SInGAPORE_AIR
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ANZ: A Conflict Of Interest?

Thu Sep 27, 2001 2:07 am

I would like to hear your comments on this. It should be interesting (but let's be polite to eachother).

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Dialogue: Singapore Airlines' conflict of interest cries out for investigation now
New Zealand Herald; Sep 26, 2001
BY STEPHEN FRANKS*



I am aghast at the ineptitude displayed in so many quarters in the Air NZ saga.

I cannot believe that the warning by Air NZ's acting chairman, Dr Jim Farmer, of a conflict of interest in Singapore Airlines' behaviour has attracted so little attention.

I have asked the market surveillance panel to investigate this extraordinary revelation and I hope the response will be forthright.

Its performance up to now seems to have been tardy. To be investigating now - apparently only after pressure from the New Zealand Securities Commission under pressure from the Australian Securities Commission - is a disgrace.

The panel is apparently looking only at the past. Vital current issues have gone uninvestigated.

In particular, the market, the Government and taxpayers should know immediately whether Air NZ can be held legally liable for debts of its abandoned Australian subsidiary.

If that is a muddy legal question, with the answer unlikely for months, then statutory management will become inevitable, and it should be prompt.

Any real risk that fresh capital, or even positive cash flow from efficient New Zealand operations, will simply be siphoned away to Australia, will mean that no one will want more exposure to the company. That will hit bookings and ticket sales.

Uncertainty fostered by the Australian Government and Qantas will kill Air NZ, even if we find in six months that Australian belligerence was unjustified.

I have long suspected SIA of having, at the very least, a bob each way. I am sure it did not expect any destabilisation to be so dire as to culminate in the loss of its Air NZ investment, but for SIA there has always been a silver lining if things went too far.

It gets the removal of Air NZ, a better international competitor than Qantas in operating costs, service quality and engineering reputation. Plus a chance to get an Australian domestic airline, where it was heading when Brierley Investments snookered it into investing in Ansett through Air NZ.

SIA can now help Virgin pick up Ansett jetsam for next to nothing.

BIL has seen a clever stunt go wrong, without an upside. I suspect that BIL, perhaps with the knowledge at least of SIA, pushed the Air NZ board into buying the second half of Ansett knowing both companies were undercapitalised, to create an "undercapitalisation" crisis that they expected would force the Government into lifting the ownership cap.

The cap had to go to allow SIA as the only natural buyer, to take BIL's shares at a premium.

With the links between the owners of BIL and of SIA, it is possible that part of the premium might not have been tangible, or might never have appeared in BIL's books under our new takeover law, and the covert stratagems it rewards.

BIL did not count on two things - cash flows from Ansett going negative as it went septic, and the Government's dithering over raising the cap. I am sure BIL, too, did not know how fragile Ansett was.

What should happen now? When the Government failed to tell Qantas, SIA and BIL months ago that the cap would not be raised and that there was no question of putting in Government money, ministers were hooked.

From then on, the company, its major shareholders and, more importantly to the Government, New Zealand voters, saw the Government as essential to the solution. Labour became politically liable for any unpalatable outcome.

The airline will now dive as forward bookings plummet. But the Government cannot allow the planes to be grounded in New Zealand.

Instead of fiddling around with more alleged "due diligence", Finance Minister Michael Cullen should: * Announce as soon as possible that the Government will ensure that Air NZ tickets are honoured. The guarantee will not exceed any exposure the Government would face in any event, to keep services going in New Zealand and a continuing flow of bookings will reduce the exposure, not increase it. To the extent it is a credit guarantee, any liability can be deducted from the $550 million already promised.

* Advise that if alleged liability to Australia is unfair, or legally improper, or unlikely to be determinable promptly, Air NZ will be put into statutory management.

* Tell SIA and BIL and Qantas that raising ownership caps is now off the table, so that if part of their strategy includes an expectation of picking up the airline for nothing from the statutory manager, they have miscalculated.

* Convene an urgent investigation into the role of Qantas, SIA and BIL as partners, shareholders and appointers of directors, before proceeding further with a rescue package that could leave any of them with the pickings from the wreckage.

The warnings that they may have been using their share holdings for strategic purposes inimical to the interests of Air NZ have been there for months.

* Stephen Franks is an Act MP, a former leading commercial lawyer and a former member of the Stock Exchange market surveillance panel.


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RE: ANZ: A Conflict Of Interest?

Thu Sep 27, 2001 4:45 am

Singapore airlines could do with a investigation.
It is amazing what can be accomplised when nobody takes the credit
 
SInGAPORE_AIR
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RE: ANZ: A Conflict Of Interest?

Thu Sep 27, 2001 5:48 am

Oh Go Canada! Lighten up please!
Anyone can fly, only the best Soar.
 
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RE: ANZ: A Conflict Of Interest?

Thu Sep 27, 2001 5:58 am

well it could do, horrid company, nothing personal
It is amazing what can be accomplised when nobody takes the credit
 
SInGAPORE_AIR
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RE: ANZ: A Conflict Of Interest?

Thu Sep 27, 2001 6:30 am

oh well, I respect your decision.

It is getting cold isn't it! Stupid weather.
Anyone can fly, only the best Soar.
 
tullamarine
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RE: ANZ: A Conflict Of Interest?

