Air NZ places its future in government hands

By DANIEL RIORDAN aviation writer

Air New Zealand yesterday submitted its formal proposal to Government for greater investment from Singapore Airlines, and prepared to appeal to the public's sense of national interest to help make its case.

Airline executives, but not chief executive Gary Toomey, met Transport Ministry officials in Wellington and handed over what the Minister's office said was a draft formal submission.

The ball is now more clearly in the Government's court. Although Mr Toomey hopes to meet Government representatives early next week to discuss the proposal, a spokeswoman for Minister Mark Gosche said no ministerial meetings with Air NZ had been scheduled.

Mr Toomey was unavailable to comment yesterday and an airline spokesman refused to elaborate on the submission.

During the weekend, market researcher UMR Insight conducted a poll which included several questions on Air NZ.

Interviewees were asked whether they would support the Government allowing Singapore Airlines to own up to 49 per cent of the national flag carrier, whether they would approve Qantas taking a major shareholding and what their attitude would be to the Government injecting hundreds of millions of dollars into the airline.

It's not known if Air NZ commissioned the poll, but in recent days Mr Toomey has become more aggressive in promoting the Singapore option.

A source close to the company said this was part of a bid to win public support for the plan.

Mr Toomey has retreated from comments in Australia on Sunday that selling Ansett Australia was a possible Plan B - saying he was misquoted - and on Wednesday he said Air NZ could eventually fail if the Government blocked increased investment from Singapore.

He described talks with Australian Prime Minister John Howard as encouraging, but said winning the support of the New Zealand Government was essential.

Mr Toomey said he was at a loss to understand why the Singapore proposal was not being viewed more positively.

Air NZ's tougher stance follows a move by Singapore's rival suitor, Qantas, which on Monday told the Government it would settle for a 25 per cent stake in Air NZ, buying out Singapore, provided 30 per cent shareholder Brierley Investments could be sidelined.

One of the ways Qantas could do that, said chief financial officer Peter Gregg, would be to buy BIL's stake and sell it again, even if that meant a loss to Qantas. But Singapore has said its stake is not for sale, so Qantas' chances appear close to nil.

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