The Government's reaction to news that Air New Zealand was flying Australian Defence personnel to the Gulf caused quite a furore a few months back. MFAT boss Simon Murdoch ended up being the fall guy for the fact that Ministerial staff either didn't show briefing notes and cables on the flights to Ministers or Ministers did not read their briefings (we don't know how much his shoddy treatment over this matter has weighed in Murdoch's mind over his decision to retire early next year).
Another consequence of the Government's handling of this business was the loss of significant revenue for Air New Zealand. All New Zealanders as tax payers (the Government owns most of Air NZ), as well as those private investors still owning shares in Air NZ suffered as a result of this intervention.
We were therefore very pleased to read the following from Fran O'Sullivan this morning
Air New Zealand chairman John Palmer has begun briefing senior politicians on an Australian request for the national flag carrier to reapply for contracts to ferry Aussie troops overseas.
The airline's military charter-ferrying business across the Tasman was cancelled by the Australian Liberal Government after erroneous allegations were made that it had covered up an operation to take Iraq-bound troops into a theatre of war.
The resultant furore ended up costing Air New Zealand an estimated $10 million to $15m in lost revenue in annual terms.
But Beehive sources suggest the new Rudd Government has since lifted the ban, clearing the way for the airline to once again compete for contracts. Air New Zealand appears to be leaving nothing to chance by briefing politicians directly this time - rather than relying on the Ministry of Foreign Affairs (MFAT) - thus making sure there is no potential for the Labour-led Government to again publicly chastise the airline's senior personnel for breaking an informal no-surprises policy.
At a time when the airline's finances are under pressure due to rising fuel costs, the potential to win back a contracting business that produces good margins is valuable.
The outcome of the briefings is also important to the continuance of good relations between the Government and the airline. Even though Air New Zealand is a publicly listed company and not a state-owned enterprise (SOE), it has found itself virtually having to second-guess politicians' whims - a feat that defied MFAT's bosses.
Palmer - one of the most courageous chairmen running Government-related boards - stood strongly behind his management when communication lines with ministers became tetchy after the charter matter developed into a political football.
