New Zealand News

Despite the wobbles the departure sent through the industry, Ansett New Zealand is understood to be secure. Three days before his departure was announced, Keenan spoke exuberantly to Australian Aviation about the airline’s future which, he said, was right on target with early projections. The company was now providing 29% of the main trunk (Auckland/Wellington/ Christchurch) capacity and matching this in passengers and revenue. The company was in the process of taking delivery of two 737-200s, its fifth and sixth 737s, and expected to take delivery of two 500 Series 737s in the early ’90s, which would form a fleet core.

An extension of the main trunk route would go through to Dunedin about October (despite IATA conventions, Ansett had failed to negotiate interline arrangements with Air New Zealand on a Dunedin link, Keenan said), with the Dunedin terminal being built and paid for by the City Council.

Keenan was also buoyant about the possibility of Ansett New Zealand bidding for overseas rights- it nearly gained them last year when an accommodating government, tiring of a ban by Air New Zealand pilots on flying into Nadi, gave thought to an Ansett application to fly to Fiji. It fell through when Air New Zealand’s pilots lifted their ban.

The New Zealand airline argues that Ansett’s figure on its market share is inflated. Keenan insisted that it was Air New Zealand who were giving misleading figures by matching Ansett’s main trunk share with the whole of the Air New Zealand domestic system.

However, Keenan declined to reply to reputed losses of $1m to $1. 5m a month being touted in local circles. The airline has never discussed money, saying that such details are included in the parent company’s overall balance sheet – a point its competitor prefers not to raise because it too merges domestic and international earnings.

There were weeks in its first year when Ansett New Zealand had made operating profits, Keenan said.

As the year closed, Ansett New Zealand took off on a new marketing tack. Having previously nurtured an image of qualitymeals, first class travel, lavish airport facilities, etc- it introduced a July special of standby fares slashed to levels hitherto unknown in the business. The rush to buy these fares, some down to a third of normal economy, was breathtaking. Air New Zealand which had fought the war on special and low fares chose not to respond.

Emphasis on the Orient

Air New Zealand cites a downturn in traffic on US routes for its decision to refocus capacity on Orient and Tasman services.

The airline planned to reduce its New Zealand/Los Angeles services from 12 to 1 O a week, from late October. A fourth weekly 747 flight to Tokyo was planned while on the Singapore route, two 747 and one 767 flights a week were to replace the existing 747 flights, lifting capacity by 200 seats.

The airline was also considering an increase to Hong Kong services which it operates at present on a year about basis with Cathay Pacific. Other changes will include extra capacity put on for the Brisbane Expo 88 shifted to trans-Tasman links to Sydney and Melbourne.

The airline said projections showed an increased proportion of tourism coming from Asia and the Orient and it saw itself as a ‘niche market’ airline. Referring to the recent agreement allowing the company to run direct services from Sydney to Los Angeles, a spokesman said this was not on in the foreseeable future.

Airways Corporation for Sale?

The Government is considering selling its stake in the Airways Corporation- the body which handles air traffic control services, telecommunications, navigational aids, etc, and the recouping for these expenses. The announcement by the Minister of State Owned Enterprises, Richard Prebble, came only 15 months after the old Civil Aviation Division was split into two and the resulting Airways Corporation charged with earning its keep and making a profit.

The Corporation’s first annual report showed it had returned an after tax profit of $4. 2m – the previous year the old CAD had lost $5. 2m on these operations.

The Corporation also met a tax bill of $4m in its first year. Mr Prebble said the heavy capital investment programme now required by the Corporation meant the Government had to question state involvement. “We have been given indications that the private sector is interested in investing in the Corporation”.

He said that before this could happen a review of the Corporation’s position as a statutory monopoly would have to take place. He praised the Corporation’s business contract negotiations for a new air traffic control system; instead of opting for a system costing between $200m and $300m which would have taken five years to put in place, the Corporation was negotiating for “a superior system that will cost only $70m and be operating in less than three years”.

Retention Costs Rnzaf

A scheme to retain pilots for an extra year is costing the RNZAF $2,175,000. The idea of introducing a one year retention bonus of $25,000 each was announced in May as a massive haemorrhaging of Service pilots became apparent. A majority were being lured into Air New Zealand which was experiencing a more than usually severe cyclical shortage.

The Air Force announced that the bonus would be paid to pilots and navigators who made up their minds by June 30th to stay in the service for another 12 months. Under normal Service conditions, pilots who have completed a time contract after learning to fly may seek a discharge on three months’ notice. Because of previous outflows, the service has frequently in the past 12 years imposed a state of critical manning, requiring two years’ notice of departure. However, this has not stemmed the outflow because it tempted many to lodge notices of departure on the assumption that they might want to leave the Force in two years.

It is understood at least 87 to 105 operational pilots and navigators eligible sought the $25,000 bonus, among them a number of the 13 flying instructors at Wigram who were seeking a discharge. The Service only has 18 instructors and the departure of the 13 would have been crippling. The Ministry is hopeful that a pay review out before the end of the year will reduce the outflow. Meanwhile, in order to encourage those officers who prefer flying to moving into general administrative duties at about the age of 35, the Service has introduced a system allowing them to remain ‘operational’.

Could the Service get greater longevity out of female pilots? It is making no predictions though the first two women trainees passed out of Wigram’s basic training course in July and began training on more advanced aircraft at Ohakea.

