Get Air NZ cash in NZ, Dunne says

By FRAN O'SULLIVAN and CHRIS DANIELS

United Future is flexing its political muscles over the proposed "imminent" sale of an Air New Zealand stake to Qantas.

United Future leader Peter Dunne - who has been confidentially briefed by both Air New Zealand and Finance Minister Michael Cullen - said the Government should not be rushed into a decision that he believes could be only a month away.

The party says Air NZ is a strategic asset and the first option for the Government and Air NZ to explore is a public fundraising.

"We're not convinced there has been enough work done to assess the capability of the local market to front up with the investment capital," said Mr Dunne.

United's chances of stopping the proposal are limited. Its only weapon is the public opposition it can whip up against a deal.

Air NZ chiefs have been waging a behind-the-scenes hearts-and-minds campaign to build confidence in their strategies with pivotal politicians and business people who are opposed to a Qantas sale.

Mr Dunne said his own talks with airline chairman John Palmer were "very proper" but he could "not read" Mr Palmer's personal stance.

"I think it's clear that the Air NZ board has taken a pretty considered attitude," said Mr Dunne.

"But it's equally clear that it sees it as a commercial decision.

"We don't accept the automatic proposition that there is not the investment capital available in New Zealand.

"But we can see the situation developing where it becomes a given that that is the case, and an arrangement with Qantas that might be to Air NZ's long-term detriment."

Managing director and CEO Ralph Norris is understood to have met The Warehouse founder Stephen Tindall privately to try to allay his concerns about the prospective sale of a strategic asset to overseas interests.

Investment banker Rob Cameron - who advises the airline - has also held talks with Act MP Stephen Franks.

United Future finance spokesman Gordon Copeland said the business community had told him "if Air NZ was to go to the market right now looking for equity capital and loan finance they would be successful".

Mr Copeland has strong concerns about the wisdom of allowing Air NZ's main competitor to take an ownership stake.

"It's a bit akin to allowing the Australian Rugby Union to take a 25 per cent interest in the All Blacks and having John O'Neill sitting in on their meetings finding out every single detail about what is going on.

"It will essentially become a subsidiary of Qantas."

Qantas chief executive Geoff Dixon said in a speech in Sydney last week that talks were "continuing in a cordial and constructive manner".

"Obviously, if the boards and senior management of both airlines agree that there is a path for us to go forward, we will, but we are still talking about it.

"[Given] the way the industry is at the moment ... an Australasian airline ... that included ... Qantas and Air New Zealand would be very good for this region."

Air NZ spokesman David Beatson said: "It is still a question of discussion and negotiation at this point, and it hasn't got to the point where either party has a fixed position that would allow a recommendation to be made leading to any decision."

Mr Palmer, speaking in August at the announcement of the airline's $319 million loss for the previous year, said Air NZ recognised that its current form was not a long-term option.

"Under these circumstances the board is compelled to make changes to strengthen the company, and it would be foolhardy if it ignored any potentially valuable option.

"That is why we are seriously discussing the potential for a strategic partnership with, and equity investment by, Qantas."