New Zealand News

The aircraft is now flying under the experimental category on field trials. When these are completed, the company expects to become the first in the world to market cheap, efficient kits which will recoup their cost within a year. The problem, cool running, is being tackled by experimental baffles around the engine.

The test aircraft is fitted with a Lycoming 10-720 engine which is producing up to 480 hp on methanol, compared with 400 hp on avgas. For general use, there is a slight penalty: it takes 1. 6 litres of methanol to produce the equivalent power provided by 1 litre of avgas, so the fuel flow is set 50% to 60% above avgas. Under working conditions, this reduces Fletcher’s endurance from about 140 minutes to 90 minutes. Operators say this is no problem with normal work.

At present, a natural gas plant in Taranaki produces 1100 tonnes of methanol a day as a byproduct, and most is now being exported. It costs 26 cents a litre or less than a quarter the cost of avgas.

According to Pacific Aerospace’s chief designer, Murray McGregor, a breakdown of all costs including a probable Govern- ment tax on methanol, should reduce by more than half the fuel costs of an operator who switches from Avgas.

An initial concern that methanol would be too corrosive in tanks and feed systems was allayed by a Department of Scientific and Industrial Research discovery that a small amount of water (up to 1%) added to the fuel would accelerate the formation of a protective barrier on magnesium alloy. Water readily dissolves in methanol.

McGregor said tests indicated methanol was thermodynamically easier on engines, though its effect on lubricants had yet to be fully assessed. Because of its ability to pull greater power out of engines pilots had to adapt to lower throttle settings.

He does not see it coming into use on piston engined light transport aircraft because of the endurance penalty, and most of the smaller aero club and private aircraft are now switching to ordinary road petrol as an economy.

Three New Zealand air agriculture concerns have undertaken to join in the evaluating process. Lycoming in the United States was initially helpful, but has become noticeably less so since signing a contract last year with Brazilian interests to develop a methanol kit.

The supply of avgas tends to be a problem in New Zealand. It is not produced locally, and there are still enough bigger piston engined aircraft to draw heavily on stocks.

Did the Former NZ Government Plan to Sell Air New Zealand?

Did the former New Zealand Government toy with the idea of selling off the national airline to finance a plant for producing urea artificial fertilizer from natural gas? The intriguing claim (not to mention the scope for word play it gave sub-editors) was made by industrialist and transport boss, Mr Bob Owens. Mr Owens relinquished his chairmanship of the Air New Zealand board in April, after a three year stretch.

Members of Sir Robert Muldoon’s government have denied the charge, but Mr Owens persists. He says the sell-out was suggested in the black days of 1981 when the airline was reeling from a $90m operating loss, and the “cover up” disclosures from the Mt Erebus crash. Mr Owens says he was told about it by a senior Treasury officer (who he named).

There is no doubt it was a threatening period for the airline’s independence. No less than six outside inquiries – several Initiated by Treasury – were examing the airlines economy and operating procedures, and the pressure was so great on airline administrators that the day-to-day management threatened to grind to a halt.

The powerful department, headed by Prime Minister Muldoon, tried its best to get the company to cancel its Boeing 747 reequipment programme and stick with DC-10s.

Only a tooth-and-nails fight by caretaker chief executive, Mr John Wisdom, pushed through the jumbo orders. As it happened it turned out to be the biggest single factor in the airline’s return to profits.

Mr Owens made his revelations because of Treasury’s fascination for creating corporations out of Government and quasi-Government bodies. One of the planks of the present Labour Government was to turn Air New Zealand from a company into a corporation with all the paraphernalia that goes with an annual white paper tabled in Parliament.

The plan was smartly dropped when counsel wised the Government up on the reality of operating international services in a cut-throat commercial climate. The airline is now safe, though Mr Owens’ plan for a 20% privatisation has been ditched, at least temporarily. Labour’s Civil Aviation Minister, Mr Dick Prebble, is shaping up as one of the best and most active the industry has seen.

Meanwhile, the airline was set to announce its biggest operating profit yet, more than $100 million, which comes on top of last years $79 million profit bounce-back.

However, critics have noted its continuing failure to separate domestic and international services on its balance sheets. The airline lumped them together after the merger with the National Airways Corporation in 1978. It denies a frequent claim that high domestic fares help cross-subsidize international operations.

Pilot Shortage Becoming Critical

A severe shortage of Civil Aviation pilot examiners threatens a crisis in pilot training. Already this year, the Division has had to cancel two exams, a commercial pilots exam scheduled for May and the August exam for the airline transport pilots’ licence.

Both cancellations came out of the blue throwing flying schools into confusion and threatening a big push by Air New Zealand to absorb 80 new pilots in time for major re-equipping later this year and throughout 1986.

Normally, Civil Aviation has an establishment for six full time pilot examiners. At the beginning of this year it was operating with three, and in early July was down to just one.

Part of the problem is due to the fairly sudden demand for skilled pilots. Apart from the two big intakes into the National airline, Newmans Airlines took ori 38 early in the year, and blossoming third level operators are seeking more.

