Is Air New Zealand crapping on New Zealand?

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Awrrr
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#1982908 25-Mar-2018 17:01

Putting aside for the moment any bashing of Air NZ, is there in fact a realistic possibility that other, smaller airlines could be brought in to fill the gaps, as Taupo has apparently done with Air Chathams? I think I saw somewhere that Taupo is guaranteeing a certain number of seats on every flight, but hasn't actually needed to deliver on that so far. Could or would Air NZ help with this, maybe as a way of making up for some of the bad publicity they have had?

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MikeB4

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#1982913 25-Mar-2018 17:19

I am sure if one of the other airlines see a commercial opportunity they will take advantage of it. That of course is entirely their decision.

Here is a crazy notion, lets give peace a chance.

sbiddle

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#1982950 25-Mar-2018 17:43

MikeB4: I am sure if one of the other airlines see a commercial opportunity they will take advantage of it. That of course is entirely their decision.

And that really sums up the whole situation in a nutshell.

It's very clear that the Air NZ cost base is significantly higher than other operators, which comes from various things - their fleet, their crew costs, the costs of establishing a region and quite simply the fact they're a larger company.

Others such as Chathams and Sounds Air also have a different fare structure - rather than offering cheaper lead in fares like Air NZ (most of which are at a loss) they tend to average things out a little better.

afe66

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#1982965 25-Mar-2018 18:36

As someone from the provinces I'd glad for my Koru membership as delays seem to happen more often.

Having said that I'm flying to UK with anz singapore airlines later in year.

Tinkerisk

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#1983001 25-Mar-2018 19:35

I'm curious how an A350 in ANZ colours will look like.

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sbiddle

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#1983007 25-Mar-2018 20:02

Tinkerisk:

I'm curious how an A350 in ANZ colours will look like.

We will probably know soon! I too expect them to opt for the A350 over the 777X for the 777 fleet replacement.

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hairy1

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#1983026 25-Mar-2018 20:41

sbiddle:

Tinkerisk:

I'm curious how an A350 in ANZ colours will look like.

We will probably know soon! I too expect them to opt for the A350 over the 777X for the 777 fleet replacement.

The 777-200 replacement announcement is still some time off. The RFP is not due to be issued until later this year.

My views (except when I am looking out their windows) are not those of my employer.

Tinkerisk

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#1983032 25-Mar-2018 20:52

hairy1:

The 777-200 replacement announcement is still some time off. The RFP is not due to be issued until later this year.

It's completely understandable since they have to decide about their technical fleet strategics as well.

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amiga500

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#1983617 26-Mar-2018 16:31

This is a pilot review of the PC12 operated by Sounds Air, overall a very good plane. It has a surprisingly low approach speed. Don't know what the glide speed would be if the engine or fuel system quit though. Flying over water or mountain terrain I'd be happier in an ATR 72 or Q300. Two engines are nice....

http://philip.greenspun.com/flying/pc-12/review

mattwnz

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#1983683 26-Mar-2018 17:44

sbiddle:

MikeB4: I am sure if one of the other airlines see a commercial opportunity they will take advantage of it. That of course is entirely their decision.

And that really sums up the whole situation in a nutshell.

It's very clear that the Air NZ cost base is significantly higher than other operators, which comes from various things - their fleet, their crew costs, the costs of establishing a region and quite simply the fact they're a larger company.

Usually you would think that a larger company can get better economies of scale, than smaller ones.

Usually when an essential service isn't commercially viable to be run privately, the government will need to step in to provide that service. The problem is that the government have previously sold off government run organsiations to commercial businesses . The big cost to tax payers, is when the government need to buy the essential services or infrastructure back. eg Labour buying back the rail services. Potentially I think we could be heading the same way with insurance in the future again, as I know several people who have had huge trouble getting full insurance on houses in certain areas which are in earthquake or 1:100 year flood areas. So I think we need a new government run insurance scheme, otherwise I think a lot of people are not going to be fully insured in national disasters in the future..

IMO, NZ taxpayers helped bail out Air NZ several after 9/11, so I think there needs to be some loyality shown to NZers.

kryptonjohn

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#1983686 26-Mar-2018 17:56

IMHO that loyalty can best be repaid in dividends and capital value growth. You could say it's been fully repaid already.

I'm sick of the Kapiti mayor's bleating. Why can't they just drive to Wellington airport? You know, like say, the 60,000 residents of Rodney district who have to drive all the way to Mangere? What's so special about Kapiti that they get to have a subsidised airport?

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mattwnz

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#1983711 26-Mar-2018 18:23

kryptonjohn:

IMHO that loyalty can best be repaid in dividends and capital value growth. You could say it's been fully repaid already.

To a degree, but do airline shares usually do that well? I am not sure how well taxpayers have done out of the deal. There was far more to the government investing in Air NZ when they were bailed out after 9/11, and I don't think the returns they would make had much to do with the decision at all. It was always about not leaving NZers and tourists, without an airline to use, as an airline is essential to the NZ economy. So the servicing of routes is important. But IMO, Kapti is so close to Wellington, esp with transmission gully going in, that I don't think it needs servicing.

kryptonjohn

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#1983727 26-Mar-2018 18:59

mattwnz:

kryptonjohn:

IMHO that loyalty can best be repaid in dividends and capital value growth. You could say it's been fully repaid already.

To a degree, but do airline shares usually do that well? I am not sure how well taxpayers have done out of the deal. There was far more to the government investing in Air NZ when they were bailed out after 9/11, and I don't think the returns they would make had much to do with the decision at all. It was always about not leaving NZers and tourists, without an airline to use, as an airline is essential to the NZ economy. So the servicing of routes is important. But IMO, Kapti is so close to Wellington, esp with transmission gully going in, that I don't think it needs servicing.

From http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11508152

What has the Crown received in return for its $1035 million Air NZ investment?

• It has collected total dividends of $765 million.

• It received $365 million for the sale of 221.3 million shares in November 2013 which reduced its shareholding from 73.2 per cent to 53.1 per cent.

Thus, the Crown has received a cash return of $1130 million for its $1035 million investment. In addition, its remaining 582.9 million Air NZ shares were worth $1446 million at Thursday's closing price of $2.48 a share.

kryptonjohn

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#1983731 26-Mar-2018 19:03

Remember also it wasn't 9/11 that nailed AirNZ in 2001 - it was their disastrous 100% investment in Ansett.

Aredwood

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#1987888 3-Apr-2018 21:05

mattwnz:

But IMO, Kapti is so close to Wellington, esp with transmission gully going in, that I don't think it needs servicing.

Surprised that this hasn't been mentioned earlier. As the new motorway will be the equivalent of moving Wellington and Kapiti airports closer together. So not many people would have been willing to pay extra to fly out of Kapiti Vs Wellington.

And some of the people who currently fly with Airnz from Kapiti, will still fly with Airnz from Wellington.

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