PM Jacinda Ardern tells Minister of Regional Economic Development Shane Jones his calling for the sacking of Air NZ’s chairman went ‘a step too far’

The Prime Minister has pulled Regional Economic Development Minister Shane Jones into line after he called for Air New Zealand’s chairman Tony Carter to resign.

Jacinda Ardern says the New Zealand First MP’s comments “were a step too far.”

But Jones has stopped short of an apology, saying only that he knows he has “no authority as to the future tenure of the Board.”

Jones called out Carter on Wednesday morning, after earlier slamming the airline for cutting some of its regional flights. This prompted a strong response from Carter, who on Tuesday said he had written to Minister of Finance Grant Robertson, one of two shareholding ministers, to “reinforce that the airline will always act independently.”

The Government owns 52% of the airline.

Arden says as Jones has always been a strong defender of the regions – “[his comments] won’t surprise anyone.”

She explained to Jones that he is “absolutely entitled to an opinion, which he has shared, but suggesting anyone from the Board should go is a step too far.”

But Jones’ job is safe, Ardern says – “this is not a sackable offence.”

Asked if she was confident Jones was not going to make similar comments again in the future, Ardern says Jones is “of course always going to have opinions.”

“What we have to do is make sure that we draw the line, as a Government we have a large interest in Air New Zealand, to make sure we don’t overstep the mark. Even though he has not got the ability to follow through on what he has suggested, it has gone too far.”

Challenge remains the same

Jones defended his comments, saying that because of his “championing of the provinces, I have made, I believe, a fair bit of traction on the issue.”

But he says his challenge to Air New Zealand “remains the same.”

 “I have been told that whilst I am a Cabinet Minister I have no authority as to the future tenure of the Board, I accept that – that has been made crystal clear to me.”

He reiterated that every time a chief executive pokes their nose into the political boxing ring, they have two options: get into politics or go back into the corporate box.

“If anyone on that board believes they are going to muzzle me as a champion for the provinces, they are sadly mistaken.”

Asked if he stands by his comments, he says they have “gone through a process of refinement.”

“Both Grant [Robertson] and the Prime Minister have said ‘Shane, you have a strong view as a regional, provincial champion but you have no authority to effect changes at the level of the Board – I accept that.”

Called out by Bridges

Opposition leader Simon Bridges was quick to criticise Jones and the Government on Wednesday afternoon over the saga.

“If anyone thought this Government was a friend of business, now they know that’s absolutely not true,” he says, adding that if business wasn’t worried before “they certainly will be now.”

Bridges called Jones out for accepting Air NZ’s invitation to a dinner on Thursday night with former US President Barack Obama.

“If Shane Jones is so much the enemy, so much the foe of Air NZ, why has he accepted corporate hospitality from Air NZ to be at the Obama dinner?”

Jones says he was invited to the dinner and is the only NZ First MP making an appearance.

He disputes Bridges criticism, saying he’s going to listen to one of the “greatest Western leaders of my lifetime.”

He says Westpac and Mastercard are also sponsoring the event. As for Air NZ – “as a proxy for 52% owner of Air NZ, I’ll go where I like.”

He cannot recall who sent him the invitation.

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80 Comments

I hope this very uncoordinated coalition government just stay in the office for three years and do nothing because anything they do will be very like to do more damage than good to New Zealand.

Also, for the sake of your baby PM, please just do some easy work; do not make yourself over-stressed physically and emotionally; do some regular exercise to prepare for the deliver day.

Freak show just getting in to gear.

A tinge of sexism here. What ever you think of the Labour party (I'm no fan either), or Jacinda, making patronising comments doesn't help.

You could just as easily argue that we had 9 years of 'doing nothing' and look where that got us.

up
16

xingmowang,

Just as patronising and ill-formed as i would expect from you.

You would presumably much prefer the previous government which not only did nothing about the housing crisis,but actively made it worse with their immigration policy. The government which insisted that NZ was not a tax haven-until the Panama papers proved otherwise. The government which had a $400m irrigation fund to make it possible to have more dairying on unsuitable land,further polluting our waterways.
I could go on,but I don't want to waste any more time on you.

