Mounting difficulties at provincial airline Origin Pacific have forced the company to seek a deal with creditors.
The Business Herald understands that a group of creditors have successfully negotiated an arrangement with Origin Pacific, but agreement has yet to be reached with other, smaller creditors.
Such a dealwould help the airline trade its way out of difficulties.
Headed by Air Nelson founder and well-respected industry leader Robert Inglis, Origin Pacific said this week that it was cutting its staff numbers and operations in a bid to get back on its feet after losing its partnership with Qantas.
Meetings have been held with the company's 450 staff in Nelson, Christchurch, Wellington and Auckland, telling them redundancies were likely.
Inglis said that the viability of the company depended on reducing costs.
A code-sharing deal between Qantas and Origin ended four weeks ago, leading to a 40 per cent cut in Origin's revenue.
Qantas revealed in January that it was pulling out of the deal, although Origin had understood it would receive 12 months' notice of such a withdrawal.
Aggressive tactics from both Qantas and Air New Zealand, which are seeking regulatory permission to join together in an anti-competitive alliance, have often been blamed by Origin for its difficulties.
Origin's former chief executive Tony Marks last year spoke out against the Air New Zealand-Qantas merger at the Commerce Commission hearing into the alliance deal.
The commission rejected the application, though this decision is being appealed.
The Independent Business Weekly reported on Wednesday that a major investor and former director of Origin, Nelson businessman David Lucas, was asking for his $2.8 million investment back.
The report said some conditions attached to Lucas' investment had not been met. Lucas said that when he invested in Origin in November he had not known Qantas would cancel its deal so soon.
He remained supportive of the company but would not have any further investment interest.
