Air NZ to massively cut its international capacity as demand plummets, Grant Bradley reports.
The Government is in direct talks about assistance with New Zealand's major airports, which have plunged from profit machines to credit risks in a matter of weeks.
Finance Minister Grant Robertson gave fresh details of conversations the Government is having with major New Zealand companies at the end of aweek which saw it promise to guarantee billions in loans to mid-sized businesses.
"Myself and others have been talking to the airports. We're taking that step by step. They remain an important part of New Zealand's infrastructure," Robertson said.
"We need people and goods to be able to move around New Zealand when we move out of level four, in terms of people. While we're in level four we still need goods to be going, and airports are an important part of that," Robertson said.
Robertson is already guaranteeing loans to Air New Zealand, which could ultimately be converted into the Government increasing its shareholding in an airline that described itself in a state of virtual "hibernation" this week.
There are a number of different mechanisms for helping big businesses such as airports, Finance Minister Grant Robertson says.
Auckland Airport issued the latest in a string of warnings to investors this week, saying it was deferring capital investment with passenger numbers falling close to zero.
After a series of requests, the company confirmed in a statement that it was solvent.
Wellington and Christchurch airports have also warned of a sharp decline in revenue.
Credit ratings agencies have downgraded airports across the world.
Robertson would not confirm what kind of assistance the Government could provide major airports, which traditionally have provided strong dividends to the councils which part-own them. Figures in the business industry have speculated it could assist the airport's planned investments in its domestic terminal.
The Finance Minister said he would protect the interests of taxpayers.
"If, and it's an if, I'm not saying we are giving assistance to the particular group [airports], but if we were going to go down that path, there are a number of different mechanisms.
"It might be commercial loans. You saw with Air New Zealand, it was effectively a convertible loan. So there are a number of different ways that can be looked at," Robertson said.
"Absolutely, while we're spending a lot of money to support New Zealanders, I'm also aware of the responsibility on me, on behalf of New Zealanders, to also protect the economy of New Zealand as well."
Robertson said he, officials, and business contacts were assessing the condition of different sectors, focusing on strategic sectors.
"The utility-type companies, telecommunications-type companies, they're all fine and good. Dealing with heavy loads, but as businesses, they're in pretty good shape," Robertson said.
"Banks, large food retailers, they're obviously doing alright.
Retailers were generally in good shape, but appeared to point to changes in that sector being common.
"Retailers fall into those ones where there's just no activity but they're by and large good. You'd certainly see in that sector, some of that high turnover of business in normal times, you've got to bear that in mind."