These unelected leaders that make up the coaltion of the losers , are getting way ahead of themselves .

One acronym...MMP. The same political system that gave us the national party and their motley crew. National never gained a majority to govern alone either.

When National were elected there was a total of four parties in the Coalition. Looking at which parties they were you could argue that’s a coalition of losers.

Would you prefer some lesser form of democracy where the majority did not vote for the government?

Everyone who voted for either Labour, Greens or NZF are happy with this government over a National lead one. That means that THE MAJORITY VOTED FOR THIS GOVERNMENT. Deal with it. Sour grapes are terribly unappealing.

Local Nat MP Nathan Guy was also very critical of Air nz decision around Kapiti service. His comments would provide some balance here?

Yes perhaps they do. But not so much those of Mr Bridges in saying that Labour is no friend of big business. There is no need for him to imply that National is a friend of big business. We, as the ordinary folk of this country know all about that, & have suffered nine years of being second fiddle to that priority. This little scenario, when you think about it, actually confirms that sentiment.

Good heavens, how precious. Has it been forgotten that ANZ got way out of line and had to be bailed out with tax payers money. Personally the way I have seen them treating passengers including me, you would never think they owe us their high flying jobs. Norris in his time recorded and lamented that the airline was all about flying planes not people. Looks like they have reverted to type.

Air Nz has been supported by NZers loyally abroad for decades, they need to step up. We have all held our noses at their dwebish ads, play to our "kiwiness".

If they can take a loss AKL to WEL at $45, then they can do it to the regional airports. Lost their way.

Meanwhile, here's an Air NZ investor presentation given to a Deutsche Bank virtual briefing today - http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/315837/276588.pdf

Makes impressive reading - why would kill the goose than lays the golden egg?

Rob Fyfe had some interesting points this morning on the topic - noting the $200 million dividend Air NZ pays to government annually.

Around the 4min mark:

https://www.msn.com/en-nz/news/national/pike-river-re-entry-genuinely-po...

So if the government was so concerned about flights to small towns in NZ they could take that $200m and charter planes. I suspect they won't.

Good idea

They could set up Kiwifly as a collaboration with Kiwibuild. Build affordable housing in areas with cheap land and charter flights for FHBers who work in Auckland.

It would be one way to keep the kiwibuild houses cheap, slap em right on the flightpath at the end of the runway. a dinky toy plane roaring over head every 15min flying to some god forsaken hole like.. pretty much everywhere air nz doesnt fly to anymore.

Do we really go back to the day that the Government decides what companies can and cannot do? Either we run these companies as business or we run into the ground where they get subsidise every year like we used to do with rail and airlines.
Also Air NZ were bailed out before because of the failed acquisition of Ansett - an airline they was required by the Australian Government to fly unprofitable routes. Is that what we want?

No thank you is my reply to your rhetorical question

If the share price dips, it affects ACC - 25046308 shares (2.23%) and NZ Super Fund - 7943351 shares (0.71%) as of today (Companies Office rego 104779).

Total issued shares is 1,122,844,227 so small wobbles in price, multiplied by that, generate big dollar swings.

Needs careful handling, much PR massaged into the likes of JP Morgan - 60820280 shares (5.42%) - and Citibank - 42724338 shares (3.81%).

What Jones has neglected to notice are the second- and third-tier operators who can and do fly into welfare sinks exalted regional destinations like Kaitaia.

There's absolutely no point in forcing AirNZ to maintain a disparate fleet of flying pencils for these trips - that;s exactly what did for Ansett, over the ditch, back in the day. AirNZ has standardised on Airbus for the bigger hauls and the ATR jet-props (ATR is a JV out of Aérospatiale, now Airbus) for the minor ones, and foobarring that set-up is in no-one's Interest.

Jones is better kept in the Forest/Trees box. His invective there at least has few financial consequences.

It's really quite worrying that so many Ministers seem to think that being a Minister means they can tell the man what to do. This sort of thing can do great damage to NZ's reputation as a good place to do business and to invest, and consequently to share prices and the savings of ordinary people

Thank you for pointing this out ..............Mr Jones has gotten way too big for his boots since joining this herd of cats that make up our Government .

