Airline ownership: it's a complicated business

Qantas has announced it intends to buy a controlling stake in Air New Zealand.

If it is successful, the change of ownership will further complicate who owns what in the battle for a piece of the Australasian sky.

The three main players flying in New Zealand are national carrier Air New Zealand, Australia's national airline, Qantas Airways, and Nelson-based Origin Pacific.

The most complex ownership arrangement belongs to Air New Zealand. The airline is divided into A shares, which have to be owned by New Zealand nationals, and B shares, which are freely tradeable.

The A and B share structure prevents more than 49 per cent of the airline being owned overseas.

The Government's policy is that no foreign airline may own more than 25 per cent of a New Zealand international airline. Total foreign airline interests cannot exceed 35 per cent of the share capital.

At present, Brierley Investments owns a 30 per cent stake via A shares and Singapore Airlines owns 25 per cent via the B shares.

BIL is now based in Singapore. To circumvent the rule about national shareholdings, it put its 217 million A shares in a New Zealand company trust controlled by prominent New Zealand business figures.

Air New Zealand itself wholly owns no-frills service Freedom Air, as well as Mount Cook, Eagle Air and Air Nelson. It also owns 100 per cent of Ansett Australia.

Qantas set up here in its own right after its local franchise failed last month, and is flying the main routes. British Airways owns 25 per cent of Qantas.

Qantas and Origin Pacific are finalising an alliance whereby Origin Pacific will link into Qantas' main trunk routes from the provinces.

Origin Pacific operates out of Nelson and was set up by Robert Inglis and partner Nicki Smith. Mr Inglis is the biggest shareholder with 71.2 per cent.

Nicki Smith holds 17.8 per cent and the remaining 11 per cent is owned by senior management.

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