The Board and Management of Air New Zealand welcome the conditional decision by the Kiwi Shareholder agreeing to Qantas eventually owning up to 22.5% of Air New Zealand.
This decision is an important first step to ensuring Air New Zealand has a robust future as a New Zealand owned and managed, globally operating airline.
We are encouraged that the Kiwi Shareholder has recognised the importance of ensuring the long-term future of Air New Zealand as a strong international airline with a wide domestic network.
Our focus will now move to that regulatory process. We must demonstrate to the competition regulators that the alliance is the only course which can adequately ensure the future of Air New Zealand as part of a viable and globally competitive airline industry supporting the specific needs of this region.
We have already acknowledged that the alliance will result in reduced competition. We are confident of substantiating that the net public benefits to offset this are conservatively, the $1.4 billion over 5 years as assessed by NECG.
The regulatory process will give the public the opportunity to examine the joint Air New Zealand - Qantas submission in detail, and either support or disagree with the proposal.
The duration of the regulatory process is in the hands of the regulators, but we anticipate that they will make a decision before mid next year. If favourable decisions are received, Air New Zealand will put the transaction to its shareholders for final approval.
By 31 December 2002, Qantas will subscribe for redeemable, convertible notes in Air New Zealand equivalent to 4.99% of Air New Zealand`s shares, at a total value of $98.24 million.
Until the regulatory process is complete it will be a case of business as usual for Air New Zealand.