Coronavirus rescue package: Govt still in talks with Air NZ

Air New Zealand has been hit hard by the coronavirus outbreak. Photo / File

Finance Minister Grant Robertson says he is still in talks with national carrier Air New Zealand, which is excluded from a $600 million package for the aviation sector.

The government outlined an indicative plan – subject to Cabinet approval - in the broader aviation sector to protect supply chains as international travel restrictions put airlines around the world under pressure.

In his speech to Parliament, Robertson said it was essential to keep air routes open to support returning New Zealanders, keep supply chains open, and support essential border services.

That specifically excludes a support package for Air New Zealand, which has said it's looking at slashing its workforce by almost a third, has grounded most of its international fleet, and has wound back domestic flights.

"Air New Zealand is subject to ongoing discussions," said Robertson, who's also the airline's shareholding minister.

Analysts have speculated the government – as a 52 per cent shareholder – will bail out Air New Zealand as it has done in the past, albeit under different circumstances.

Chief executive Greg Foran told staff yesterday that the airline would go through a radical restructure and that it will be a very different organisation in 12 months.

The airline's shares have been in a trading halt this week as the carrier works through the impact of the travel restrictions imposed by the New Zealand government.

Robertson said the government is working through ways to help large and complex businesses that might not benefit from the wage subsidies and tax breaks in the package.

He also reiterated that firms need to talk to their bankers as a first port of call. The Reserve Bank made an unprecedented 75 basis point cut to the official cash rate yesterday, taking it down to 0.25 per cent, and also delayed rules that would have meant lenders had to hold more capital.

- BusinessDesk