Crafty players at the crossroads

By FRAN O'SULLIVAN

If Singapore Airlines chief executive "CK" Cheong is not using every opportunity to dump the share price and screw a better deal for SIA to bail out Air New Zealand, he has lost his touch as a master strategist.

"CK", as Dr Cheong is known in boardrooms throughout Singapore and Australasia, has played a masterly game since Air New Zealand's financial situation worsened.

The bad news is pouring out by the bucket load as aviation analysts question the survival of Ansett Australia, Air New Zealand's loss-making Australian subsidiary.

Air New Zealand has tried to keep a lid on Ansett's problems.

But with the national flag carrier "in play", plenty of players have an interest in seeing Air New Zealand's share price fall through the floor - particularly if they can wrest control of the airline at a cheap price, or put the financial skids under a competitor.

Sir Richard Branson's opportunistic and very public spurning of an Air New Zealand offer to acquire Virgin Blue (Australia) was classically timed.

So, too, were the subsequent leaks revealing that Ansett was losing $A1 million a day.

Sir Richard must be laughing as Governments on both sides of the Tasman scurry about trying to avert the failure of Australia's second-largest airline.

If Ansett falls over, Virgin Blue will reach a fast maturity.

Today, Air New Zealand's board will once again try to stabilise the situation with yet another public statement.

But shareholders will not be convinced until the airline's major shareholders, Singapore Airlines and Brierley Investments, announce they will commit to the financial recapitalisation.

With Air New Zealand's share price tumbling well below the $1 mark, there is no way Dr Cheong's board will want to approve a planned bailout at $1.31 a share.

Even a powerful chief executive must answer to a board of directors.

In the case of Dr Cheong, his board is dominated by representatives from the Singapore Government.

Players closely aligned to the Singaporean Government interests also dominate Brierley Investments, whose board met in Singapore on Monday to work up its game plan.

If Singapore Airlines finds dealing with the New Zealand Government too onerous, then Qantas is still waiting in the wings with its own offer for Air New Zealand.

Either way, Singapore Inc - the ruling club that controls both of Air New Zealand's major shareholders - is now poised to control the Australasian aviation market.

But now the price will be much cheaper than it was at this time last week. "CK" will have done his work.

Southern Skies Properties Limited

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