Thu Sep 27, 2001 7:44 am

Let me get this straight this guy reckons SQ wanted to white ant NZ because it was a more formidable international competitor than QF. A bizarre conspiracy theory to say the least.

I was always taught, if you have to choose between an event was caused by a conspiracy or a stuff-up take the stuff-up everytime!
717,721/2,732/3/4/5/7/8/9,742/3/4,752/3,762/3,772,W,310,320/1,332/3,388,DC9,DC10,F28,F100,142,143,E90,CR2,D82/3/4,SF3,AT
 
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VirginFlyer
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RE: ANZ: A Conflict Of Interest?

Thu Sep 27, 2001 9:17 am

The New Zealand Herald isn't known for having the best journalists. Lets face it, Auckland's Newspaper is pretty much a glorified rag...
"So powerful is the light of unity that it can illuminate the whole earth." - Bahá'u'lláh
 
jetkid
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RE: ANZ: A Conflict Of Interest?

Thu Sep 27, 2001 11:06 am

It was written by an ACT MP, (Right wing) I'm suprised they printed it, he raves on a bit.
Jetkid

 
aviasian
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RE: ANZ: A Conflict Of Interest?

Thu Sep 27, 2001 11:48 am

ANZ a more formidable competitor than Qantas? What a joke! I am more apt to believe that the New Zealanders reading this article have more intelligence than the publisher of this publication would like to believe.

Qantas, and her many fans on this forum (including me of course) should feel insulted.

There have been many experts who have shared their views on this forum, there have been even more self-declared experts of dubious backgrounds but huge titles . . . I suggest we let the whole saga play itself out. I say keep your eyes on Air NZ . . . I hope the moms and dads investors in NZ are not going to face the same fate as Ansett.

 
docpepz
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RE: ANZ: A Conflict Of Interest?

Thu Sep 27, 2001 12:19 pm

SIA and Air NZ are hardly competitors. They only used to compete on SIN-AKL and SIN-CHC routes, which are not high-yielding First and J Class routes. ANd anyway, Air NZ only flies to one European destination and one American destination and a handful of Asian destinations.

And yes, QF's service may not be the best, but they fly to far more international destinations than Air NZ. And that's what really counts after all.
 
TG992
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RE: ANZ: A Conflict Of Interest?

Thu Sep 27, 2001 12:19 pm

With all respect, Aviasian, I think you misinterpreted what he was saying a bit.

Quote was "It gets the removal of Air NZ, a better international competitor than Qantas in operating costs, service quality and engineering reputation.

He didn't say NZ was a more formidable competitor than QF - that would be laughable as QF are obviously a far huger and globally significant airline than NZ. But I think a majority of people realise that NZ's smaller size enable them to offer a better service in terms of in-flight service etc than QF, a fact which is recognised by numerous awards, the most recent of which was bestowed about 4 days ago.
Of course, this is now under threat because of QF's PTV programme, which I doubt NZ can afford to continue with.

As for engineering reputation, NZ does a lot of contract work for other airlines (ie Virgin Atlantic) and General Electric as well - I don't think QF has such extensive contract work, although to be honest I don't know for sure.

Operating costs are another unknown for me - but one would assume they would be lower than QF's as QF has a large number of unprofitable routes they're obligated to fly, whereas NZ doesn't have as many, and they also have a weaker union presence than QF.

So, IMHO, I don't think he's trying to suggest NZ has more muscle than QF (Feel free to produce facts to prove me wrong)  Smile
- but I definitely don't agree with him that SQ deliberately ran AN and NZ into the ground.
-
 
SInGAPORE_AIR
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RE: ANZ: A Conflict Of Interest?

Thu Sep 27, 2001 3:49 pm

Nice, now what does THIS mean!

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Six degrees separate bin Laden and Ansett
The Age - ABIX - Australasia; Sep 27, 2001
BY MICHAEL BACKMAN



The collapse of the Australian airline, Ansett, and the United States terrorist attacks are linked by more than timing. The ultimate owner of Ansett is a billionaire Malaysian businessman, Quek Leng Chan. He controls the Hong Leong Group, the main shareholder in Camerlin Group, which has a major stake in Brierley Investments. Brierley, along with Singapore Airlines, is a major shareholder in Ansett's parent, Air New Zealand. As well as Asia, Quek has significant interests in Britain, including exclusive commercial and residential properties. One of the tenants is the Binladen Group International, the conglomerate owned by the family of terrorist leader, Osama bin Laden. Bin Laden is believed to have masterminded the hijack attacks on the World Trade Center and the Pentagon in the US on 11 September.


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RE: ANZ: A Conflict Of Interest?

Thu Sep 27, 2001 11:32 pm

oh nasty birley, another take of world dominance, blame it all on helen clarke.

an yes it is getting a bit cold, i want it to snow, that way the planes are grounded and i can goto my nearest airport and laugh at the pikey ones.
It is amazing what can be accomplised when nobody takes the credit
 
SInGAPORE_AIR
Posts: 11619
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RE: ANZ: A Conflict Of Interest?

Fri Sep 28, 2001 2:39 am

It is bloody cold. I wish it would f off.

Again, Heleny is mentioned. Maybe we should have a world-side petition for her to sling her political hook.
Anyone can fly, only the best Soar.

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