He should stick to issues that concern him and his ministry , handng out lollies to plant trees and reduce rural unemployment ............. and leave business to run their businesses

Totally agree.

Surely the correct and rational response is to tender an offer to purchase contract regional flights ex Jones's regional development fund to all players.

Guaranteed financial return from Crown.

We would soon see the actual costs of running these services.

How hypocritical is that? "Shonky" Shane slams Air New Zealand, but he's happy to accept the free kai. Some things never change.

@alpeg Its a culture of expectation that exists in folk of his ilk

The cost of regional flights via Air NZ is a lesson in extracting maximum possible value from a captive market. As long as it sees its only accountability as shareholder value, it is free to treat regional customers as little more than prey. And it does. In its regional operations Air NZ is a phenomenal expense on national enterprise, let alone private travel.

So should the government privilege its shareholder value over any measure of efficiency and economy in the national interest? Surely, the point of this or any public stake is to exercise some concern with the national interest. Or is the government merely another rent-seeker? Shane Jones is right to open up the question.

Air NZ's position appears to be that the government should shut up and enjoy the benefits of domestic semi-monopoly. If the government agrees, it should buy into the host of other semi-monopolies here.

If AirNz is ripping off regional passengers so much why hasn't anyone come in to take the business off them? Perhaps because it is not a complete rip off, the costs are high to operate a small aircraft.

Had a look at rex.com.au, sydney to dubbo, minimum fare a month out is $162AUD. similar price to a Chch to Invercagill on AirNZ, except airnz offers 7 flights a day, Rex does three Sydney to Dubbo.

I am quite shocked by Shane Jones, I never considered any of our politicians especially corrupt, until I saw him, my idea of a corrupt NZ Politician if ever there was one.

He has a total lack of Professionalism and manners

This administration ........... is no such thing , its shambolic, stumbling from one crisis to the next .

Jacinda gives the impression of being sloppy, not on top of the details on important issues , and not in control of this herd of cats euphemistically called a coalition

60 days in and we are already fed up with all mess they are making , including ;-

Denials , obfuscation and spin on why it has no intention of keeping election promises
Hearing horror stories of drunken orgies and underage drinking at a Labour camp
Coalition partners saying and doing doing as they please
Coalition partners in over-reach going way beyond their station
Pissing the Aussie Government off (our biggest trading partner )
Removing measurable education standards in high schools and replacing them with ................. nothing
Overturning the 90 day trial for new staff which just ensures that we will not employ anyone through WINZ , thus placing those on welfare in a worse position
The Defence minister using Helicopter Gunships as an Uber tax service .

And now Shane Jones getting ahead of himself

We expect more from our elected leaders , this is not some tinpot African country

Your 'we' is not me.

Boatman, how would you expect more from this lot of unqualified rabble?

Couldn't agree more Boatman - a governing party that can't even mange its own internal politics as consistently poorly over such a short period of time as this one has, certainly doesn't engender any confidence about its professionalism and ability to handle real world problems when they inevitably develop. I am hoping its just inexperience and that they will get their act together as I had thought 3 yrs was far too short to do any damage, but now i'm not to sure.

Its certainly a "we expect" from me, because anyone who is satisfied with what we've seen to date has some very low standards.

That is you and not me. Though I do have an especially low regard (and getting lower) for NZF and all of its MPs. This however is not a reflection on Labour especially, that is if NZF had gone with National we would be seeing the same issues.

"We expect more from our elected leaders , this is not some tinpot African country"

It will be in two and a half years time.

It's chance for the smaller airlines to step in and provide the service.

What would be really good to see would be for them to develop a single brand & website, say Air Aotearoa for people to book with the smaller airlines on their regional routes, even if the operations and operating companies stay separate.

it will never happen , these routes are simply not profitable for anyone .

I flew on a practically empty flight in 2016 , there was no way hell it could run a profit with a 20% seat take up rate

Ardern sack Jones - really? Like to see that happen under Winstons nose. ha-ha

It will never happen , Winston is the iron fist inside the velvet glove

Agree, Shane Jones is NZFs blue eyed boy, the up and coming Winston replacement and gawd help us.

