Singapore Airlines cleared to increase investment in Air NZ

Singapore Airlines has won Government approval to lift its stake in Air New Zealand and lead a multimillion-dollar bailout.

Finance Minister Michael Cullen announced the approval late last night as Air NZ and its major shareholders worked on getting the rescue package together before the airline today announces its June-year result, which will disclose large losses.

Dr Cullen said it was also "extremely likely" that the airline's A and B shares would be merged.

The announcement capped a dramatic day in which Air NZ said it was putting its debt-ridden subsidiary, Ansett, Australia's second-biggest airline, into voluntary administration.

Air NZ has sought financial backing from the Australian Government so Ansett can keep flying while an employees' buyout proposal is brought to fruition.

But Australia's securities watchdog wants an assurance that Ansett will be able to meet all employee entitlements, including redundancy.

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