So for Civil Aviation, it has become a dog-chasing-its-tail affair. Not only is it losing its pilot examiners to commercial operators, but it is also finding it extremely difficult on Civil Service pay rates to compete against the airlines in recruitment. The Air Force has also felt the drain, particularly in No 40 (Hercules) and No 5 (Orion) Squadrons which at one stage had to curtail some flying. As a result, the Service has temporarily blocked the ability of aircrew to leave on three months notice.

No doubt Civil Aviation will hold the vital commercial and airline exams before the end of the year (normally four of each are set for the year), but not before delaying hiccups have occured in pilot roster ladders. In July, Air New Zealand was already reaching the stage where it was “bottom heavy” with F. 27 pilots, many of them captains unable to move on to Boeing 737s because co-pilots with commercial licences could not sit the necessary airline transport exam. Its an ironic situation on a year ago when many still young and well qualified pilots were getting the company’s golden handshake.

Meanwhile, another exam problem – apparently also stemming from the manpower shortage – has cropped up. The division has good reason for believing Aero Club members have been offered money to sit exams for others. A charge has already been laid in the South Island, and others are understood to be pending.

Pilot examiners (presumably the single one at the moment) have been ordered to tighten surveillance, especially on people sitting outside their home towns.

Air New Zealand Looking To Expand in the Imminent Shadow of United

The arrival of United on the South Pacific later this year (or early 1986) is prompting subterranean upheavals.

Continental announced it would increase its Auckland-US services from five a week to daily from October 28, thus becoming the first to rival Air New Zealand’s daily link.

But the New Zealand airline’s attention at the time was absorbed in the problems of trying to increase its own services. Talks began at the end of June in increasing the Auckland-Tokyo capacity, re-opening direct services to Hong Kong, and putting a third weekly flight through to London’s Gatwick Few hitches were expected with the Japanese; only a nuts and bolts working out of capacities with Air New Zealand’s Boeing 747s and Japan Air Lines smaller DC-10s.

But the talks were expected to be a lot less cordial with the British over London and Hong Kong.

Air New Zealand has been trying to increase its services to London for a long time, but negotiations last October foundered. The company claims demand is there, but the British Government says the 44,000 seats (one way) provided by Air New Zealand and British Airways is ample. Six other airlines also provide a London link.

To some extent, the New Zealand airline’s case has not been helped by the New Zealand Tourist and Publicity Department figures which shows only a 1. 7% increase in visiting Britons over the past year.

Also seen as a factor in British resistance is the substantial number of fifth freedom passengers flown on the route between Los Angeles and London, at fares considerably lower than those offered in the airline’s home country.

And behind the scenes – and yet to be acknowledged by the airline and Government are unofficial “feelers” for an Air New Zealand service to Germany with reciprocal rights into New Zealand for Lufthansa.

According to German sources, Air New Zealand is down to evaluating three German centres, one of which is Frankfurt.

There is some suspicion that the New Zealand negotiators are using the Hong Kong services as a lever in forcing the British hand, though this is denied by Air New Zealand and the Government.

The direct Auckland-Hong Kong service ended last January 31 when Air Niugini pulled out of the tripartite “turn-about” arrangement with Cathay Pacific and Air New Zealand. The old agreement called for an intermediate port of call (Port Moresby). and disagreement between New Zealand and the British Government had prevented the writing of a new agreement.

New Zealand claims that as Hong Kong is a Crown Colony, Cathay Pacific is a British airline, and as such has to share the same parcel of rights with British Airways. This would prevent Cathay selling excursion tickets in New Zealand for London via Hong Kong.

Cathay claims this interpretation is wholly dubious. The airline has offered several times to restart services with Air New Zealand, but says these offers have been rebuffed.

GA Operators Being Hit with Customs Evasion

A Custom’s clamp-down on the importation of light, second-hand aircraft resulted in the seizure of five machines in the first half of this year. They are being held in a locked hangar at Christchurch.

The aircraft were all flown from the United States. Customs claimed the owners undervalued the aircraft in order to reduce the 10% sales tax.

The seizures followed a visit to the US earlier this year by two Customs agents. The Department refuses to discuss details of the purchases except to say charges are being laid.

Major Airports to Operate as Public Companies

Moves are underway to restructure New Zealand’s larger airports, including Auckland, Wellington and Christchurch, along the lines of public companies. At present these airports are owned jointly by local governments and the Government, with Civil Aviation responsible for navigational, air traffic control and crash fire services.

One of the results of restructuring would be the right of individual airports to set their own airport dues rather than following a national formula based on aircraft weight.

The plan to move to a company structure was announced by the Minister of Civil Aviation, Mr Prebble, to representatives of 24 jointly owned airports. The scheme envisages company boards with equal numbers of local authority and Government nominated members.

An anomaly among New Zealand airports is that some are very rich while others are very poor. Auckland Airport, which is run by the Auckland Regional Authority, has $80 million sitting in reserves, all of which by regulation must be spent on the commercial side of the airport. The reason for its wealth is that international wide-bodied aircraft provide the best returns. Conversely, Wellington Airport which is very busy with smaller domestic traffic is also very poor.