November 19, 2013 7:00am by David Farrar

Dann on Air NZ sell down

NZ Herald Business Editor Liam Dann writes:

The sale of the Government’s Air New Zealand shares shouldn’t be lumped in with the political scrap over the sale of state owned enterprises (SOEs) as it has been by opposition parties.

Air New Zealand is already a private company. It is publicly listed which means anyone can buy shares and the company must abide by NZX market regulations around disclosure.

Air New Zealand, in its current form, was never a state owned enterprise. The Government investment was a bailout which came about of necessity when the company went to the brink of collapse in 2001.

However much you feel the blame for that failure can be attributed to its private ownership structure at the time, that structure is not being copied here.

This is not, as the opposition says, history repeating.

Today we own a 73 per cent stake by the end of tomorrow we’ll own 53 per cent. So what? The numerical change doesn’t alter the control that Government has as majority shareholder.

Why is 73% the magically correct number? If Labour is against selling down to 51% then why don’t they announce a policy to buy 100% of Air NZ?

The taxpayer has done well from the investment – but when you look around the world at the performance of airlines you’d have to say this is a rare bonus.

Airlines are highly competitive risky businesses. There is no compelling reason for that risk to be all or mainly state owned.