Jones was right to blast airline board

Shane Jones is a loose cannon rattling around on an increasingly shambolic ship of state, but the angst over his latest outburst displays a lack of awareness of the role of Air New Zealand and an appalling ignorance of recent history.

Air NZ isn’t a firm like any other. Apart from an ill-fated interlude in private hands from 1989 to 2001, it has been a government operation.

The airline goes back to 1940 when TEAL was established.

It was re-named Air New Zealand in 1965 and acquired the National Airways Corporation in 1978, another state outfit formed in 1947.

Successive governments have used airlines as a means of national economic development.

When Air NZ faced extinction in 2001 after a disastrous expansion into Australia, Michael Cullen cut an $885 million cheque to acquire 83 per cent of a commercial operation on the edge of liquidation.

He didn’t do this because he sniffed a capital gain. Both he and Deputy Prime Minister Jim Anderton made it clear that the state was willing to pay to keep the koru airborne because our commercial and tourist industries relied on a national airline.

Jones’s chastising the current board for failing to meet the implicit obligation of servicing the economic needs of the wider economy is historically and economically sound.

The person who is out of step is Tony Carter, the current chair, who thundered in a letter to Finance Minister Grant Robertson: ‘‘Any appearance of a lack of commercial independence is viewed seriously by the Air New Zealand board’’.

He’s right to focus on the appearance of independence, because that’s all it is.

Air NZ exists as a result of ongoing Crown meddling and remains solvent thanks to government-negotiated access to foreign markets and cheap cash due to its Crown ownership.

The state still owns 52 per cent of the shares, appointed a former prime minister to the board and provides an implicit guarantee to bail it out should anything happen.

This isn’t an arm’s length shareholder dispassionately waiting for its dividend cheque.

Air NZ exists to help build the local economy. Personally I think we should have let it fail in 2001.

Jones will receive a lot of support on this, and rightly so. Conservative commentators will be sucking on freshly picked lemons but Jones can safely ignore them just as he intends to discard the Prime Minister’s scolding.

If Carter wants to keep his job, he’d better keep those regional birds in the sky. And now he will.