When the Government confirmed its mixed-ownership model strategy, it was taken for granted that Air New Zealand would be the tail-end Charlie.
Turbulence had become a byword for all things associated with the airline industry. Shares in the power companies Mighty River, Meridian and Genesis seemed far more likely to appeal to investors.
Even Solid Energy, the state-owned coal company, appeared more attractive.
How things have changed, so much so that the Government should be reassessing the future shape of its programme.
Air New Zealand's soaring fortunes were confirmed last week when it flagged that its annual earnings would more than double this year. Normalised pre-tax earnings would be between $235 million and $260 million if current market conditions and the trading environment persisted, it said. Air New Zealand's share price immediately shot up 8c to $1.52, signifying a 10 per cent rise this year.
This was manna for a Government that has seen its strategy stumble from one impediment to another. First, the near collapse of Solid Energy took it off the agenda.
Now, Mighty River Power's part-sale is being severely buffeted by uncertainty over the future of the Tiwai Pt aluminium smelter and the announcement by Labour and the Greens that they would set up a single buyer to purchase all electricity generation at what it deems a fair price. The strong likelihood is that the shares in Mighty River will be sold towards the bottom of the $2.35 to $2.80 range, fetching the Government hundreds of thousands of dollars less than anticipated. The opposition parties' plan and, potentially, Tiwai Pt will also plague the part-sale of the less attractive Genesis and Meridian, with added complications such as Jenny Shipley's chairing of the former.
As it is, Air New Zealand may well hold more appeal, especially for the mum-and-dad investors the Government aims to attract. The airline industry has always had an allure despite the vast sums of money that have been lost in it, and the national flag carrier has a special place in the hearts of New Zealanders.
It has faced a multitude of problems in the past few years, including high fuel prices, landing fee increases, earthquakes in Christchurch and Japan, and discount competition. Yet it has managed to not only survive but to achieve a profitability more commonly associated with budget operators while maintaining a high standard of customer service.
A strong management team, headed by new chief executive Christopher Luxton, provides reason for confidence in the future, including a strong response to the challenge that will arise from the transtasman alliance between Qantas and Emirates, which awaits only the Transport Minister's go-ahead. Jetstar is also talking of expanding its domestic network to regional centres, flying routes that it says are a "big profit play" by Air New Zealand. Balancing these threats to some extent is the benefit that the national carrier will undoubtedly gain from the Government's $158 million boost for promoting tourism.
There are also practical reasons to encourage the Government to promote Air New Zealand. It is already listed on the stock exchange, so a prospectus will not be required. The selldown of the Government's 73.4 per cent stake to 51 per cent will be more straightforward than those of the power companies. There will be no repeat of the late rewriting of Mighty River's documentation.
If ever there is a time to sell shares in Air New Zealand, this appears to be it. Investors wary of the unpredictability of the airline industry may not touch it, but there is considerable appeal for mum-and-dad investors. It could offer succour as the Government licks its wounds.