What the Air NZ deal means for taxpayers and travelers

Air New Zealand announced a cash injection of $2.2 billion on Wednesday. Katie Bradford examines what this means for passengers, shareholders and the taxpayer.

AIR NZ has therefore admitted that it needs more cash and is therefore undertaking a recapitalisation.

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

READ MORE: Air NZ unveils giant $2.2 billion fundraising plan

Shareholders

Let’s see what this means if you own stocks.

You can now get a two-for-one deal – shares will be available at a 61% discount of 53 cents each. If you do not wish to accept this offer, you may sell the rights to these shares to someone else who wishes to accept the offer.

Taxpayers

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

It will therefore spend an additional $602 million to maintain this level of ownership.

Passengers

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

But the past two years have been turbulent and with a war in Ukraine and the pandemic, things should still bounce back for a while.

The airline therefore needs more cash to maintain its business and growth over the next few years.

Although things are looking up, he admits he is unlikely to return to making a profit until at least 2024.