New Zealand News

Brierley and the airline were at pains to establish an air of prosperity and stability. Airline chairman, Mr Bob Matthew predicted a 32% profit increase in the present year (to $NZ95. 8m) followed by a further rise the following year. Brierley and Qantas meanwhile both undertook not to allow their shareholdings in the airline to drop below 15% of the total (Qantas has a 19. 9% shareholding). The public float was open only to New Zealand citizens, in order to protect the company’s bilateral landing agreements.

Stocks a Good Buy

So for the New Zealand investor, the airline stocks look a good buy. With a predicted 15% on market value, each $NZ2. 40 can be expected to yield between 30 and 40 cents.

However, some cautions were being sounded. One broker, pointing to the notoriously cyclical nature of airline fortunes noted that while the company predicted increasing profits two years ahead, the reality had been decreasing profits for the past four years. There was also the fickle nature of currency movements- the airline’s pretax profit could change by $NZ4m for every one cent movement in the US/NZ exchange rate.

The airline based its projections on passenger loadings of 69% (up 1. 3% on last year) and a stable price for fuel. It was also noted that financing arrangements had yet to be announced for some capital items of expenditure -747-400s – and that the company might be tempted to increase its capital by further share floats. resulting in a possible devaluation of existing stocks. This was firmly rejected by the airline.

So the first major float on the local market since the 1987 crash and the first major airline float yet, got underway and was expected to be oversubscribed. Its acceptance would be a measure of the country’s economy and the airline business in general, said the chairman.

Ansett Looks at International Jets

Ansett New Zealand, with the first two of its British Aerospace 146 jets in service in August and all eight on line for delivery this year, is looking at aircraft for the proposed international service. Spokesman, Mr Brian Lockstone, confirmed that the company was interested in two machines, the Boeing 767-300ER and the A300-600R Airbus. Both aircraft would be available new through the Ansett group’s international leasing arm, Ansett Worldwide Aviation Services, about mid 1990.

The New Zealand company has been examining likely routes- North America outside the Air NZ/Qantas patch of Los Angeles and to South East Asia. It has also begun extension work at its Auckland and Christchurch terminals, involving more aerobrid- ges and the construction of customs sterile areas. It has also taken an option on more Christchurch land for an international aircraft engineering base.

An application for an international licence by Ansett International NZ was rejected earlier this year, but is expected to be granted after the company presents a detailed case soon.

Spit’s Problem Was Fuel

Supermarine Spitfire MkXVI (ZK-XVI) which made a crash landing in a Hawkes Bay cow paddock earlier this year was starved of fuel, according to the official report of the air accidents investigation office. The report cites a series of problems with juggling fuel supplies between the aircraft’s four tanks as the cause of the accident.

According to investigators, once fuel in the main fuselage tanks dropped below a certain level, fuel was supposed to be transferred to them from the wing tanks. On this flight, one fuel transfer was made from wing to main tanks, but a later one was overlooked. Just before the incident, the pilot increased engine power, but the engine backfired and diagnosing engine trouble the pilot throttled back. The report noted that high engine revs were needed to make the fuel transfer and with low revs, attempts to make the transfer failed. The engine cut out forcing the pilot, Mr Tim Wallis, to put down in the paddock.

Commenting on the pilot’s performance, the report said he had not realised that the slow fuel transfer was due to low engine power settings. While Mr Wallis had more than 10,000 hours fly- ing experience, he had only flown the Spitfire for three hours before the accident. Mr Wallis, the owner of the Spit’, heads the South Island aviation company Alpine Deer Group. The aircraft is being repaired to flying condition.

Air Nz’s $nz72M Profit

A month before its public float, the new look Air New Zealand delivered its annual report. The bottom line profit of $NZ72. 86m was marginally up on the previous year’s $NZ68. 77m.

