Singapore brush-off for Qantas

By DANIEL RIORDAN aviation writer

Singapore Airlines has poured cold water on Qantas Airways' proposed buy-in to Air New Zealand, ahead of Monday's meeting of Air NZ directors to consider various options for the airline's future.

Normally reticent Singapore bosses broke their media silence in Sydney when questioned by Australian media after meetings on Thursday with Air New Zealand's independent directors.

Singapore chief executive Cheong Choong Kong indicated he would rather buy a "large" direct stake in Ansett and maintain or enlarge its 25 per cent shareholding in Air NZ, rather than sell to Qantas.

Under the Qantas proposal, final details of which have yet to be presented to Air NZ, Singapore and Brierley Investments would sell a large part of their combined 55 per cent stake to Qantas, and Singapore would own Air NZ's troubled subsidiary Ansett.

Dr Cheong had earlier outlined his preferred plan to an independent committee of the Air NZ board, led by acting chairman Dr Jim Farmer, at a meeting in Sydney's Regent Hotel. Qantas and Brierley Investments also met separately with the directors.

Afterwards, Dr Cheong emphasised the need to resolve Air NZ's future quickly. He also confirmed that Singapore Airlines was seeking a meeting with the NZ Government in an attempt to obtain approval to lift its stake in Air NZ above 25 per cent. Singapore has previously stated its desire to move to 40 per cent, but that would require New Zealand Government approval.

Dr Cheong scotched suggestions that Singapore Airlines would abandon Air NZ.

"We quite like these chaps," he was reported as saying. "Singapore Airlines does not invest in airlines lightly, but rather for the longer term. We are here to stay."

A Singapore spokeswoman was asked yesterday to elaborate on Dr Cheong's statements, but had not responded by press time.

Meanwhile, Treasury expects to receive within a week a report it commissioned two weeks ago from Wellington merchant bank Cameron & Co, examining the implications of various scenarios for Air NZ's future.

One of the scenarios is understood to include an injection of taxpayer money through a capital notes issue of several hundred million dollars. However a spokeswoman for Finance Minister Michael Cullen said Cameron and Co was unlikely to suggest a state bailout, and emphasised that the airline had not approached the Government about a cash injection.

The report will also examine the impact of raising the total cap on foreign airlines' ownership of Air NZ from 35 per cent. Treasury said the report aimed to arm the Government to deal with various proposals for changing Air NZ's ownership, and should not be interpreted as containing recommendations.

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