The Press WEDNESDAY, DECEMBER 28, 1960. Ownership Of T.E.A.L.

Press, Volume XCIX, Issue 29398, 28 December 1960, Page 8

The Press WEDNESDAY, DECEMBER 28, 1960. Ownership Of T.E.A.L.

The right time for New Zealand to have bought out the Australian interest in Tasman Empire Airways was before Qantas pressure led to the purchase of Electras when the company management wanted pure jet aircraft. That decision having been accepted, there is no pressing reason now why New Zealand should break up the partnership, although in the long run, when New Zealand has jet airfields, the interests of the two Dominions may conflict again. Before that happens it would be as well for T.E.A.L. to learn to stand on its own. In the meantime acquisition of the Australian shares would permit New Zealand to co-ordinate its three air transport organisations— T.E.A.L., the National Airways Corporation, and the transport units of the Air Force. They already work together in some respects. N.A.C., for instance, has used some of the surplus Electra capacity that Qantas was supposed to charter; and Air Force engineering work is done in T.E.A.L. workshops. Much closer co-operation is desirable, particularly in the purchase and use of aircraft, where overlapping could be avoided. Sole New Zealand ownership would also give T.E.A.L. greater freedom in the current negotiations for service rights in the Pacific area. The Australian Government

is apparently prepared to dispose of its half-interest, possibly in the belief that T.E.A.L. has already served its purpose in the development of Qantas. The principal argument may come over price, since the Australian Government is reported by the “ Sun News-Pictorial ” to expect a take-over bid of more than £1,000,000. The face value of the Australian shares is just over £800,000; and half the balance-sheet figure for shareholders’ funds is just over £900,000. Because of the £3 million liability to the Morgan Guaranty Trust of New York on the Electra deal, and the probability of a relatively early replacement of these aircraft, the New Zealand Government has some ground for arguing that the Australian shares should be taken, at no more than their face value. T.E.A.L. would be in a much stronger position to meet competition if it had not had to bow to Australian pressure two years ago. However, equity may weigh less with Senator Paltridge when he discusses terms with the New Zealand Minister (Mr McAlpine) than the desirability of T.E.A.L. support in the planning of co-ordinated Commonwealth services. New Zealand taxpayers will expect Mr McAlpine to make the best bargain he can, a better one than Mr Mathison made on behalf of the previous Government.