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THE New Zealand Government has taken a controlling interest in Air New Zealand, injecting up to $NZ1 billion into the cash-strapped airline.
The Government has taken a stake of about 83 per cent though the issue of new shares or notes. The airline was originally state-owned but was sold by the previous Labour government in 1989.
Finance Minister Michael Cullen said the shareholding would be short-term while the airline - reeling after the collapse of its subsidiary, Ansett - overcame its financial woes.
"Any investment by the New Zealand Government in Air New Zealand will ensure that there is effective control for a period in time, but it will be subject to a clear message that the Government does not see itself the long-term shareholder in the company," he told parliament.
A source said by "effective control", Dr Cullen meant majority ownership.
In an attempt to save Air New Zealand it's directors put the 100 per cent Ansett Australia into administration, causing chaos in the Australian travel industry.
But even this failed to save Air NZ when its two major shareholders, Singapore Airlines and Brierly Investments failed to pump enough extra capital into the airline - forcing the Government to step in to save the national icon.
Air New Zealand's route network and operations are currently continuing as previously - but changes are certain.