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By underwriting a capital raise the Government would guarantee the raising of funds by picking up any shortfall of rights that shareholders did not subscribe to, while also taking up the rights of its existing shares, potentially resulting in the Crown holding a greater stake in the airline.
Drawn-out discussions between Air New Zealand and the Government over the company’s future capital structure could be a sign the airline’s majority shareholder is considering taking a bigger stake, or possibly full ownership, of the national carrier, an aviation expert says.
Like the Government, Air New Zealand went hard and early in its response to Covid-19. Just days into New Zealand’s alert level 4 lockdown in March the airline said it would be downsizing to a third of what it was pre-pandemic.
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For the past 18 months Air New Zealand, along with other global airlines, have had to undertake earlier than expected maintenance on Rolls-Royce Trent 1000 engines fitted to Dreamliner aircraft after engine blades showed signs of corroding or cracking prematurely.
“We were hoping for a recovery phase from October onwards and now clearly that is not going to happen, with the reduced schedule with Air New Zealand deciding unilaterally to reduce its schedule with just two flights out of Australia until 27 March.
The Government needs to give Air New Zealand a timely response on its future capital structure so the airline can get on with what it needs to do, including accessing debt or equity from international markets, the National Party says.
Due to the impact of the coronavirus pandemic on air travel Air New Zealand has grounded its Boeing 777 fleet until at least September 2021, and will rely on its Dreamliner aircraft to do all of its long-haul flying in the interim.
Now in the twilight of his career, the thought of retirement did cross his mind once but that was long back when he had set 2019 ODI World Cup as a deadline. But then he thought he still had something left in his tank and hasn’t till date disappointed his fans.