Sale to Qantas off, says National

Press, 12 October 1988, Page 1

Sale to Qantas off, says National

By

GLEN PERKINSON and LES BLOXHAM

The Government was about to repudiate its deal with Qantas over the sale of 25 per cent of Air New Zealand, the Opposition claimed yesterday.

The Opposition spokesman on State-owned enterprises, Mr lan McLean, said it had become clear the Government was bowing to pressure from the British to reconsider the British Airways bid. Mr McLean believed a telling factor in the breakdown of the Qantas deal was its demand for as much as 35 per cent of New Zealand’s national carrier. He said Qantas obviously wanted control of Air New Zealand and the demand for more shares was the first in a series of bids for a larger stake. Mr McLean’s claim was backed up yesterday by the general manager of Ansett Airlines, Australia, Mr Graham McMahon. He told travel and transport journalists at a seminar at Coffs Harbour that information had been passed to him that Qantas had varied the conditions of its bid and now wanted 35 per cent of Air New Zealand instead of the Government’s offer of 25 per cent. Qantas’s public relations manager in Sydney, Mr Ken Boys, would neither confirm nor deny that his airline had demanded a bigger slice of Air New Zealand. Neither the Minister of Transport, Mr Jeffries, nor the Minister for State-owned Enterprises, Mr Prebble, was available for comment last evening. However, in Parliament yesterday, Mr Jeffries repeatedly refused to answer Opposition questions about the state of play over the share sale. Mr McLean said it appeared that the Government had bowed to pressure from Britain after the British lobbied the Minister of External Relations and Trade, Mr Moore.

He said the Government would welsh on the deal with Qantas after being placed in a tight situation over “guns or butter.” “The British have put pressure on Mr Moore over the rejection of the British Airways bid — especially when British Airways makes much better strategic and commercial sense for New Zealand and its tourist industry.”

The pressure would have come in the form of British threats to discontinue support for New Zealand butter access to Europe. “Now the Government is going to welsh on its deal with Australia just as it did over the Petrocorp-British Gas deal,” Mr McLean said.

He said alarm bells had rung for him when there was no decision on the share sale after Monday’s Cabinet meeting. A decision had been expected. Mr McLean said that the Opposition’s promise to demand foreign investors divest shares where a holding was more than 24.9 per cent might have affected the deal. He believed this would not affect the British Airways bid because it found a liaison with New Zealand “mutually advantageous — British Airways will accept 24.9 per cent.” Mr Boys was, however, adamant that Qantas was still the preferred bidder for Air New Zealand.

The duty press officer for British Airways in London, Mr Bill Burchell, said last evening that the company would not comment on “acquisitions and mergers.”