Ruling clears way for Air NZ

By DANIEL RIORDAN

Air New Zealand's $885 million taxpayer-financed rescue package looks assured after an Australian Federal Court decision last night.

Justice Alan Goldberg approved Air NZ's $A150 million ($182 million) cash offer to limit its liability to Ansett's administrator, protecting it from any future claims related to the collapse of its former subsidiary.

The deal, which also includes the waiving of $A160 million ($194 million) of Ansett's debts, overrides a $A400 million letter of comfort signed by Air NZ directors on August 8 and takes away Ansett's right to pursue Air NZ and its directors for future payment.

Court approval was a condition of the Government's rescue package.

It also still has to do due diligence on the price it will pay for up to 83 per cent of the airline.

The Government gave itself until next Friday to pay the first instalment of $300 million, and indicated yesterday that the money could be paid early next week.

Air NZ's banks also said they would waive the airline's defaults only if the Ansett deal was approved.

Justice Goldberg said it was up to the Ansett administrator to decide how to use the $A150 million.

Australian Transport Minister John Anderson has said he would prefer the money to be spent on meeting Ansett workers' entitlements, jeopardising the administrator's plans to keep a slimmed-down version of the airline in the air while it looks for a buyer.

The court decision was given in Melbourne after a last-minute submission from a group calling itself the Travel Compensation Fund.

It claimed ratifying the deal might jeopardise compensation payments.

But Justice Goldberg ruled that its concerns were baseless.

Earlier in the day, the Government said it was satisfied with initial changes to the Air NZ board which reduced the number of directors from 13 to eight and removed Brierley Investments' representatives.

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