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‘Iconic’ bailouts

Written By: - Date published: 11:34 am, February 26th, 2009 - 9 comments
Categories: humour, john key - Tags:

Bailing out a company like Air New Zealand is one thing. It has a multiplier effect on the local economy in tourism marketing, air freight, and just having a airline that is interested in having routes in and out of NZ. Giving money to your mates because they are your mates… Well this is the style of ad that John Key needs.

This will be discussed in the ‘Jobs Summit’, but framed differently. Probably why NACT prefer to select the participants.

9 comments on “‘Iconic’ bailouts ”

  1. northpaw 1

    Let’s hope that AirNZ meet up with some better futures fuel contract advisors.. yeah, the real story behind (today’s) admissions about fuel costs adding to the company’s earnings decline and reported result..

    Be nice to see any presumed maturity* in the Conference emerge relevant to how mismanagement/misdirection can amount to jobs lost and such potentials for loss.

    * as I understand it, the Labour Party has been excluded from these proceedings for no other declared reason than “they have nothing to give”. Given poll results of recent times it would seem they deciders in this exclusion case have displayed unwarranted immaturity and insecurity.

  2. lprent 2

    Yeah seems kind of weird that the party that has presided over the largest growth in real jobs since the 60’s (or earlier) is deemed to have nothing to add.

    Probably because the Nat’s are far better known for reducing the number of jobs than increasing them. Apart from Muldoon of course

    But of course clueless has all of the answers from his extensive experience of cutting jobs *sigh*. You’d think that those dumb-arse media would look at this circus tomorrow with a degree of skepticism – but I bet they they will just drool at the foot of Key.

  3. vto 3

    I never like the Air New Zealand bailout. Similarly re Bank of New Zealand. Bloody iconic this and that. Businesses should be precluded fom using the word “New Zealand” in their name as it seems to give them a preference in the taxpayer handout stakes.

  4. lprent 4

    Perhaps you should look at the air-freight position in NZ. Last time I looked a few years ago, Air NZ was the only air freight to about half of our major export markets for tech.

  5. vto 5

    That comment directed at me lprent? The thing with that bailout of Air NZ on the basis of what you say (“Air NZ was the only air freight to about half of our major export markets for tech.”) is that while the company may have failed, someone else would have stepped in and taken the outfit over (the planes, the staff, the routes, etc). Why? Because of precisely what you say. This is what happens in business.

    The whole nationalisation carry on. Some say it is the capitalists sticking their hands out, tongue in cheek. It could also be due to over-eager socialists not understanding how capitalists think and operate – the socialists seem to be easily manipulated by these masters of negotiation. As another example consider Toll and rail…

    These ‘captains of industry’ need staring down until past the last minute. After all, a govt holds the purse strings in these situations and hence the power. But I guess all that potential vote catching sets the politicians to drooling (again, see rail for example).

  6. Chrisburger 6

    Air New Zealand was struggling in 2001 but had Singapore Airlines literally waiting in the wings for permission to purchase the carrier (and its Ansett operation) and inject some much needed capital into the combined carrier to get it back on its legs.

    That is until former Minister of Finance, Michael Cullen, blocked the sale to Singapore, forcing the airline to its knees as it could not secure funds to keep the Ansett operation going without the SQ investment. It was nationalisation by stealth and entirely the result of Michael Cullen’s actions. He was the only roadblock to the SQ purchase and forced the airline’s nationalisation.

    It wasn’t so much a “bailout” as an outright government sponsored nationalisation by stealth drive, since followed up by the ridiculous waste of taxpayers’ money (criminal, some would say) in the pruchase of TranzRail. Cullen is solely responsible and should be held accountable.

    • BLiP 6.1

      What about the “captains of industry” that put the company in so parlous a sate? What was the point in setting up Singapore Airlines without the required permissions. Rather than nationalisation by stealth, it was a neatly orchestrated attempt at underminding New Zealand’s sovereignty by business. Happily it was quickly dealt to by a valiant Minister. Those Air New Zealand executives were waiting to collect millions for their efforts in flogging off the company to Singapore. They should have been dragged kicking and screaming from their offices and put up against the wall for economic treason.

      And, while Cullen was the saviour, there were hundreds and thousands of New Zealanders supporting him every inch of the way. Most New Zealanders, economic nous and healthy dose of common sense formed the roadblock, not Cullen alone.

  7. Treasury has all the papers on the Air NZ debacle on its website. The debacle was a result of firstly Australian government restrictions that stopped Air NZ setting up its own airline in Australia (and it exercising management control with its 50% shareholding), Air NZ paid too much for Ansett, but then Cullen refused to let Singapore Airlines effectively recapitalise the airline (doubling its capital) because Qantas got to him first. Qantas’s pure commercial interest was to kneecap Air NZ/Ansett as its biggest competitor, and it did so through Dr Cullen by proposing a deal that couldn’t proceed without shareholder approval or competition authority approval – and it got neither. Air NZ warned Dr Cullen of the consequences of his policy, and it was right.

    Singapore Airlines was and is one of the world’s best run airlines, with an extensive network hub, and a new modern well equipped fleet. Had the deal been approved, as official advice from MoT and Treasury recommended (issues of landing rights were “manageable”, it would have made Air NZ/Ansett group an airline similar in size to Qantas, extending the NZ brand to far more of the world than it can do so as the nationalised little airline it now is.

    You can be a Marxist and cheer on the little airline that has a small long haul network and no domestic presence in its biggest overseas market, or you can try to create a NZ based, NZ branded world class airline. Cullen chose the former, tried to sell out the NZ consumer to Qantas/NZ dominance on domestic, Tasman and routes to the USA, and failed miserably.

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