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Shane Jones accuses Air New Zealand board of delaying raising funds

New Zealand First MP Shane Jones is accusing Air New Zealand’s board of delaying the airline from raising money, and wonders whether it’s because they want to see who is in government next.

Air New Zealand is in need of a capital injection, with cash reserves falling to around $200 million and future monthly cash burn expected to be $65m to $85m.

The Crown owns 52 per cent of Air New Zealand, but it’s run as a private company and is listed on the New Zealand stock exchange.

One way Air New Zealand could raise money could be to undertake a capital raising, underwritten by the Government.

Mr Jones said he believed the board, which has in the past fiercely defended its independence from the Crown, was holding up a decision to go to market.

“Air New Zealand has shrunk services, expanded prices, refused to go to the market, they've drawn down their cash: That's made me very cynical about the agenda of the board.”

If the board decided to go to the market for a capital raising then the true value of Air New Zealand would become clear, he said.

“Perhaps they're waiting till after the election, so they can see the political colour of the Government’s eyes.”

Any additional taxpayer money going towards Air New Zealand must be done on the proviso that the airline offered a better service and connectivity for New Zealand, especially in the regions, Mr Jones said.

“Create a model that is more akin to the ambition of the taxpayers and living without frills and without all the corporate accoutrements.”

Those frills and corporate accoutrements, the Minister said, had blinded corporate decision-making at Air New Zealand.

He accused the board of demonstrating “deprecatory behaviour” towards provincial New Zealand.

This is not the first time Mr Jones has taken aim at the national carrier’s board.

In 2018 he had a very public spat with former chief executive Christopher Luxon and former chairman Tony Carter after Air New Zealand axed services from Kāpiti Coast Airport. In 2015, it also stopped flying to Kaitaia, Whakatane and Westport and scrapped routes to other regions.

Air New Zealand’s "old regime" downplayed the significance of regional routes that were axed, Mr Jones said.

“Everything Air New Zealand executives do, they do with the blessings of the board.”

Mr Jones, who was making his comments as a NZ First MP and not in his capacity as Minister of Regional Economic Development, said he wanted to see Air New Zealand recapitalised but did not want the Crown’s shareholding diluted.

If it required the Crown to underwrite a capital raise and therefore take a larger stake in the airline then NZ First would support that, he said.

“If the board does proceed with a capital raising NZ First will be absolutely focused on what does the taxpayer get in return.”

Mr Jones said he was not privy to details of discussions between the airline and the Government.

His leader Winston Peters has said this week the Government should take full ownership of Air New Zealand.

 

https://www.stuff.co.nz/business/industries/122729392/air-nzs-cash-crunch-shane-jones-accuses-airline-board-of-delaying-raising-funds 

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