Airlines coy on cornerstone stake

By DANIEL RIORDAN

Air New Zealand says it is talking to Qantas about the Australian carrier taking a cornerstone shareholding, but both parties are being coy about their discussions.

Responding to speculation, both airlines put out brief statements yesterday confirming discussions were taking place but downplaying their significance.

Air New Zealand chairman John Palmer said the airline had been talking with Qantas on a range of issues, including a Qantas shareholding, since May last year.

"The parties continue to discuss options but nothing has been agreed."

Qantas chief executive Geoff Dixon also said the two were discussing a wide range of business issues, including a minority Qantas shareholding in Air NZ.

Those issues are understood to include engineering work Air NZ is doing for Qantas and talks about Qantas providing feeder services for Air NZ in Australia.

Qantas has made no secret of its desire for a cornerstone stake in Air NZ since making its first approach last May as a counter to an Air NZ-backed proposal for the Government to allow Singapore Airlines to lift its ownership. That would fit in with the Government's intention, stated when it became a majority shareholder in January, of eventually selling a cornerstone shareholding to a company with expertise in aviation.

A spokeswoman for Finance Minister Michael Cullen said yesterday Qantas had been upfront about wanting control of Air NZ but there was "no proposal before the Government at this stage". Air NZ's share price closed 1c higher yesterday at 69c.

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