New Zealand News

It could be argued the merger idea never really looked a goer from the New Zealand end. Whatever the benefits of size, the weight on the Australian side and the swamping affect on the home side dampened enthusiasm. Unkind speculation held that the enthusiasm evinced by the Minister of State Owned Enterprises, Richard Prebble, was really a ploy to lever up potential bids by overseas airlines for the 25% + of Air New Zea- land to be sold off to the private sector.

That may be so. But behind the scenes, a major reason why the idea was shelved was the way Air New Zealand is almost inextricably bound into the New Zealand economy, especially tourism.

Inbound tourism is the country’s second largest foreign exchange earner and by far the biggest spender in promoting (as well as earning) inbound tourism is the airline. The Government body charged with promoting tourism, the Tourist and Publicity Office last year spent a minuscule $16. 5m on promoting New Zealand overseas. Air New Zealand spent just under $50m.

Visitor arrivals in New Zealand are running at about the rate of 850,000 a year, of which Air New Zealand carries about 40%. In all, the airline’s contribution to foreign exchange generated by tourist expenditure and ticket sales in overseas countries is reckoned to be well above $1 billion.

Add to this the contribution to the domestic economy, $800min value added output, local expenditure $487m and contribution to Government revenue $163m. The company’s share of the gross domestic product amounts to 1. 6%, or 20% of the value of goods and services produced by the transport communications sector.

First Boeings in NZ?

Over the years there have been persistent rumours that a number of William Boeing’s first aircraft, Boeing 1 floatplanes, are still intact and in New Zealand.

Two Boeing 1s arrived in Auckland aboard the SS Niagara in 1918 and were delivered to the Walsh Brothers flying school at Mission Bay, then in the full flush of training wartime pilots. One of the machines was certainly the very first of the Boeing aircraft, a replica of which was made for the Boeing Museum on the shores of Lake Union.

In 1924, the Walsh flying school was sold to the Government and some of its 13 aircraft were deliberately destroyed by fire. (What else would a Government flying school do! Ed. ) Others, however, were reportedly packed in crates and stored in tunnels under Auckland’s North Head. North Head is a sizeable volcanic hill situated at the entrance to the Waitemata Harbour on the North Shore. When the Russian scare was at its height in the 1880s a large complex of tunnels and gun emplacements were mined in the hill and later expanded in World War One. It is still Defence Department land.

For reasons best known to itself – but probably because large stores of ageing and obsolete ammunition are stored there – the Government has refused to acknowledge the presence of the tunnel system. But evidence of its existence is overwhelming.

English pilot and engineer, Eric Paton, who accompanied the Boeings out from Seattle, saw the aircraft taken into North Head. Unfortunately he died in 1985, but his memoirs were taped by fellow Englishman, John Earnshaw.

Children living nearby breached the tunnel system in the 1960s and remember finding ‘floats’ which they tried to drag out to use as canoes. A Navy man got into the shafts in 1971 and recalls seeing crates.

At last the military has relented. Earnshaw, a cameraman who has been chasing the Boeing quest for years, has been told that the Army will re-excavate the tunnels for his exploration. The work was expected to begin in late May or early June.

Earnshaw plans to make a film of the work and possibly write a book and if the Boeings are found-well they will still be Government property.

Airways Body Buys Fight

The 12 month old Airways Corporation has bought itself a fight with light aircraft operators which threatens to be prolonged and bitter. It is centred on new airways charges which, say operators, would almost certainly force them all out of business.

In order to pay for navigational and airport charges, light commercial aircraft were, up until this year, charged 7% of their gross revenue on each flight. Larger domestic machines such as F27s and Boeing 737s were charged 14% and operators like aerial work companies and aero clubs were exempt.

In keeping with the user pay policy, the Airways Corporation in February announced a new scale of charges to be applied to all operators. It was an excessively complicated scale involving a base charge for each takeoff and landing, a charge formulated on the aircraft’s gross weight and a levy of 23 cents for each nautical mile. The result was a massive increase in fees for light aircraft and a sizeable reduction for bigger machines.

For instance, a Boeing 737 flying Auckland/Wellington would incur a charge of $539 compared with the former charge of $2,334. However, a ten seater aircraft on the same route would be charged more than $300 compared with the former $70.

Another example involved the cost per passenger on an IFR flight: Cessna 182, $75. 58 a seat; Navajo $66. 98 a seat; F27 Friendship, $10. 34 a seat.