Qantas Bids for Air NZ

Qantas’ chief executive, Mr John Menadue, went public in its bid for a stake in Air New Zealand when he flew into Auckland in late June. He was at pains to allay concerns expressed on this side of the Tasman. “If the Qantas bid succeeded, it was essential Air New Zealand retained its identity”, he said.

While other bids might offer for a shareholding up to 35%, Qantas would seek only 25% (leaks suggest the Government might sell off as much as 40%). Mr Menadue said both carriers were small by international standards and their combined strength would be of value in facing the US mega carriers. He emphasized the importance of joint strengths in developing the growth markets of Japan and the Orient.

Advantages from a partnership with Qantas included improved tourism marketing by airlines which at present compete for travellers who mostly visit both countries; savings by using a combined computer reservations system and greater purchasing powers and benefits from maintenance co-operation.

Referring to the now abandoned proposal for a merger of Qantas, Air New Zealand and Australian Airlines, Mr Menadue said he could understand New Zealanders being offended by a proposal which offered their government only a 10% share in the triple merger. “That has all gone out of the window now”.

A fact finding mission from British Airways, which is seeking a stake of about 35% in Air New Zealand, took place in July. This was followed by a visit from the airline’s chief executive, Sir Colin Marshall; but the airline coyly said Sir Colin’s visit was not linked with the proposed sell off.

Airport Shuttle Takes Off

You’re onto a loser, Air New Zealand was told. They’ve failed in London, New York, Los Angeles, Sydney and Melbourne.

So far, the loser, a passenger helicopter link between near central Auckland and the airline’s domestic terminal at the airport, seems to be holding up well. It began in mid-June.

The service is being run with a six-passenger Agusta 109 Mk2, owned and operated by Heli-taxis Ltd, but under contract to Air New Zealand and billed as the company’s city shuttle. Passengers are taken by mini-bus from the airlines downtown office to the Mechanics Bay helipad about 1. 5km away. The trip costs $60 either way and takes seven minutes airtime.

Predictably, though the machine is extremely quiet and tracks over motorway and industrial areas, the whingers – largely from the ultra-twee suburb of Parnell – have raised opposition. Auckland Harbour Board, the controlling authority, was examining these apparently baseless complaints. The airline runs seven services both ways daily and guarantees the aircraft’s owner a minimum profitable hourage for the year. It is banking on the low price ( a taxi charge for the same journey is $30), scenic values and time saved on an otherwise tortuous road route, as selling points.

Meanwhile, the venture has prompted interest by an interesting twosome, the country’s biggest helicopter operator, The Helicopter Line (30 aircraft) and the Railways Corporation.

Within five minutes walking distance of central Auckland lies a large area of disused railway yard. According to Nigel Ower, northern manager of The Helicopter Line, agreement exists with the Railways on establishing a service to be operated from a heliport which would be developed over a period on the Railway’s site. The operation has Civil Aviation approval, says Ower.

Ower is critical of the Air New Zealand shuttle which, he claims, is not operationally structured for long-term success. He says The Helicopter Line would use two aircraft, probably Bell 47s and maintain the airport shuttle in partnership with general tourist flying over a wide area. The heliport would be developed to a substantial structure of several storeys.

Customs Hit Skyhawk Act

The $140m upgrade of the RNZAF’s A-4 Skyhawk fleet is about five months behind schedule-largely because of a Gilbertian mess up in the procurement of parts. The programme involves rebuilding the wings, fuselage repair, engine upgrade and the replacing of 1960’s avionics with a 1990’s instrumentation package including advanced missile control and navigation systems. The project, known as ‘Kahu’ is planned to give the 22 aircraft an operational life into the next century.

One hold-up of imported parts occurred because of an apparent oversight involving the Government’s GST tax (a 10% tax similar to Britain’s VAT). Customs refused to release the goods for three weeks because the Air Force had forgotten about GST. The stalemate ended when the Government decided to pay itself the tax working through the contractor, Smiths Industries of Britain.

Another crucial shipment was held up for seven weeks by Customs because the American shipper made mistakes in the export paperwork which was not noticed until the equipment was in transit. American Customs asked New Zealand Customs to impound the packages until the matter was sorted out, and New Zealand Customs gladly obliged.

The original primary contractor for the job was the American company, Lear-Siegler, but the job was later taken over by Smiths Industries. Work is being done at Woodbourne. Despite the problems, the Air Force insists the finishing date for the last aircraft remains unchanged at October, 1989.

Briefs

• Air New Zealand has leased an 11th 737 from Royal Brunei Airways. The machine is needed because of airline plans to increase peak flights by 50 a week.

• An investigation into the loss of a Cessna Caravan off the South Island’s east coast last November during a night ferry run has developed into a public inquiry. Attorney General Geoffrey Palmer announced the inquiry, noting that he did not consider that pilot error was to blame in the accident which claimed the lives of the pilot, Brent Odering and Skyferry employee Kathy Sproul. The night-time loss at sea followed the development of an icing problem in a thunderstorm. The inquiry was to focus on the “ability of the Ministry of Transport and the Air Services Licensing Authority to regulate the safety of third level services” and follows a recommendation by the chief inspector of air accidents, Mr Ron Chippindale.

• A runway end net is being considered as a safety device for overruns at Wellington Airport. The concept is similar to nets used on some military bases. The New Zealand agents for the manufacturer say the net, positioned near the sea end of the runway can be activated from the control tower, from flat to upright in one second.