Analysis: What Air NZ deal means for taxpayers and travellers

By 1news.co.nz and is republished with permission.

Air New Zealand announced a $2.2 billion dollar cash injection on Wednesday. Katie Bradford looks into what it means for passengers, shareholders and the taxpayer.

So AIR NZ has admitted it needs more cash so is undertaking a recapatilisation.

The $2.2 billion dollar package is one of the largest capital raises in history – for one of our biggest companies. And it will allow the airline to pay back loans to the government and raise more desperately needed cash.

READ MORE: Air NZ reveals giant $2.2 billion capital raising plan

Shareholders

Let’s take a look at what it means if you hold shares.

You can now get a two for one deal – shares will be available at a 61% discount of 53 cents each. If you don’t want to take up that offer, you can sell the rights to those shares on to someone else who does want to take up the offer.

Taxpayers

But 51% of the company is owned by the government – taxpayers – and that means the government needs to buy more shares to keep that shareholding.

So it’s going to spend another $602 million to keep that level of ownership.

Passengers

And if you love flying – there’s good news. More international routes are opening up and the airline feels confident about its future.

But the past two years have been turbulent and with a war in Ukraine and the pandemic, things are likely to bounce around for some time yet.

So the airline needs more cash to keep the business going and growing over the next few years.

While things are looking up, it admits it’s unlikely to be back making profits until at least 2024.