Tuesday, 11 September 2001

The Australian Government’s Chickens Have Flown Home To Roost With Air New Zealand’s Problems

The Australian Government’s chickens have flown home to roost with the collapse of Ansett Australia. “While Australians will be quick to point the finger at New Zealand, it was the Australian Government’s decision to force Air New Zealand to buy the ailing airline as quid pro quo to letting it have a slice of the domestic market; a decision that failed to address the latent problems already evident in Ansett Australia in the mid 1990s,” said Party Leader Graham Capill.

“The New Zealand Government is not blame free either,” added Mr Capill. “Its management of the situation is abysmal. It has sat on the fence and failed to even keep the
Air New Zealand Board informed of the Australian Deputy Prime Minister’s visit to discuss the airline. How can you rescue an airline when the Kiwi shareholder won’t even talk to you?” Mr Capill asked.

“The New Zealand Government should not now be drawn into committing tax payer money to prop up Air New Zealand as a result of its financial difficulties.

“Christian Heritage believes that lifting the foreign ownership cap to 35%, in line with the cap placed on overseas consortiums, would be appropriate. Raising it to 49%, however, would be to place the national airline at risk from decisions being taken that might not be in the best interest of New Zealand in the future.

“The Government has a responsibility to ensure New Zealand’s sovereign position is protected from foreign manipulation, especially at a crisis time like this. While the Act Party argues that Air New Zealand should be part of Singapore Airlines, surely New Zealand’s willingness to flick off Ansett Australia the moment it cannot solve a financial problem is a lesson in what foreign owners will do when faced with a crisis. Loyalty does not factor in the commercial equation.

“The real problem is the New Zealand Government’s vacillation and failure to show leadership in dealing with the Australian Government.

“The Government’s role should be limited to one of facilitator and regulator to ensure fairness in the industry. It should be doing more to facilitate greater options for
Air New Zealand, especially in talking to the Australian government as they have the most to lose. At the very least they should have been communicating more with the Air New Zealand Board.

“What must not happen now is the state funding of a commercial enterprise. That would be untenable to most tax payers,” Mr Capill concluded.

END

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