Air New Zealand has withdrawn its "world's warmest welcome" for chief executive Gary Toomey after he agreed to quit by "mutual agreement".

Mr Toomey, who joined Air New Zealand (ANZ) last year, he felt it "appropriate" to step aside following the renationalisation of the carrier last week, and the collapse at Ansett.

"I believe that the board's decision to place Ansett in voluntary administration means that the future Air New Zealand must set its sights on different goals from the ones that drew me to the company," Mr Toomey said.

ANZ chairman Jim Farmer said: "[Mr Farmer] has encountered a set of problems that were not of his making and has worked relentlessly to find answers to them."

Accountant Roger France, who the government appointed to the ANZ board as part of an 885m New Zealand dollar ($372m) rescue deal, as been appointed as acting chief executive.

ANZ has also announced it will reduce capacity by more than 10% next month, a move unions forecast will cost 800 jobs.

Virgin moves in

Meanwhile, discount carrier Virgin Blue has appointed Goldman Sachs to advise on funding options, as it moves towards a stock exchange listing in 2002.

"Virgin is exploring alternatives that include inviting private equity investors to acquire a cornerstone shareholding to help it take advantage of significant opportunities brought about by recent events in the Australian airline industry," Virgin Blue said in a statement.

The airline, owned by British entrepreneur Sir Richard Branson, said the extra funding would allow it to add more services as it gained ground in the market due to the demise of former Air New Zealand subsidiary Ansett Australia.

Sir Richard will meet with his Virgin Atlantic's joint venture partner Singapore Airlines on Wednesday.

SIA has said that, contrary to some media reports, it would not be discussing discount airline Virgin Blue or Ansett, which is now up for sale, at the meeting.