Air NZ's future the subject of Sydney talks

By DANIEL RIORDAN aviation reporter

Brierley Investments is maintaining the pressure on Air New Zealand ahead of meetings today in Sydney to discuss a proposed Australasian aviation super deal.

The airline's independent directors are scheduled to talk separately with representatives of Singapore Airlines and Qantas Airways ahead of a full board meeting on Monday at which all options for the airline's future are expected to be discussed.

Brierley may also meet the directors, although the investment company declined to comment on any meeting.

In remarks interpreted by some in the market as timed to coincide with the meetings, Brierley chief executive Greg Terry yesterday called for the dismantling of Air NZ's A and B share structure, under which the Government ensures the airline remains majority owned by New Zealanders.

Mr Terry said that if there was just one class of share it would be easier for the airline to raise money in Australia, where more than half its revenue is derived through troubled subsidiary Ansett.

He said the airline's national flag carrier status could be maintained by increasing the power of the Government's golden share, although he did not specify how that could be done.

Brierley chief financial officer Andrew Shepherd said the Government could still choose who it allowed to come on to the share register, on the basis international air rights were not affected.

Mr Terry continued to play hard ball over any exit from the register, saying Brierley would not sell its 30 per cent stake unless it was offered around double the present share price of $1.10 a share. Brierley owns 229.5 million A shares (available only to New Zealand residents), worth $504 million at $2.20.

He also said Brierley would not be putting more money into Air NZ unless it was clear the money would get a positive return.

Brierley has 85,000 resident shareholders in New Zealand, who would not want the company to put up $1.50 and have it worth $1 two days later, Mr Terry said.

Transport Minister Mark Gosche said yesterday that he had yet to see anything formal on the proposed deal, the basis of which would involve Qantas buying Singapore Airlines' 25 per cent stake alongside Brierley's shares, and Air NZ selling Ansett to Singapore Airlines.

Meanwhile, a survey by research house Datex of eight broking firms shows a wide range in analysts' June-year profit forecasts for the airline.

The mean expectation is a loss of $172 million, within a range of negative $211 million to negative $112 million. The mean loss for June 2002 is $99 million.

UBS Warburg aviation analyst Tim Ross expected a pre-abnormals loss of around $200 millio,n which, after asset sales, would result in a reported loss of around $119 million.

Air NZ chief executive Gary Toomey this week scotched Australian media reports that Air NZ was set to report a pre-tax, pre-abnormals loss of close to $300 million, with Ansett losing almost $500 million.