New Zealand News

Plans for selling off 25% of the airline were well advanced when scotched by the incoming Labour Government in July, 1984. The new Minister of Civil Aviation, Mr Richard Prebble, dismissed the idea with an acerbic remark about pandering to “tat cats” – an unfortunate choice of phrase since preference shares were to go to airline employees.

Owens, who relinquished the chairmanship a year ago, pointed to the 25% privatisation of a body known as the Development Finance Corporation, which is in effect a Government bank charged with making loans available to promising industry ventures.

He rightly pointed out that those who bought the DFC shares were far more likely to end up as “tat cats” than people who invested in an airline.

Nevertheless, there is no sign of Air New Zealand featuring on the privatisation roster, despite British Airways and Singapore Airlines’ spectacular floats.

Owens, who was one of the airline’s main architects of revival, but who was always too ebullient and outspoken to sit comfortably alongside the airline’s rather dour and secretive management, then went on to make a surprising revelation.

The idea for Air New Zealand to acquire the larger part of the Mount Cook Group, including the country’s second-biggest airline, was hatched by himself – although the plan only came to fruition after he had left the board.

It apparently had little to do with economies of scale, as the airline has maintained. Rather, said Owens, it would allow for diversifications, hotels and ground transport, but more importantly it would provide a hedge when the next downturn in the airline’s economy came.

“The idea was to sell off most of the Mount Cook Group when funds were badly needed, but to retain Mount Cook Airlines. ”

Owens repeated that the airline still had a severe Achilles heel, a very low capital base that did not provide sufficient “tat” to weather bad times. (The airline’s capital was raised from $70 million to $120 million during Owens’ term of office, but is still well short of the $200 million minimum recommended by his board. )

The Mount Cook initiative and the privatisation plan was a direct consequence of the need to make up for sufficient capital denied by the Government, Owens said. Air New Zealand’s economic climb-out has been very largely due to the exceptionally good prices it got when it sold off its DC-10 fleet, especially the last two aircraft which were originally leased, and then hit the market when there was an unprecedented demand for the type.

Nevertheless, said Owens, he was aware of deep concern on the present Air New Zealand board, especially over the imminent arrival of United Airlines and the tendency of the Government to regard the company as a cash cow to be milked in the fat years. Signs that the company is using its present wealth to consolidate its future position for when the downturn, predicted by Owens, comes are very apparent. Apart from the Mount Cook takeover and the use of its wholly owned subsidiary, Safeair, to move into the commuter airline business, there is the attempt to wrest Polynesian Airlines away from the Ansett management and its 50% acquisition of Australia’s largest travel agency, Jetset Travel.

There is every appearance that the airline has gained the support of Civil Aviation Minister Prebble in its move to take over the Western Samoan airline.

In parallel manoeuvring in the South Pacific, Ansett has proposed the lease of one of its 767’s to the new Cook Islands airline it will manage and operate. The decision of the Cook Islands to set up its own airline follows its takeover of the Rarotonga Airport from New Zealand and the end to an Air New Zealand monopoly on services it.

Mr Prebble’s reaction to the Cook Islands Ansett lease stands on questionable grounds of propriety. He said he was opposed to the use of Ansett aircraft “under the thin guise of charter arrangements with island airways” – the clear message being that the aircraft would not be allowed into New Zealand.

So the tussle is on between Ansett and Air New Zealand for the biggest slice of the island cake, but the presence of the New Zealand airline’s assistant general manager, Norman Macfarlane, with a blank cheque on the inaugural flight into Apia’s Faleolo Airport, still has to bear fruit. The Western Samoan Government has had a good run from Ansett and the contract doesn’t end until the end of this year.

Air New Zealand’s half share in Jetset Travel puts the airline in a strong marketing position but has aroused disquiet in some sections of the travel industry, particularly in the Newmans Group.

Owens sees it as a bad move, certain to arouse even greater hostility among the Australian airlines.

RNZAF Sunderland Lives On

Old New Zealand Sunderland hands got a lift recently on learning that the only surviving veteran of this type still flying was one of their own. Excalibur VIII, a 41-year-old product of Short Bros’ yards has been fitted with 48 passenger seats and is available for charters from its British Base.

The aircraft, G-BJNS flew on wartime Atlantic patrols before being refurbished and sold to the RNZAF where it flew with No 5 Squadron from Hobsonville for more than a decade in the 50’s and 60’s.

NZ Government Frees up Rules on Foreign Airline Ownership

New Zealand will free up the rules governing foreign investment in local airlines, says Civil Aviation Minister Richard Prebble. At present, under the provisions of the 1983 Air Services Licensing Act, no company with more than 25% foreign ownership can own a domestic airline.

Mr Prebble said that future decisions on overseas investment in domestic aviation would be made under the authority of the Overseas Investment Commission, after discussion with the Ministry of Transport. The Commission’s procedures would be flexible and would consider the likely national benefit of each proposal.

