Shock as government loans $millions to its own airline

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The Government, a majority shareholder in Air New Zealand, is continuing to support its own airline.

A Crown loan facility made available to Air New Zealand in March 2020 has been extended to a debt facility of up to $1.5 billion (an additional $600 million) available to 27 August 2023 (an extra 16 months). The interest rate will be adjusted to reflect current market conditions.

Air New Zealand will also defer its planned equity capital raise until 30 September 2021. This, says the government, will give it more time to assess market conditions. The Crown wants to remain a majority shareholder or Air NZ and will participate in the raise, subject to Cabinet approval of the terms.

Minister of Finance Grant Robertson says the amendment to the loan facility allows Air New Zealand to benefit from the increased activity as the government opens the country’s borders for travel.

Meanwhile, Air New Zealand has retained $million of dollars of its customers’ airfares while people were unable to travel due to border restrictions and quarantine requirements.

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