New Zealand News

Earlier, Air New Zealand toyed with the idea of flying via Tahiti and Dallas, but doubt about the profitability of this route has prompted further study of routes via North America.

Air New Zealand’s managing director, Mr Norman Geary, confirming the airline’s interest, said Germany was not yet a firm option. “But we certainly hope to get some destination in one of the European countries:” The airline at present flies three services a week to Gatwick, via Los Angeles.

Meanwhile, a somewhat ill-tempered, three-way tussle has developed over Singapore Airlines direct services into New Zealand. SIA operates two services a week into Auckland and with enthusiastic backing from Christchurch’s civic fathers is now seeking a third and possibly fourth service into that city.

The rationale is plain, says SIA – its Auckland flights are ‘chukka’ and a sizeable number of tourists it is flying in would prefer to go direct to the southern city.

Negotiations in late February developed into a complex argument, with versions differing from both sides. In return for second-city rights, the Government demanded on-flying rights beyond Singapore to Europe. Singapore Airlines suggested this was a little steep and offered rights through to the Middle East. If New Zealand wanted to go to Europe, then SIA should have rights beyond Auckland to Los Angeles, the airline said.

The dispute was made no easier by the premature announcement of the Acting Minister for Civil Aviation, Mr Colman, that a deal had been reached and the services might begin before the end of the year. It aroused a mighty storm in the House and a quick denial by the Government.

Further talks are expected at the end of June, with politicians split on regional and policy differences and the Minister, Mr Prebble, sounding a pessimistic note.

Prebble points to the interest shown in New Zealand services by Garuda, which has been talking to Air New Zealand, and by Thai International, which has been talking to the Government.

He told Australian Aviation: “If the Singapore authorities are determined to bottle us up, we may have to look towards Thailand or Indonesia, or someplace else for such rights. ”

There were no immediate plans for Air New Zealand to fly westwards to Europe, he said. But it was a valuable right to have up your sleeve for a later date.

For some time, the aviation fraternity has been aware of a difference in opinion over the liberality, or otherwise, of dispensing international rights. While the present Government has markedly eased up on international rights and wiped away a jungle of fare-setting restrictions left by the previous Government, Prebble is adamant that he will resist calls for allowing a full open skies situation to develop.

His main opponent appears to be Trade and Tourism Minister, Mike Moore, who manifests enthusiasm for unrestricted competition if it brings the tourists in. Both are forceful and influential ministers and agree on the dictum that trade follows the airline routes.

Diversity probably accounts for a certain ‘flexibility’ that has become apparent in the system.

Late last year, Civil Aviation issued stern edicts to Qantas and Japan Air Lines over the selling of special fares to London, matching those agreed on by Air New Zealand and British Airways.

Qantas was told it had no right to sell these fares out of Christchurch unless it added on a ‘ghost’ fare for the trip to Auckland. JAL was told bluntly to stop selling the same fares for the service via Tokyo. Both reacted angrily (gaining considerable public sympathy) and continued right on selling the fares.

Caught between two opposing trains of political thought, Civil Aviation turns a blind eye on the disobedience.

Civil Aviation Goes Commercial

As the deadline closed on this column, the government announced that the Civil Aviation Division of the Ministry of Transport would be commercialised. Whether the division becomes a corporation or a limited liability company was yet to be decided. It was already being dubbed the ‘Cadcorp’.

The division was one among a raft of Government agencies – ranging from trade and energy to housing – being shifted into a user-pay situation. While the overall policy was generally welcomed as a means to reduce and make more efficient the country’s civil service, some doubts are raised about bringing Civil Aviation into the system.

A good point is that it will get the CAD out from under the monolithic Transport Ministry, an unnatural and unwieldy alliance between road, marine and meteorological services that has existed since 1966.

But whether it is advisable for a body as much concerned with safety as in providing airports and services is another matter. Critics of the move noted that after years of agitation, the CAD was just launching into a comprehensive national air traffic services plan to update the ancient and inadequate radar and communications systems. Total cost, mainly on equipment, was expected to pass $90 million by 1990.

This will go ahead, but if the cash has to be generated solely by commercial means, it could threaten delays and adjustments to a tightly synchronised plan. On the other hand, it could speed up the programme if the division is allowed to borrow on the open market.

Critics also pointed to the British experience with the formation in 1972 of a similarly structured Civil Aviation Administration and the big increases in airways and airport dues that followed.

Before the announcements, the CAD was already moving significantly towards a commercial footing. Head office was put ting pressure on joint ownership airports {most are owned by the CAD and local authority) to form themselves into companies and many· services provided by the division were costed to a user-pay formula.

Unlike many fellow government agencies, CAD already has a reputation for operating with a very lean staff – so lean that at times its functioning is impaired.

One objection is that the timing for the change is unfortunate.

The necessity to recoup totally will. I fall especially hard on general aviation companies, particularly the air ag operators who are reeling under the worst farming slump in 50 years {one well-established company, Midland Aviation has just gone into receivership owing $500,000 and others are rumoured to follow).

An Ansett/Newmans Link?

Government legislation that could allow unlimited overseas shareholding in New Zealand domestic airlines was introduced by Parliament in late April.

The immediate reaction of Opposition MPs was that it was introduced specifically to allow Ansett Airlines a foot in the door; a point not convincingly rejected, though the Government says the main aim was to overcome the reluctance of New Zealand companies with overseas holdings investing in airlines.