My reading of Question Time in Parliament is that Ardern has increasingly shown an adeptness for bating off "controversial issues" from the floor. She has handled Peters as Shipley could not or couldn't be bothered after she knifed Jim Bolger. Points for that alone. She's already cooled mining and UK posion response. Largely already to bed.

National had better get some policy up and running themselves. Their song sheet will run silent soon. Labour will have put through all the previous Governments legislation soon, and be rolling out May Budget and kiwibuild allocation. That's going to swamp the basis of National's criticisms. IMO.

Has anyone even noticed the rapid rise in INDUSTRIAL ACTION throughout NZ in the past 60 days ?

Strikes called at the drop of a hat in ports , rail and public transport.

Its damaging to our economy to have port crane drivers earning $100k per annum demanding more , hell Doctors dont even earn that much

*Its damaging to our economy to have port crane drivers earning $100k per annum demanding more , hell Doctors dont even earn that much *

Pity that you are completely wrong there.. Starting rate for a medical officer under the DHB collective contract is $118k/pa for a full time position https://www.asms.org.nz/clause-12/

The Jones Boy - he only sayin what everyone is thinking. Including National's Nathan "say it again and I'll bit your lips off" Guy.

He done good.

No matter how many times you write this here, it doesn't make it true.

Thanks for your feedback. Noted.

De rien Monsieur Gayford

Don't worry Ex Pat, I'll be here until TD rates take off again. I'll enjoy that even more than a surprise Labour win.

I think we’re both hoping TD rates move up. It will assist my retirement planning and give some opportunities. Not so much hoping Labour win an election as they are feckless and there’s no point taking risk when Taxinda is after the profits to feed the trough of no hopers.

Ex Expat, having gone for the five year TD in January, I am of the thinking deposit rates won't rise much, if at all. I think tighter access to credit might be more of an issue slowing things down considerably. To many debt junkies out there that can't cope with even a one percentage point increase in lending rates.

RBA minutes were great solace reading yesterday. Higher rates are coming. Fed is moving OCR up to ours. Not rocket science from here.

I don't see it. The FED are upping the rates because they have painted themselves into a corner. I don't see any growth, just more of the same then deflation.
http://www.alhambrapartners.com/2018/03/20/the-real-basis-for-these-rate...

"New Zealand won't be immune from things that are driving US rates higher, it eventually will have an impact and the Reserve Bank will have to adjust," Potter said. "New Zealand has to borrow quite a lot of money offshore and our rate has to stack up globally, otherwise we might see some flows out of New Zealand government bonds into US Treasuries."
https://www.newsroom.co.nz/2018/03/20/98535/us-rate-hikes-stump-nz-bonds

Surly, NZ is no Island. Just a little bump would do.

Exactly, and ditto goes for the Aussie banks

show me the growth?

There's nz wage growth.
And a falling dollar will be inflationary.

The only wage growth I see is in the bureaucracy. The next question is where will the money come from to pay the interest?

High Court Real Estate Sales Ltd...?

100% auction clearance rates

Quite right. Extra cash is great opportunity. Selling something big at the top is lucky for some, crazy property prices couldn't have been more timely. Now interest rates will go up, double happy.

De Jones boy did done drop a real clanger.
And he is going to the Obamafest as a guest!!

Oh yeah, he's a certified shocker.

He still done good for regions though.

Theres no competition in the airline industry, code sharing and monopoly power rules. Why can you buy cheaper flights from the USA to NZ than NZ to USA?
https://www.mythofcapitalism.com/introduction?platform=hootsuite

That is patently untrue. If it was, monopolists would be raising prices. But the reverse is true as a dig into the NZ CPI data clearly shows:

International air fares, index
- Dec 2017 = 1052
- Dec 2012 = 1237
- Dec 2007 = 1315

No monopolist industry would do that. Competition did that.

