AIR - Air NZ.

[Subway]

I just awoke from this terrible nightmare that Air had been sold and Jetstar had taken over our domstic network in conjunction with Malaysia airlines.

Haha Malaysia Airlines really aren't that bad!

Marilyn Munroe: I think having a national airline is a priority for any government, you might disagree with that, but its not a great look for a country if their main airline fails

[dobby41]

Marilyn Munroe: I think having a national airline is a priority for any government, you might disagree with that, but its not a great look for a country if their main airline fails

Some time back the airline was wholly privately owned - no govt money.
Then they hit bad air and nearly failed - so the govt bailed them out.
Now that they are back flying high why does the govt still need to be in there? Their job is done - sell and move on.

[777]

Some time back the airline was wholly privately owned - no govt money.
Then they hit bad air and nearly failed - so the govt bailed them out.
Now that they are back flying high why does the govt still need to be in there? Their job is done - sell and move on.

Replace "bailed them out" with" took a large stake" in an airline that financially strapped due to a bad investment (Ansett) but was operationally very sound. History has proved it was a great investment.

[Baa_Baa]

Replace "bailed them out" with" took a large stake" in an airline that financially strapped due to a bad investment (Ansett) but was operationally very sound. History has proved it was a great investment.

Air would have failed without the government investment, that's a bailout in any language. I'm with the sellers, just don't think it's the best use of taxpayer capital anymore, turned into a cynical money spinner.

[Marilyn Munroe]

Replace "bailed them out" with" took a large stake" in an airline that financially strapped due to a bad investment (Ansett) but was operationally very sound. History has proved it was a great investment.

Yes it has turned into a good investment for the government and yes current management is top-notch.

But the government is still exposed to risk in an industry which has a mixed record financially.

If Ansett MK II happened how would you justify the cost to someone who needs a hip replacement because of pain but can't get one because the governments cash has been diverted into keeping the airline flying?

Boop boop de do
Marilyn

[skid]

Haha Malaysia Airlines really aren't that bad!

Marilyn Munroe: I think having a national airline is a priority for any government, you might disagree with that, but its not a great look for a country if their main airline fails

Malaysia Air to Malaysia was actually a better fight than AIR to Viet Nam,,(for me at least) cheaper too

[dobby41]

Yes it has turned into a good investment for the government and yes current management is top-notch.

But the government is still exposed to risk in an industry which has a mixed record financially.

If Ansett MK II happened how would you justify the cost to someone who needs a hip replacement because of pain but can't get one because the governments cash has been diverted into keeping the airline flying?

Boop boop de do
Marilyn

I agree - as I said, they have done the job they came to do (get the airline running again), time to move on.

[mondograss]

It's not as simple a trade-off. At the time of the bail out, the govt concerned was running surpluses and continued to do so for many years, while at the same time spending substantial amounts on things like hip operations, debt reduction etc. Now if the same situation occurred today, you could argue there would be a trade-off, but you'd have to question whether the current govt would actually spend the money it might invest in bailing out Air NZ on the health sector or any other part of the public service that's currently struggling. They can make the decision to spend that money on public services now, but they haven't so why equate the two?

As for whether it was a good investment or not, the following might be interesting to some:
http://www.treasury.govt.nz/publicat...stment-anz-pt1
http://www.treasury.govt.nz/publicat...stment-anz-pt2
http://www.treasury.govt.nz/publicat...stment-anz-pt3

[mondograss]

I agree - as I said, they have done the job they came to do (get the airline running again), time to move on.

Maybe, but since they've already effectively recovered their initial investment, they're basically being free carried from here on in. Why shouldn't the govt earn dividends from investments if those investments prove sound (and they can back them up with govt policy to enhance them i.e. tourism programs).

[couta1]

Maybe, but since they've already effectively recovered their initial investment, they're basically being free carried from here on in. Why shouldn't the govt earn dividends from investments if those investments prove sound (and they can back them up with govt policy to enhance them i.e. tourism programs).

Well said, and the Govt have made over 3 times what they put in bail Air out, this company is now a cash cow for them and provides valuable money for the benefit of all taxpayers.