Friday, February 24, 2006

Sue has no clue on business

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Sue Bradford has shown the Green Party ignorance about business by calling for Air New Zealand to “pull out of its job-shedding tail spin”.
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You see, despite it being your money that rescued the airline after your government refused to allow Singapore Airlines to give it the capital injection it badly needed to survive, the Greens don’t really mind if you don’t get a return on that investment. Earth to Sue, the airline industry is enormously risky and generally a bad investment (largely because many of those in it do it out of love not money), Air NZ is trying to save itself by being more efficient.
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She is concerned there hasn’t been consultation with the unions, which is slightly hilarious because, let’s face it, the unions aren’t going to say “well you’re right, all these departments really don’t do much good, so get rid of them and you can cut 20% of these departments because their practices aren’t up to world best in the airline industry”. Of course, if you read Air NZ's press releases, I doubt if too many of the jobs to be lost in the recent announcements are unionised - you see Sue, some of us don't want to join commie collectives with political agendas to represent our employment. I certainly never did - I had better things to do with my money that help get the Labour Party re-elected.
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However she gets two things wrong in her funniest statement:
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“We bailed out Air New Zealand because of the disastrous decisions of the former owners and management. We did not do this to see Air NZ become a mean, anti-worker company making more bad decisions.”
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Well, no Sue. Air New Zealand was bailed out because for months on end Cabinet refused to agree to the recommendations of the Air NZ board, and officials, that Singapore Airlines be allowed to make a major capital injection into the airline which would have raised its shareholding from 25% to 49%. That would have enabled Air New Zealand to carry out the massive restructuring that Ansett Australia badly needed (which only could be carried out after Air New Zealand acquired 100% of Ansett), largely resisted by the Aussie unions and conditions put on the sale of Ansett (so they lost the lot) and to survive the downturn of post 9/11 aviation. The government stopped the private sector from operating because it sat on its hands, and Qantas and Richard Branson did very well out of that.
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Secondly, besides the silly “mean anti-worker” comment – after all, if the employees didn’t like it, they wouldn’t stay, why is it a bad decision to become more efficient? Especially since whether Air NZ remains taxpayer owned or is privatised at some future date, this will indirectly benefit all taxpayers?

2 comments:

Ruth said...

AIR is a disaster of Biblical proportions. The long-term trendline (down) had run unbroken for well over six years! What a wonderful tool for keeping investors out of this stock while it continues its long slow meltdown!

Any intelligent investors will be long gone - those dumb enough to remain deserve to lose their money.

libertyscott said...

Like the government!

The problem is so many of its competitors run as charities as well - the consumer wins, but airlines are almost always bad investments.