Air NZ debate exposes coalition split as fuel volatility hits airline outlook

Summarised by Centrist

The future ownership of Air New Zealand has come under renewed political scrutiny after the airline warned that the war in Iran and volatile jet fuel prices could force fare increases and network changes.

The airline recently reported a $40 million loss for the six months to December, adding to pressure on the Government’s 51 per cent shareholding and prompting debate within the coalition about whether the stake should eventually be sold.

Winston Peters strongly rejected any suggestion of selling the government’s holding, arguing the airline is too strategically important.

“It’s a critical utility for a country called New Zealand. It’s our face abroad,” Peters said. He went further, attacking the idea of privatisation as an outdated economic ideology. “We’re going to get rid of this neoliberal stupidity,” he said.

State Owned Enterprises Minister Simeon Brown also ruled out immediate asset sales. “We’re not in the business of selling assets the government owns. What we are focused on is making sure they perform,” Brown said.

ACT leader David Seymour, who has previously supported selling the government stake, said the issue was not a bottom line for him but criticised the airline for pursuing “quasi-political causes” instead of focusing on its core business.

Industry leaders say rising costs are a major driver of pressure on the airline. 

Aviation Industry Association chief executive Simon Wallace noted that on a $200 Wellington to Auckland fare, Wallace said around $15 goes to Civil Aviation Authority levies and about $40 to airport charges. Air New Zealand has since confirmed it will cancel about 1,100 flights through early May, affecting roughly 44,000 passengers, as rising jet fuel costs force the airline to trim services.

Read more over at The NZ Herald

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