No word yet on discount Air NZ

By Phil Boeyen, ShareChat Business News Editor

Friday 3rd May 2002

Speculation that Air New Zealand (NZSE: AIR) will move to a low-cost carrier model is yet to be confirmed after the company's board meeting this week.

Chairman John Palmer has told the market that the board is conscious of public speculation over what was discussed at Thursday's meeting, but he is not giving much away at this stage.

"The board met to consider the current status and direction of its strategies being developed to reflect the aviation industry environment and public expectations of air travel.

"This is a major strategic issue which will impact the company for the next few years. The analysis involved is extensive and is ongoing."

Mr Palmer says the airline's board is satisfied with the pace and direction of the strategies being developed.

"Premature signalling of its intentions could prejudice the prospects of success by allowing competitors to initiate counter-strategies.

"The company also has an obligation to discuss potential changes and implications with staff and that process is at an early stage."

The airline says that further details will be released as it moves to implement significant elements of the new strategies.

Earlier this week the company released a market update showing it now expected to break even in the year ended June, "comfortably exceeding" previous estimates of a $63.4 million loss. The news added to an already strengthening share price.

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