Govt opens door to SIA proposal

The Government said yesterday that it would consider any proposal by Singapore Airlines to lift its stake in Air New Zealand beyond 25 per cent, but it had yet to receive one.

"We are watching developments closely and would consider any proposal that comes before us, but obviously any changes of that nature would need to be discussed by cabinet for a Government position," a spokesman for Acting Prime Minister Jim Anderton said.

Under the Government's controlling Kiwi share agreement, no single foreign airline or airline interest may own more than 25 per cent of a New Zealand international airline and foreign airlines or airline interests in total may own a maximum of 35 per cent.

Air New Zealand chairman Sir Selwyn Cushing said he was keen to lift the 25 per cent share cap as it would improve Air New Zealand's ability to raise capital to pay for the acquisition of new aircraft.

Air New Zealand wants to replace a fleet of 10 Boeing 767s operated by its wholly owned subsidiary Ansett Australia.

The planes have been grounded since last Thursday over safety and maintenance concerns and have an average age of 16 years.

Sir Selwyn said in a phone interview that he was confident that the Air New Zealand board would support any Government-sanctioned bid to lift its holding beyond 25 per cent.

He said that if Singapore Airlines was able to increase its shareholding that would facilitate the raising of further capital that could be used to expand the company's fleet.

"The Air New Zealand board I'm certain, and this is only a personal view, would be supportive of an increased stake by Singapore Airlines.

"But the quantum and restriction, if there is any, is entirely over to the [New Zealand] Government."

Sir Selwyn said that any approach to the Government on lifting the cap would have to be made by Singapore Airlines chief executive Cheong Choong Kong directly.

The Government had to be mindful of bilateral landing rights agreements, which could be affected by lifting the share cap.

A representative of Singapore Airlines was not immediately available for comment, but the airline said in an earlier statement that its immediate priority was to provide as much help as it could to Ansett.

"We are in constant touch with Air New Zealand management and have assured them of our support."

Prime Minister Helen Clark told Hong Kong media on Tuesday that government policy on Air NZ's shareholding had not changed: "Current government policy, not only under this Government but under previous governments as well, sets the maximum (on foreign holdings) at 24.9 percent." However, her staff told NZPA that Miss Clark was unhappy at one report by a foreign agency which took her comments to mean there would be no look whatsoever at relaxing the rules.

A spokeswoman for Transport Minister Mark Gosche said the minister would be happy to discuss lifting the share cap, but as of today there was no change in the Government's position.

"The Government has no change to the position that we have always had," the spokeswoman said.

She said that Mr Gosche would make no further comment.

Air NZ shares recovered their previous day's losses in heavy trade.

- REUTERS