Deputy Prime Minister Winston Peters has hinted that the taxpayer may take a greater stake in Air New Zealand and radically shake up the way the company is run.
The company has ping-ponged between privatisation and some level of nationalisation since 1989. The majority of shares are still owned by the Government, which last month offered the airline loan facilities worth up to $900 million to help it weather the impact of Covid-19.
Peters thinks that a return to further private ownership is off the cards.
“Every time it went belly up it went back to the taxpayer. This time it’s staying with the taxpayer,” Peters said.
The loan to Air New Zealand carried an equity provision, which the Government could trigger if it wished. This would mean the Government would increase its shareholding in the company from the roughly 52 per cent it currently owns.
Peters wouldn’t be drawn on whether or not he would like to take a larger stake in the company.
“It wouldn’t be too difficult for someone like you to make a wild smart guess,” Peters told media.
Peters and his party, NZ First, have been critical of the airline in the past. They’ve been particularly critical of the way it has failed to serve regional airports.
Despite being majority Government owned, Air New Zealand is run commercially and has returned handsome dividends to the Crown in the past. But this has also caused it to run into criticism that it neglects its role as a transport utility, linking regional communities with the rest of the country.
It has struggled, like many airlines, to make some regional routes profitable. In 2018, the company endured a dust-up with NZ First MP Shane Jones after it stopped servicing Paraparaumu airport.
Peters said the Government would be pumping money into the airline — as it had done with the loan, to keep it serving the country.
“We want to see the regions come alive again, and it may cost money to do that for a little while and the sooner we can do that the better,” he said.
Peters said he still wanted to run Air New Zealand along “business lines,” but not as it is traditionally understood.
Instead of the company providing value to its shareholders and itself, Peters wanted it to be looked at in terms of the value it added to the wider regional economy.
We’ve got to run it along business lines,” Peters said.
“But business lines also has this aspect: if it is flying to bring business to the provinces and to the regions than that value to the regions has got to be added to their profit margin as well”.
“So it won’t have a bottom line profit margin, but it will have contingencies which will show its value to the national economy,” he said.
Jones has said he would like to speak more about Air New Zealand in the future, although in his capacity as NZ First MP, rather than Cabinet minister.
Neither Peters nor Jones is officially responsible for Air New Zealand, which falls to Finance Minister Grant Robertson who is the shareholding Minister.