And from the Sydney Morning Herald today

Singapore makes bold play for Anzac aviation

By Mark Todd

Singapore Airlines last night struck a bold deal to take a "significantly" higher stake in Air New Zealand but Qantas was far from willing to concede defeat in the battle for the Kiwi carrier.

Singapore Air announced late last night it would take a placement of Air NZ shares at $NZ1.31 each and would support a subsequent capital raising by the company to help fund the first stage of a desperately needed $4 billion fleet upgrade.

No more details were available, but it is thought Singapore Air will raise its stake in Air NZ from 25 per cent to between 35 per cent and 49 per cent.

The acting chairman of Air NZ, Dr Jim Farmer, said directors emerged from a two-day meeting united in the view that Singapore Air should buy more of the company, and Air NZ should keep full ownership of Ansett.

"The advantages Air NZ will derive from continuing ownership of Ansett Australia, and the operation and development of an integrated Australasian network, are significantly more valuable than any other option available to our company," Dr Farmer said.

However, the deal needs the NZ Government's approval.

Prime Minister Ms Helen Clark yesterday reiterated she saw no need for the Government to change the foreign ownership rules which restrict Singapore Air from owning more than 25 per cent of Air NZ.

Singapore Air chief executive Mr Cheong Choong Kong is scheduled to meet the Australian Prime Minister, Mr Howard, to discuss the plan, which could give the airline control over four of the five major carriers in the immediate region.

It is understood Qantas chief executive Mr Geoff Dixon last night voiced his concerns about the deal to Mr Howard at a Qantas function in Canberra.

Qantas, which had presented a deal to buy up to 55 per cent of Air NZ for $800 million, said Singapore Air would gain an "unprecedented" degree of influence over the aviation industry on both sides of the Tasman if the deal were permitted.

"This is a move to control the Ansett group by the back door, which would not have been the intention of the Australian authorities when they allowed the sale of Ansett to Air NZ," Mr Dixon said.

"People should realise this will give Singapore Airlines major influence over the future of Air NZ, Ansett and Ansett International in addition to their 49 per cent stake in Virgin Atlantic."

Qantas shares closed 11c up at $3.41. Locally listed Air NZ shares were 5c stronger at $1.28.

ENDS