Qantas reserves seat for Air NZ

By DANIEL RIORDAN aviation writer

Qantas Airways has offered Air New Zealand's chairman a seat on the Qantas board as its battle with Singapore Airlines (SIA) for a majority stake in the national carrier intensifies.

The offer was made in a letter from Qantas managing director Geoff Dixon to Finance Minister Michael Cullen outlining the reasons Qantas' "partnership" with Air NZ would be a better outcome for New Zealand than the SIA deal.

Mr Dixon said he would recommend to his board that Air NZ fill a vacant position on the Qantas board, should Qantas' tilt at Air NZ succeed.

Dr Cullen has been overseas for the past two weeks and has yet to reply to the letter.

Yesterday, he paid a "courtesy call" to SIA head office on his way home from Britain. The meeting was requested by SIA.

Dr Cullen told Singapore media that the Government is being asked to make a commercial decision about Air NZ.

"The commercial decision really is, how important is Ansett to Air New Zealand's future?" he said.

"Ansett is not a New Zealand brand. We want to expand New Zealand brands."

Qantas' proposal would involve buying and retaining SIA's 25 per cent stake, buying and offloading Brierley Investments' 30 per cent stake - even if it meant a loss for Qantas - and selling Ansett to SIA.

Qantas held talks with Brierley last week and was reported to have offered more than $2 a share for its stake. (Air NZ A shares closed at $1.09 yesterday.)

But Qantas is very much on the sidelines as Air NZ continues to promote increased investment from SIA as its preferred option for securing its long-term future. That is also the plan SIA favours.

Qantas chief financial officer Peter Gregg is today to meet a high-powered group of officials from the Treasury, the Ministry of Transport, the Department of the Prime Minister and the cabinet.

Later in the day, Air New Zealand chief executive Gary Toomey meets Transport Minister Mark Gosche in Auckland, and tomorrow Mr Toomey travels to Wellington to meet the officials.

Air NZ submitted a draft proposal to the Government for SIA to lift its stake beyond the 25 per cent foreign-airline cap two weeks ago.

Talkswith officials since have produced the final proposal.

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