Time running out for Air NZ bailout plan

Air New Zealand's major shareholders will be asked today to affirm their commitment to the national carrier's $850 million rescue package.

Brierley Investments (BIL) and Singapore Airlines (SIA) have agreed to each contribute $150 million of new capital, with the Government providing a $550 million loan.

However, the package was proposed before the terrorist attacks in the US last week, which have sent the aviation industry worldwide into a tailspin.

Air NZ directors meet at 1 pm and if SIA and BIL refuse to commit to the bailout the airline could risk being put into statutory management.

SIA yesterday dropped its objection to the Government's taking a stake in the national carrier, opening the possibility of the airline ultimately being nationalised if the rescue package falls over.

But Finance Minister Michael Cullen said the Government remained wary of exposing taxpayers to the airline's liabilities.

Air NZ last week announced the biggest loss in New Zealand corporate history - $1.4 billion for the June year - after writing down its investment in its subsidiary Ansett Australia, now in voluntary administration. It has lost more money since.

Commerce Minister Paul Swain, who would be responsible for recommending the appointment of a statutory manager to Air NZ on the advice of the Securities Commission, said the rescue package remained the airline's best hope.

Securities and Stock Exchange regulators have confirmed they are investigating the actions of the airline's directors.

Meanwhile, Ansett's administrator says he has received 200 expressions of interest for the grounded airline.

Some of the planes and their crews will be back in the air today, leased to Qantas.

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