The airline’s gross revenue totalled $NZ1,720m, up 10. 8%, while the pretax operating profit (excluding the surplus $NZ13. 4m from the disposal of assets) was $NZ82m, a nearly 20% improvement on the $NZ68. 7m of the previous year. The airline paid $NZ13. 8m tax in the year, compared with $NZ8. 5min the previous year.

Overall, the report was a blander document than those prepared in previous years under the former general manager and board member, Norman Geary. Absent were heated warnings about the dangers of rampant deregulation and looming costs, replaced (no doubt with a weather eye on the coming float) with a rosy air of optimism and a kind of verbal motif the company calls its ‘Mission for the Future’. Only briefly alluding to Ansett NZ’s plans for international flying, the report believed the designation of a single, New Zealand owned, international carrier will, in both the short and longer term, make the greatest positive contribution to the development and expansion of New Zealand’s tourism industry. Accordingly the company continues to work closely with all levels of Government on this issue. ” The airline also announ- ced its ambitious target of achieving an 80% growth in inbound tourist revenues over the next five years.

Footnote: The Mission for the Future reiterates the airline’s place as the designated international carrier and says the primary market focus is commercial and leisure travellers within the Pacific rim. It will provide the highest level of services and continue to grow by developing bilateral access rights and achieving satisfactory profit levels.

Convair Crash a Mystery

Mystery surrounds the fatal crash of one of two Convair CV-580 turboprop freighters imported by the new company, Air Freight New Zealand (refer p. 111, July ’89 AA).

The aircraft was cleared for takeoff at Auckland on a late night flight to Wellington on July 31. The machine never made an appearance on the airport radar and the tower notified fire services of its disappearance. A brief search found the aircraft had plunged into the Manukau Harbour, only 75m off the end of the runway. All three crew were dead.

Both the cockpit voice recorder and the flight data recorder were recovered over the next few days. The 30 minute tape from the CVR had unfortunately stopped short of the crucial final seconds of the flight, yielding nothing. The data recorder, an old type which used a metal foil drum, proved to be unserviceable.

Chief Inspector of Air Accidents, Mr Ron Chippindale, predicted a long and difficult investigation. Captain of the aircraft, Peter Hadlow Johnson, 41, was known in the industry as an experienced and particularly good pilot. One of the two copilots was a young woman, Kirsty Kennedy, on her first ‘big aircraft’ crewing after years learning the business on third level aircraft.

Alarming Spate of Accidents

An alarming spate of fatal aircraft crashes has prompted a searching examination of the diminishing regulatory framework and the manpower involved in monitoring safety standards.

The Convair accident fell within an eight day stretch which saw 18 people die in four separate air accidents. The worst of these, on August 8, happened when a Britten-Norman Islander on a tourist flight flew (for no easily apparent reason) into a mountain cliff face near Mt Aspiring. The impact killed the ten occupants and set off an avalanche which buried the machine and bodies.

At the end of August the nine months toll stood at 33 deaths in 12 accidents; well past the yearly average of 25 deaths.

So are standards slipping, corners being cut by rapacious operators squeezed by the deregulated environment? A few days after the Islander crash an internal report written by the director of the Civil Aviation Division, Air Commodore Stuart McIntyre, was leaked to the press. It noted that staff in the division had been reduced by 39% over the past year and that there was now only one airline inspector in the whole country to monitor third level airline operators where previously there had been three. This single inspector had to keep an eye on some 50 operators including many flying scheduled services.

The drastic wind down in staff owes everything to restructuring following the so-called Swedavia-McGregor report which (apart from redefining the resources to go into the civil aviation authorities) advised that the primary responsibility for safety should rest with the operators, with the authority having less of a policing role.

The debate will continue for a long time. Critics pointed out that the US Federal Aviation Administration had been moving the same way until about five years ago when an upsurge in accidents forced it into a sharp U-turn and more of a cop-on-thebeat approach. Air transport consultant, Mr Michael Murray (a partner in the McGregor Co side of the report) claimed that US experience indicated other factors were largely responsible for accidents. He added however, that while the report recommended the staff reduction take place over three years, it had in fact been achieved much quicker.