Domestic air fares, index
- Dec 2017 = 1005
- Dec 2012 = 1001
- Dec 2007 =  919

In ten years, these have risen less than 1% per year. Again, not the fingerprint of monopolists.

HI David, maybe I'm wrong. How I see it is the main routes have competition from Jetstar, the international routes seem less competitive.

I've noticed planes are always full today, it's hard getting discount prices unless I buy way in advance and even then often discounts are not worth it ,especially if you want flexi fares.

I don't bother buying return tickets, I want to be flexible and it doesn't pay to buy flexi tickets forward. I often buy a week before I return, I use sites like sky scanner or kayak but often if I ring Air NZ they match. I try to fly air NZ when ever possible as other airlines have variable inflight comfort levels. I find I often end up using a code share airline, last time Cathay, I love cathay and it was a lot cheaper.

The USA route has little competition looking at fares but that could have changed. United were due to fly on the route and compete, I haven't seen any sign of that personally, Hawaii often compete but it's more hassle. Flights to San Fran cost me just as much as to LHR.

Biggest change in ten years, the amount of people flying, smaller seats , it's more like you are just a number.

I regularly fly the AKL- KAPITI route and was shocked to find ANZ pulling out. From my experience there are very few empty seats on that route, it's been running since 2012 so why pull it now. Kapiti is in the top 10 fastest growing regions in the country and is a strategic backup for Wellington. There is an alternate driver here, word around Kapiti is the land owner in and around the airport ( rumoured to be the Todd family -shock surprise ) has large scale residential development plans. I guess time will revel all but there is a dirty smell to all of this !

It’s 60 mins from Wellington airport. Why fly to 2 different airports 60 minutes away from each other? They’re hardly breaching your human rights by not flying there

Actually it is not, it's a bus ride in traffic to the Wellington Railway station depending on linking with the next available bus, then an hour on the train assuming the train is ready when you arrive so at the best an extra 2 hours perhaps you would like to try it to confirm ? So for anyone travelling from Auckland it's a pain.

I think most sensible NZF voters are now ashamed for bringing such a bully into Gov -

sorry to say that I feel ashamed that we hear about such silly, childish, and illiterate attitude and behaviour from a minister of the crown who thinks he can call the shots and tough enough not to be muzzled ... the biggest shame is on his leader WP who came out to defend his bully boy !! -- what a circus !

This event showed us all that some eccentric mugs should be kept away from the power wheel and these should be sent either to a bush or an Island to live unrestricted happily ever after in the wild.

Wonder how many more people need to be muzzle by the PM .... and what will happen when she takes her maternity leave and leaves the hen house to the FOX ?? .....
It is indeed the CoLs !

Hilariously the CoI would have loved for NZF to go with National, delicious irony.

Seems the lady with the big teeth is having a lesson about putting out fires ! LOL
It will be an even bigger circus when she is on maternity leave, Jones/Peters/Davis dare I say it are just all boys from up North totally out of their depth..... what could possibly go wrong next..... won't take long to find out !

Shoreman,the size,shape or otherwise of Ms Arderns maxillary central incisors has no bearing on her ability to govern,please keep the personal attacks out of your arguements.

As a State Owned Enterprise Air NZ has both social and commercial interests to balance. If the Board moves too far in either direction it can expect vigorous stakeholder comment. Private shareholders would have known when they brought their shares that optimisation of profit by the Board was constrained by meeting its social obligations

Air NZ is NOT a State owned enterprise. It is monitored by Treasury according to the Wikipedia page. Is there a mission statement, charter, or government directive you can reference or are you simply voicing your opinion on what was intended?

Next thing he'll be demanding X rated movies are added to in-flight entertainment systems.

See the Herald article this morning...it seems he is not the only polly to berate the airline....and speaking of hypocrisy...he is now on the board enjoying free travel:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1201...

"And he's not the first with an eye on the polls to have a swipe at the national carrier.
A month out from the 2014 election, Sir John Key chose Blenheim as the venue to publicise how he'd raised the issue of high regional airfares with the airline."

Plenty of support from regional Mayors for the Jones Boy.

https://www.radionz.co.nz/news/political/353086/air-new-zealand-can-t-ca...