Airline shares dive then climb

By Phil Boeyen, ShareChat Business News Editor

Monday 10th September 2001

Air New Zealand (NZSE: AIRVA) shares endured a bumpy ride Monday, sold down in early trading to new lows only to recover later in the day and improve on Friday's close.

Speculation that the company could be forced to dump its loss-making Ansett subsidiary, sparking an even larger write-down than forecast, knocked the beleaguered airline's shares in early in the morning.

Its A stock hit a new low of 60 cents a share while the B shares were hammered down to 71 cents.

However some further reassuring words from the airline managed to save the day, with Air NZ boss Gary Toomey announcing the company was advancing its work to support on-going operations.

"This morning, we've initiated serious discussions with the Australian Government on the future for Ansett. I have spoken to Prime Minister John Howard in Washington this morning to open the dialogue," Mr Toomey said.

"We're making significant progress with Air New Zealand, our major shareholders and the New Zealand Government with more work to do yet."

"Today, we'll be seeing what we can achieve with the Australian Government to find an outcome that'll be in the best interests of Australian travellers, our loyal Ansett staff, as well as our shareholders."

Earlier in the day acting Air NZ chairman, Jim Farmer, said the company is working with major shareholders Brierley and Singapore Airlines, and with the New Zealand government, to ensure the future of Air New Zealand's domestic and international services.

He also revealed that the company had been discussing Ansett's future with Qantas, but those discussions were terminated because of adverse comments made by corporate watchdog, the Australian Competition and Consumer Commission.

Air NZ A shares finished the day up two cents on Friday's close at 72 cents while the B shares fell closed even stronger, up 7 cents at 88 cents.

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