As a result of the 1983 legislation, many New Zealand companies had been reluctant to invest in aviation, he said. A public company with shares listed on the stock exchange could in the course of Qf 11ormal trading find itself with more than a quarter of its shares in the hands of overseas investors. The company was then faced with giving up ownership in an airline.

Skyhawk Update Programme Gets Underway

Work on upgrading the RNZAF’s 22 Skyhawk aircraft was expected to begin in March, following six months of scratchy “diplomacy”.

The $140 million contract was won in May 1985 by the American company I-ear Seigler. Preparations for an early start went ahead until August when the US Government put on a clamp by withdrawing the licence for the export of technology.

The reaction of the New Zealand Government was that the US Government was deliberately dragging its feet because of the Anzus row. At one stage, Prime Minister Lange threatened to cancel the contract and look outside the United States.

Lear Seigler, caught in the middle, counselled patience; marketing director Ninp Cugliari maintained that the licence was issued prematurely because of a bureaucratic blunder and would eventually be approved.

Under the US Export of Arms Act, military technology worth more than $US50 million has to be approved by Congress and this was not done. Nevertheless, the feeling still lingers in Wellington that there would have been no hitches were it not for the Anzus dispute.

Early in December the deal went before the US Congress, was approved, and the statutory 30 days passed without objection from the Seriate.

The work will be done in New Zealand with RNZAF personnel working alongside the Lear Seigler experts, much in the same way in which the P-3 Orions were upgraded. Work involves the fitting of head-up displays (HUD) and integrated weapons delivery and navigation systems. It will take about three years.

Meanwhile, the RNZAF h!’ls gone ahead with work on the exRAN A-4s, standardising the aircraft to the RNZAF’s A-4K configuration, as well as rebuilding the wings of all the Skyhawks. This programme will last until 1990 and extend the life of all the machines well into the decade.

Auckland to Get Its First Central Helipad

After years of struggling to gain a downtown helipad in Auckland, helicopter operators are on the point of success. Early in the year an agreement was being drawn up to use an old but sturdy barge, 50m by 10m, which would be moored in the city’s inner harbour.

The barge plan came as anger by both Civil Aviation officers and operators reached boiling point. Over the years, scores of proposals to establish substantial pads had been rejected, almost as if in concert, by three local authorities: the city council, the Harbour Board and the Auckland Regional Authority.

The rejections resulted in a series of meetings late last year orchestrated by Civil Aviation officers and the industry. Two ideal sites had just been withheld, a disused railway yard and the end of a large inner city wharf.

At present Auckland has only one Class One helipad (authorised for public transport) and this is operated by the amphibian airline, Sea Bee Air, on the foreshore of Mechanics Bay. It is a hike from the central city and is usually crowded with fixed-wing aircraft.

Even the customary airport helipad is absent from Auckland Airport, though tarmac landings are permitted.

Aucklander’s snitch on helicopters, says Civil Aviation’s regional superintendent of flight operations, Mr Bernie Lewis, probably owes something to the frequency of RNZAF Iroquois overflights. The old military machines are particularly rowdy.

Over the past two years the number of choppers on the NZ register has doubled, to 320, with a disproportionate number going to Auckland for private and company use. Apart from aerial work and transport duties, they feature highly in search and rescue and ambulance work, particularly among the outlying islands.

Two of the four large hospitals in the area have helipads, but landings have to be made in the nearby parkland for cases going to the Central Auckland hospital. None of the big crop of high-rise buildings going up in the city has a rooftop pad.

Safeair Takes First Steps Into Commuter Operations

New commuter-type aircraft under evaluation by Air New Zealand’s wholly owned subsidiary, Safeair, are the Beech 1900, the Fairchild Metro 3, and the British Aerospace Jetstream 31. Two will be needed for a start and a stipulation is that the aircraft must have the ability to fly return from Wellington to the Chatham Islands (470 nautical miles one way) without need to refuel in the Chathams.

A decision was originally expected in mid-January, but this has since been delayed. Safeair, until now solely a freight operator, has retired its Bristol freighters but will retain its two Argosys on cargo work after launching the commuter-type services.

A Dominie Returns to the Air

The 50th anniversary of New Zealand’s first major airline service was celebrated on January 16 when a DH89B Dominie, ZK-AKY, (pictured) re-enacted the service by flying from Palmerston North to Taieri (near Dunedin) via the old Woodbourne and Wigram route. The original Union Airways aircraft to fly the service was a DH86, but Dominies later took over.

ZK-AKY “Tui” was in fact built in 1942 and flew with the RNZAF before being taken over by the National Airways Corporation which had absorbed Union. Among its later owners was Mount Cook Airlines. It was bought by Mr Tom Williams of Masterton in the early 1970s and more recently returned to flying trim by a $50,000 restoration.