Reorganisation Of Bay Of Plenty Airways

Press, Volume C, Issue 29626, 23 September 1961, Page 13

Reorganisation Of Bay Of Plenty Airways

"The Bay of Plenty Airways company approached the National Airways Corporation a year ago seeking assistance, and some months ago N.A.C. had worked out a plan whereby the corporation would buy £14,000 shares in the company and play a minority part in its direction, thus making possible a reorganisation of the company on a more efficient basis,” says a letter from the Minister in charge of Civil Aviation (Mr McAlpine), in reply to a ’ correspondent. “Sick • Industry." The correspondent says: “Bay of Plenty Airways has been in receivership since last April Take-over offers have been made by another private airline, presumably based on the market value of the undertaking. It appears that the offer was not high enough to protect the investments <sf shareholders in Bay of Plenty Airways, who have now persuaded the Government to do more than a private competitor—and this at a time when the Government » hinting at drastic economies. Why should public money be used to protect certain investors from a bad risk? What has toe Minister of Civil Avtotton to aay about this when he won’t sanction toe expenditure of

to extend Harewood runways to jet standards?”

“Your correspondent has apparently misunderstood both the sequence and the nature of toe events affecting Bay of Plenty Airways,’’ the Minister says. “The National Airways Corporation has—and must have—a good deal of independence in running its own business, but in this particular matter it . was required to obtain Government approval. Although toe corporation was satisfied that, with reorganisation, its investment would be sound, the Government nevertheless refused to agree to N.A.C. s participtaion until it was satisfied that toe necessary assistance was not forthcoming from private enterprise. “When it was clear that such assistance was not forthcoming on terms acceptable to the shareholders the Government agreed that N.A.C. ehould go forward with its proposals. The money will be found from the funds of the corporation which is a profit-making concern, and air services of great value to the area will be preserved. “There is, of course, not the slightest possible connexion between this matter and jet facilities at Harewood.” the Minister says.