Air New Zealand's purchase of the 50% of Australia's Ansett that it does not already own covers an immediate cash payment to News Ltd of A$580 million ($367 million) and a subsequent payment valued at A$100 million in cash or in shares.

Air New Zealand chairman Selwyn Cushing says the price and payment structure agreed between the carrier and media giant News "...reflects the value of integration and synergy benefits available within the two airline groups."

"Other factors taken into account include progress made to date with the implementation of Ansett's Business Recovery Programme, and generally improved inbound traffic and economic conditions in Australasia," he adds.

Air New Zealand says that under the deal it will pay News A$580 million for its 50% share in Ansett Holdings immediately. Ansett Holdings groups domestic operator Ansett Australia and 49% of international operator Ansett International. The majority 51% of Ansett International is owned by Australian investors.

Two to four years later, Air New Zealand says, it will issue Air New Zealand shares to News "...equal to 10.5% of the shares on issue at the time of completion, adjusted to take into account subsequent changes to the capital structure".

Combined, Air New Zealand and Ansett have assets worth approximately A$6.69 billion. Together the carriers will control an estimated annual revenue base of A$5.8 billion, employ 24,000 staff and operate 110 jet aircraft plus regional turboprops.

Source: Flight Daily News