Grounded After Spot Checks

Following the outcry, beleaguered Civil Aviation Minister, Mr Bill Jeffries ordered ‘spot checks’ on GA operators. As a result a third level operator ‘voluntarily’ suspended flights for a week and six aircraft owned by other operators were grounded. Faults. which showed up included inadequate checks on pilot competence and maintenance deficiencies, including manuals not being followed and inadequate internal control and records. The Minister also promised to boost staff members in the Civil Aviation Division by however many were needed to ensure aircraft safety.

Aviation Psychology Course

Massey University (centred in the North Island city of Palmerston North) which last year became involved in pilot training is now providing a paper on aviation psychology. The paper, for full-time students, considers flight fatigue, flight deck operations, human error and pilot judgement.

Massey Aviation Institute was established two years ago to graduate pilots with both the New Zealand and Australian CPL, with class 1 instrument and multi ratings. The course was prompted by Jim Sparks of Cessnock’s Civil Air Training Academy.

At present 28 students enrolled full-time on the flying course are studying the paper. However, it was planned to make the paper available extramurally in 1990. Dr Ross St George, psychology lecturer at the university, noted that the paper, following !CAO recommendations to include flight safety in all pilot training programmes, was aimed at alerting pilots to the host of human factors affecting the operation of aircraft. He identified the main cause of some 70% of aviation accidents as human error.

The Dispute Continues

A claim in this column that the Airways Corporation had been forced to ‘eat humble pie’ in its ongoing row with operators over a new system of airways charges has been strongly rejected by the corporation’s manager airport services, Mr John Mooney.

Mr Mooney said that since last year the Corporation had been planning a revision of charges introduced in July 1988. It recognised the first attempt would not be a final solution and invited proposals from the industry. At the end of last April agreement was reached with representatives of the aviation industry, after compromises on both sides and this was published. However, the aviation industry withdrew from completing the agreement when major airlines initiated judicial review proceedings in the High Court. With these proceedings now withdrawn, the Corporation hoped that the industry would return to the position as at the end of April.

Information coming to the writer disputes Mr Mooney’s version of events. Mr Dennis Thompson, chairman of the Aviation Industry Association’s air transport division, told Australian Aviation that there were still six outstanding matters to be resolved in the scale of airways charges and (as at September 12) most operators were still ignoring Corporation charges and paying an amount they believed fair and equitable (about 20% of the demand). Mr Thompson said the relationship between the Corporation and industry was still “extremely sour”.

Mr Mooney said there was no question of Air New Zealand asking the Corporation to defer acceptance of the new charges, as suggested in the column. “It was outrageous”, he said, “to quote a source’s claim that Air New Zealand had been over-billed by as much as $NZ10m by the Corporation. While the invoicing contained an unacceptably high error rate, that situation had now been corrected. ”

Briefs

• Air New Zealand’s bid for a share in the Chilean carrier, Lan Chile, appears to have failed. The Chilean Government announced that the preferred bidder, among three, was a local company called lcarosan which has an association with SAS. The Air New Zealand bid was the lowest. However, the Chilean Government still had to make a firm decision and this was dependent on proof of cash availability.

• Air New Zealand celebrated 50 years of flying on August 28. On the same day in 1939, a Short S. 30 Empire class flying boat landed on the Waitemata Harbour after a 12. day flight from Britain. It was the then Tasman Empire Airways Limited’s (TEAL) first aircraft, a 19 seater that could fly the Tasman in 12 hours. The arrival of the aircraft, named Aotearoa, completed a visionary exercise in bringing about an unbroken, Commonwealth air link. The flying boat began regular trans-Tasman flights on April 30, 1940.

• New Zealand airline pilots have stated their support for the striking Australian pilots. Any attempt to force the New Zealand pilots to fly services in Australia would be met with “the utmost resistance and hostility”, said the president of the NZ Airline Pilots Association, Capt Peter Hensby-Bennett.