Until now, no more than 25% of overseas investment has been allowed in individual airlines. The amendment to the Air Services Licensing Act will remove this restriction. A select committee heard objections to the amendment from Air New Zealand and Mount Cook Airlines.

Ansett’s interest is in Newmans Air which has been operating in competition with Mount Cook for 18 months.

In March, Ansett’s joint managing director, Sir Peter Abeles, confirmed that the company was prepared to help Newmans expand by offering ‘everything from our expertise to our aircraft. ‘ Sir Peter, who is also TNT’s chairman, indicated the possibility of Union Steamship gaining a shareholding in Newmans as part of the deal.

Newman’s group managing director, Mr R. E. Loach, confirmed that discussions had been held with interested parties, including Ansett, for a proposed main trunk – Auckland/ Wellington/Christchurch operation. This would bring it into direct competition with Air New Zealand.

Air New Zealand’s reaction has been very positive. General manager Norman Geary {who is also executive chairman of Mount Cook) said there was not room for two major domestic airlines.

“We already have a very efficient operation and we don’t make a lot of money out of it,” he said. The scale of the domestic market could not support the investment in infrastructure required for two main trunk airlines.

Mr Geary promised to defend Air New Zealand’s business “in the most vigorous terms possible”.

Nevertheless, Ansett’s enterprise in recent times has been noted with approval by sectors within the Government, especially the lobby concerned with tourism. Of special interest is Ansett Worldwide Aviation Services – and its heavy investment in new aircraft for leasing purposes. {refer p. 24 this issue)

Newman’s hopes for main trunk services would depend on a very heavy investment for jets of about the 737 capacity, or an arrangement for leasing and ancillary services.

The airline at present flies two de Havilland Canada Dash Sevens, which will be replaced at the end of the year by three Dash Eights. They are clearly not competitive main trunk aircraft.

Mr Prebble made it clear that despite the new legislation, another barrier existed, the Overseas Investment Commission, which could still rule on the amount of overseas money going into a local company.

“I still feel we are unlikely to see a majority shareholding by overseas interests in a local airline, or even a 50-50 partnership. It would depend very much on where the money came from. I’d see no problem of a fundamentally New Zealand company operating with Ansett expertise,” he said.

Avis Buys Into Commuter Aviation

New Zealand’s biggest commuter airline, Eagle Aviation Ltd, has been sold by the NZI Financial Corporation to Avis Rent a Car. Hamilton-based Eagle will continue operating as before.

The airline operates 70 flights a day from nine airports stretching from Auckland to Nelson in the South Island. It has seven aircraft including two 18-seat Embraer Bandeirantes and a staff of 75.

NZI took over the airline when it was struggling financially and it has since been reshaped. Corporation chief general manager John Wells said the airline was not considered a core part of NZl’s business and there were indications some time ago that it would be sold.

Avis Rent a Car, Avis Car Leasing and Mutual Holdings are all owned by the Mutual Group of companies, a privately owned body that spearheaded the fly-drive concept for hire car companies in New Zealand and have pioneered tourism since the 1930s.

Neither party would disclose the purchase price of the airline.

Senior Eagle directors have acted as consultants for Mutual for several years. Mutual’s managing director, David Coxhead, described the airline as soundly structured and presenting an exciting challenge. “When the opportunity came to buy it, we grabbed it. ”

Briefs

• Hawker Sea Fury: a group of yet-to-be-identified enthusiasts has approached Civil Aviation over importing one of these impressive piston-engined aircraft from the post-war years. The aircraft was purchased in the United States and is understood to be in flying trim. Plans are to reassemble it in New Zealand in Royal Navy colours and Korean War black and white stripes. Civil Aviation sees no problem in operating the aircraft locally.

• Messerschmitt Bf. 109G: Alpine Classic Restorations has abandoned its quest to import the Spanish variant of the German fighter. National economics forced the decision, project manager Tim Wallis told ‘Wings magazine. The aircraft is to be sold in the United Kingdom, but Wallis said moves were being made to ensure that a North American Mustang imported from the US by the group would remain in New Zealand.

• Spitfire IX: Wartime ace Johnnie Houlton hopes to see the last Spit he flew in the war flying in New Zealand skies next year. Houlton, author of the recently published book ‘Spitfire Strikes’, flew the machine on the eve of D-Day and was credited with the first enemy aircraft kill of the Normandy invasion. The machine was later reconfigured as a two-seater and sold to the Irish Air Force.

In recent years it was bought and restored by two Britons and Houlton says he wept unashamedly when taken for a spin in ‘Perfect Lady’ during a 1984 visit to Britain. Houlton was credited with nine kills and several problems in this and other Spitfires.

One of the owners, Nick Grace, has arranged for ‘Perfect Lady’ to be shipped out for the RNZAF’s 50th anniversary celebrations beginning on April 1, 1987. The problem is that it will have to be returned home inside a Hercules to meet a tight commitment in Britain. Talks are continuing with the RNZAF and the RAF.

• Lancaster: the sad tale of a race against time and elements to preserve one of the few left. The Lane’ has been sitting out in the open for 24 years at Auckland’s financially troubled Museum of Technology and Transport. The Pathfinders’ Association and a restoration group are working to overcome problems of corrosion and to raise cash for a building to house the machine. The Merlins have been cranked into life, but so far the money for a building is well short of target.

• A decision on Air New Zealand’s sixth Boeing 747 is on hold while the airline evaluates both the choice of the Boeing 747-400 series and the choice of a powerplant. Under scrutiny are General Electric’s CF6-80C2 and Rolls Royce’s RB211525D4D.