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Down to the wire for Air NZ

By Phil Boeyen, ShareChat Business News Editor

Monday 27th August 2001

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Air New Zealand (NZSE: AIRVA) should know just in time for its annual meeting whether the government will allow Singapore Airlines to take a bigger shareholding in the company.

Cabinet has been discussing the airline's future again today and Prime Minister Helen Clark says it expects to have a final discussion on the matter at the cabinet next Monday.

"We are, through the negotiator, in continuing contact with Air New Zealand. We should be able to enable them [Air New Zealand] to meet the requirements they have."

Ms Clark has reiterated her view that the government has no desire to be involved in the commercial affairs of the airline but also says that the overriding consideration is a viable New Zealand airline.

"The kiwi share arrangement is as far as any government envisaged it would ever go when the airline was privatised more than a decade ago. It is not our wish to go near a shareholding."

Ms Clark has refused to accept that the government would find itself in a lose/lose situation because it would be criticised whatever its decision.

"Air New Zealand's financial issues are not of the government's making."

"Obviously the issues raised by the purchase of Ansett give Air New Zealand a few things to work through and Ansett has to track its way back to profitability. But those are commercial issues."

Ms Clark says in the quite recent past Air New Zealand has been a strong airline and the government's desire is to see it return to that status.

The airline's boss, former Qantas executive Gary Toomey, laid down the gauntlet to the government in a recent speech, urging them to lift the restriction on foreign ownership so Air New Zealand could become one of the world's top carriers rather than a regional business.

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