Singapore bidding for Air NZ stake

Air New Zealand subsidiary Ansett is Australia's No. 2 airline behind Qantas

By CNN's Grant Holloway

SYDNEY, Australia (CNN) -- The increasingly complex Asia Pacific airline ownership web spun another thread Friday, with Singapore Airlines indicating it was a player for a controlling stake in the embattled Air New Zealand.

This puts Singapore in a head-to-head tussle with Australia's biggest airline Qantas Airways.

On Friday Qantas outlined a proposal to Air New Zealand whereby it took a major slice of the Kiwi operator and the Air NZ subsidiary Ansett is sold to Singapore.

Singapore Airlines owns 25 percent of Air NZ's shares and investment company Brierley Investments holds 30 percent.

Brierley however is keen to exit the stake, while Singapore has previously expressed an interest in controlling Ansett, Australia's number two airline after Qantas.

Focus on partnership

Qantas chief executive Geoff Dixon said Thursday the airline was "particularly focused on the opportunity to establish a partnership with Air New Zealand which would strengthen the international competitiveness of both airlines."

"We are aggressively pursuing wide-ranging bilateral and global alliance arrangements with our cornerstone investor, British Airways, and other oneworld partners," Dixon said.

But statements by Singapore Airlines chief Cheong Choong Koong have muddied the picture.

Cheong told The Australian newspaper Singapore was prepared to take an increased stake in Air New Zealand and inject the necessary capital to repair the airline's balance sheet.

Air New Zealand is under considerable market pressure, with a full year loss of as much as $200 million looming -- Ansett is losing up to $2.5 million a week -- and fleet upgrade costs of around $1 billion overhanging the books.

Seeking approval to lift stake

Singapore Airlines is now seeking New Zealand Government approval to lift its Air New Zealand stake above the 25 per cent limit imposed on all non-New Zealand investors in the company.

The move, if approved, would make it much harder for Qantas to buy a controlling stake in Air New Zealand.

Singapore Airlines executives are to meet New Zealand's Prime Minister Helen Clark next week to lobby for the lifting of the ownership limit.