John Palmer appointed chairman of Air New Zealand

11.00 am

John Palmer, chairman of Wrightson Ltd and Nelson Fruit Services, has been appointed chairman of Air New Zealand. He takes over from acting chairman Jim Farmer.

Mr Palmer will fill the casual vacancy for a 'B' director, which has existed since the board composition changed on October 4.

The appointment has been approved by the Crown as required by a heads of agreement.

Mr Palmer is a director of AMP Bank and he has been on the advisory board of AMP New Zealand since October 1996.

He is a former chairman of Trustbank Canterbury Limited and played a major part in the public float process for Trust Bank New Zealand Ltd in 1994 and its subsequent sale to Westpac in 1996.

Air New Zealand said a new strategic direction for the kiwifruit industry was introduced under Mr Palmer's chairmanship of the Kiwifruit Marketing Board including the establishment of Zespri International Ltd which he chaired until 1997.

Dr Farmer welcomed his appointment as did Finance Minister Michael Cullen who said he had the right skills for the job.

Dr Cullen thanked Dr Farmer for leading Air New Zealand through an extraordinarily difficult period at substantial personal cost.

"He took on the responsibility knowing what it would involve and is to be respected for that decision."

During that time, Air New Zealand's Australian subsidiary Ansett collapsed, Air New Zealand racked up a $1.4 billion June year loss -- the biggest in New Zealand corporate history -- the Government had to bail the company out to the tune of $885 million and chief executive Gary Toomey quit the company after a stint that lasted less than a year.

One of Mr Palmer's first major tasks will be to steer the Government bail-out, which will give it an 82 per cent holding, through the annual meeting on December 19.

He will have the support of current 30 per cent owner Brierley Investments and 25 per cent owner Singapore Airlines but is likely to face a barrage of criticism from small shareholders who have seen the value of their holding drop drastically. The B shares are trading at 35 cents today versus $1.90 this time a year ago and the As are at 33 cents versus $1.44.

Another pressing task will be to appoint a new chief executive.

A second co-opted board member, Roger France, a consultant and former senior partner with PricewaterhouseCoopers, is acting CEO.

Dr Cullen said Air New Zealand needed the strongest possible leadership at board level.

- NZPA