope events will now be able to move much more swiftly," he says.

Mr Cullen says the package was drawn up after agreement was reached with Ansett's voluntary administrators on Wednesday to settle amounts due.

"The effect of the Ansett deal was to give us a much, much clearer picture of Air New Zealand's potential liabilities and therefore a much firmer basis on which to develop a recapitalisation strategy."

Comments from our readers

No comments yet