Airlines and BIL meet to try to hold back red-ink riptide

Friday 15th June 2001

By Nick Stride

Air New Zealand's embattled board meets on Monday to decide its stance on a mooted carve-up of the Australasian airline market.

The airline and its major shareholders, Brierley Investments and Singapore Airlines, met in Sydney yesterday to discuss their positions and to talk to Australian flag carrier Qantas, which proposes a "partnership" which will see it buy a stake in Air New Zealand.

Also on the table is a proposed sale to Singapore Airlines of Air New Zealand's Ansett subsidiary.

The airlines, and BIL, face a tide of red ink from high fuel prices, cutthroat competition, and the weak Australian and New Zealand currencies which have blown out costs.

But Air New Zealand chief executive Gary Toomey this week rubbished estimates Ansett would lose $500 million this year, saying the loss would be "nowhere near" that figure.

Analysts' estimates of Air New Zealand's June-year result vary widely, with the most optimistic expecting a loss of $112 million and the most pessimistic forecasting a $211 million deficit.

BIL chief executive Greg Terry called for Air New Zealand's "A" (New Zealanders only) and "B" (any owner) share structure to be dismantled.

BIL wants to sell its $229 million A shares but has said it won't accept the $1.10 market price.

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