Big Ansett loss denied

Air New Zealand-Ansett chief executive Gary Toomey yesterday rejected a report that Ansett was about to post a $A400 million ($500 million) loss for the year ending June 30.

Mr Toomey said Ansett's losses had not suddenly ballooned and would be "nowhere near the figure bandied about."

He said the group remained comfortable with the range of market forecasts for this year's result.

"We are cognisant of continuous disclosure requirements," he told Australia's National Aviation Press Club in Sydney.

"Obviously, we are comfortable with the current level of analysts' expectations for this financial year."

Mr Toomey declined to confirm whether the average prediction among analysts of a loss of about $NZ200 million for the Air NZ-Ansett group was the figure he was referring to. "I've said what I've said."

Yesterday, the Sydney Morning Herald reported that Ansett, which had its fleet of Boeing 767-200s grounded at Easter because of safety concerns, was poised to post a $A400 million loss.

The figure was a $A510 turnaround from last year's profit, and the newspaper said Ansett's poor performance would mean the Air NZ-Ansett group recording a pre-tax loss of more than $NZ300 million.

Meanwhile, Mr Toomey described Qantas' bid for a significant stake in Air NZ as "a logical way to proceed."

But he also said he did not want to compare its merits with other proposals to be put to the Air NZ board next Monday.

"There are several options," he said, declining to specify the number.

Under the Qantas offer, the Australian airline would acquire up to 49 per cent of Air NZ, while Ansett would be sold to Singapore Airlines (SIA) to alleviate competition concerns.

However, the plan would have to overcome political opposition in New Zealand and regulatory hurdles.

Mr Toomey said Air NZ's capital demands for next year would depend on what scenario was adopted.

Meanwhile, Mr Toomey defended Air NZ's purchase of Ansett, which was completed last year when it acquired News Ltd's 50 per cent ahead of SIA.

Mr Toomey, who was with Qantas management at the time, said the acquisition of Ansett gave Air NZ market access that was otherwise denied, and benefits in scale and efficiency.

"Armed with perfect hindsight, some suggest they paid too much: it was an investment they could not afford to make," he said.

"With the facts available at the time - and the knowledge of the price another bidder was prepared to contemplate - I'd say it was an investment that Air NZ couldn't afford not to make."

- NZPA

www.nzherald.co.nz/aviation

Air wars - the cast list

www.nzherald.co.nz/travel