By DANIEL RIORDAN
Dr C. K. Cheong, Singapore Airlines' representative on the Air New Zealand board, has resigned.
The move, effective February 1, was expected and follows the reduction in SIA's stake from 25 per cent to 4.5 per cent after the Government bailed out Air NZ.
Air NZ chairman John Palmer
said no decision had been made on a replacement for Dr Cheong. His resignation leaves the airline with seven directors, including Bill Wilson, QC, representing 5.5 per cent shareholder BIL International. BIL had 30.3 per cent before the bail-out.
Dr Cheong's resignation means none of the directors have operational airline experience. The search for a new chief executive to replace Gary Toomey is continuing.
Meanwhile, Air NZ's credit rating has improved slightly since confirmation last week of the airline's $885 million recapitalisation by the Government.
Standard & Poor's upgraded its credit watch on the airline's long-term (B-) and short-term (C) ratings to "positive implications" from "developing implications", where they had been placed last September after the writedown of subsidiary Ansett sent the airline into a $1.4 billion loss.
S&P said the recapitalisation, and the Government's commitment to further support - it has promised a further $150 million if needed - had substantially improved Air NZ's financial structure and flexibility.
Its debt to equity ratio, on an operating lease-adjusted basis, had been reduced to 70 per cent from 95 per cent in September.
* Air NZ budget subsidiary Freedom Air is increasing its transtasman fares from next Wednesday. Fares will rise by between $20 and $50 per return flight, depending on routes. Freedom general manager Wayne Dodge said the increases were needed to keep pace with rising costs. Air NZ last November lifted its economy class return transtasman fares by between $20 and $100, citing the same reason as Freedom.
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