The new regime, due to be introduced on March 1, so outraged smaller operators that they formed a body known simply as the Task Force, largely led by Mr Dennis Thompson, chairman of the air transport division of the Aviation Industry Association. The group put up such opposition they forced a delay and the corporation into consultation.

A much reduced scale was announced by the corporation, for introduction on July 1. But, says the Task Force, it is still far too costly and the fight will go on. Under the new scale, aircraft under 2,000kg pay $7 for each visual rules takeoff and landing, $20 for IFR takeoffs and landings 13 cents per nautical mile and a weight charge.

While Air New Zealand welcomed the system as more equitable, the Task Force has retained a Silk and plans to continue the fight. It is seeking a High Court Review, preparing a petition to Parliament and intends asking the Commerce Commission to investigate the corporation’s ‘abuse of its dominant market position. According to Dennis Thompson, the group is well funded, with almost every general aviation owner and operator a member. “The thing that really worries me is one of safety”, says Thomp- son. “At these costs, the temptation to jump into an aircraft and fly off without the benefit of civil aviation aids and control will be overwhelming. Many will be tempted to seek out their own airfields. ”

New Air NZ Head

Mr RJ (Jim) Scott has been appointed the new Chief Executive of Air New Zealand, succeeding Mr Norman Geary. He was to take up the position on June 1. Mr Scott (43) was until recently director of forest based operations for Carter Holt Harvey Limited. He had worked for that company since 1971 and was also a board member of Electricorp the agency for producing and distributing electric power.

Born in Greymouth and educated in Christchurch, Scott graduated from Canterbury University as a BSc (Hons) with a major in chemistry. He began work with Caxton Paper Mills as production manager.

Meanwhile, there was puzzlement in the airline about the absence (in mid-May) of any Government announcement about the future of managing director Geary. Mr Geary (49) had been confidently spoken of as the airline’s next board chairman, following the retirement of Mr Hugh Fletcher on June 1.

A prevailing rumour was that Mr Geary had upset the Government by his criticism of the merger idea between Air New Zealand, Qantas and Australian Airlines. Mr Geary made his opposition known largely in a speech delivered in London.

He said there were other ways to enjoy the benefits of size other than by full-scale mergers. He mentioned cross shareholdings and marketing mergers to link airlines, leaving them with their own identities.

Geary is widely considered the airline’s saviour, having turned it around from the heavy losses and post Erebus crash through the early 1980s to an almost spectacularly profitable company. To be passed over for the chairmanship, for political reasons, will create a furore within the company.

The Great Airline Sell Off

Notices of sale for a shareholding in Air New Zealand have been received from five bodies: Singapore Airlines, British Airways, Qantas, Brierley Investments and Freightways. The filing of notices, which signify an interest in buying a sizeable part of the airline, is now closed.

Meanwhile, a clear message that New Zealanders are opposed to the large-scale sell off of the airline has come through in a survey conducted for the newspaper, the National Business Review. The survey took seven public organisations either sold or in the process of being sold, partially or wholly. Air New Zea- land topped the list of bodies voters wished to remain in Government ownership-65% said keep the airline and 29% said sell. In comparison, 39% said keep the New Zealand Railways and 54% said sell.

Orion Update

Tender documents for the updating of the RNZAF’s Lockheed P-3K Orion aircraft’s acoustic and electronic surveillance equipment were released in April. The tender awards are expected by the end of this year.

Earlier this year a five member RNZAF team visited manufacturers in Britain, the US, France, Italy and Canada to evaluate possible contenders for the update.

The deputy project manager, Wing Commander Les Matthews, said one of the objects of the tour was to reinforce the requirement for New Zealand industry participation in the work. The upgrade known as RIGEL II (Rigel being the brightest star in the constellation of Orion, the hunter) is expected to be completed by the end of 1991.

Briefs

• The possibility of Australia and New Zealand combining their training of Air Force pilots was discussed in recent talks between defence officials of both countries. The two Air Forces are looking at the possibility of basic training being done in New Zealand and advanced training in Australia.

• The cyclical shortage of aircrew has again rounded up on the RNZAF. Amongst the exodus are all five members of the Services Red Checkers aerobatic team. The team flies Airtrainers and is based at Wigram. Three members of the team have left the Service and two were due to go next year. It is understood the pilots were primarily unhappy about a budget forced reduction in flying hours.

• None of the Boeing 737s flown in New Zealand by Air New Zealand and Ansett were affected by restrictions placed on some aircraft of the type as a result of the incident in which part of the fuselage of an Aloha Airlines aircraft was ripped apart. The restrictions applied only to aircraft with more than 55,000 landings.