Is Air New Zealand crapping on New Zealand?

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Rikkitic

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#231956 22-Mar-2018 12:44

So Shane Jones has been in the news for his attacks on Air NZ management. Personally I agree with him 100% but I would be interested to know what others think. My own experiences go back several years, thus through other directors, so the problem (if any) is cultural, not just down to an individual.

When I used to take Air NZ international flights, I found the service exemplary. I imagine it still is. All those awards must come from somewhere. But the ugly truth is now emerging: Air NZ pays for its excellent international services by ripping off its domestic customers.

Is this true? I don’t know. I live in Hastings. Our regional airport is in Napier. Years ago I used to commute between Europe and New Zealand every year. Air New Zealand was the only service, but their monopoly fares from Auckland were eye-watering, so I took the bus instead. I wasn’t in a hurry.

Then Origin Pacific started competing flights. Air NZ dropped their fares to undercut Origin Pacific until it went broke, then the fares shot up again. Until recently, the one-hour flight to Auckland cost nearly as much as flying to Sydney.

Recently was when Jetstar brought in a competing service, and now we have occasional $69 flights to Wellington during the week, although Air NZ (and Jetstar) still rips us off on weekends.

In the meantime, as reported in the media, Air NZ has been closing the domestic services it has squeezed dry, leaving many regions without any service at all. Whatever happened to NAC?

I have had more than one bad experience with Air NZ and am no longer a fan (as I once was), but that is just my opinion. What do others think? Are we being ripped off by the airline that we supposedly own a majority share of? Is this the way our national carrier should behave towards its own citizens? Or is it just all about profit, and damn any sense of obligation to the taxpayers who once rescued it from bankruptcy?

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#1981441 22-Mar-2018 12:44

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MikeB4

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#1981443 22-Mar-2018 12:47

In short no. AirNZ is in business to make a profit and return those profits to the shareholders, it is not a social service.

Linux

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#1981444 22-Mar-2018 12:48

Last time I checked Air NZ was not a charity

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trig42

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#1981449 22-Mar-2018 13:01

If they charged what the flights actually cost (plus a margin - they are allowed, and in fact, expected, to make a profit), and people think they are too expensive and catch the Bus, can Air New Zealand be blamed for not operating these routes?

I saw yesterday that the two routes Chatham Air has started flying (Whakatane and Whanganui) are only operating at about 60-70%. I wonder if that is enough to cover their costs? Do they have to put up prices or cut services? You can be sure they cannot afford to keep operating at a loss.

If the regional routes were viable, someone else would step in. I don't see a queue of airlines lining up to fly to Kaitaia unfortunately.

Linuxluver

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#1981450 22-Mar-2018 13:01

Rikkitic:

So Shane Jones has been in the news for his attacks on Air NZ management. Personally I agree with him 100% but I would be interested to know what others think. My own experiences go back several years, thus through other directors, so the problem (if any) is cultural, not just down to an individual.

When I used to take Air NZ international flights, I found the service exemplary. I imagine it still is. All those awards must come from somewhere. But the ugly truth is now emerging: Air NZ pays for its excellent international services by ripping off its domestic customers.

Is this true? I don’t know. I live in Hastings. Our regional airport is in Napier. Years ago I used to commute between Europe and New Zealand every year. Air New Zealand was the only service, but their monopoly fares from Auckland were eye-watering, so I took the bus instead. I wasn’t in a hurry.

Then Origin Pacific started competing flights. Air NZ dropped their fares to undercut Origin Pacific until it went broke, then the fares shot up again. Until recently, the one-hour flight to Auckland cost nearly as much as flying to Sydney.

Recently was when Jetstar brought in a competing service, and now we have occasional $69 flights to Wellington during the week, although Air NZ (and Jetstar) still rips us off on weekends.

In the meantime, as reported in the media, Air NZ has been closing the domestic services it has squeezed dry, leaving many regions without any service at all. Whatever happened to NAC?

I have had more than one bad experience with Air NZ and am no longer a fan (as I once was), but that is just my opinion. What do others think? Are we being ripped off by the airline that we supposedly own a majority share of? Is this the way our national carrier should behave towards its own citizens? Or is it just all about profit, and damn any sense of obligation to the taxpayers who once rescued it from bankruptcy?

No.

Shane Jones is just trying to get some cut through. Labour was better off the day after he left.

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cleggy2

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#1981454 22-Mar-2018 13:09

I live in Invercargill and air nz are there only air carrier. I fully understand that we pay more and subsidise other centres where air nz have competition. I have no problem with it at all. That's how business works. I happily fly out of qtown or dunedin if need be.

scuwp

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#1981455 22-Mar-2018 13:09

No. They are a business and need to be left to run as such. Government interference forcing uneconomic routes will quickly see the airline bankrupt. I do feel sorry for the small towns left out but it is simply an economic reality.

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stinger

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#1981457 22-Mar-2018 13:12

MikeB4:

In short no. AirNZ is in business to make a profit and return those profits to the shareholders, it is not a social service.

Totally agree with this. The same thing happens in Australia with remote airports with only one carrier servicing it, and I suspect happens in most countries.

vexxxboy

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#1981458 22-Mar-2018 13:15

sorry but it is all about profit , it has to make a profit to fulfill it's obligations to the government .

Common sense is not as common as you think.

tdgeek

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#1981462 22-Mar-2018 13:17

We don't want more Government control. However, I'd support the Government owning and running power generation and billing. Ticket clippers everywhere there

MikeAqua

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#1981463 22-Mar-2018 13:18

I gotten used to paying more for regional flights. What really annoys me is the lower standard of food service in regional koru lounges at the main airports. Pay more. Get less. First world problem but it irritates me.

Mike

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#1981464 22-Mar-2018 13:18

Rikkitic:

... Until recently, the one-hour flight to Auckland cost nearly as much as flying to Sydney.

Recently was when Jetstar brought in a competing service, and now we have occasional $69 flights to Wellington during the week, although Air NZ (and Jetstar) still rips us off on weekends. ...

The last time that I flew by Air NZ Napier - Auckland return (on a week day) the same-day return fare was $800.

That is price gouging by any definition.

Sideface

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#1981470 22-Mar-2018 13:26

Sideface:

Rikkitic:

... Until recently, the one-hour flight to Auckland cost nearly as much as flying to Sydney.

Recently was when Jetstar brought in a competing service, and now we have occasional $69 flights to Wellington during the week, although Air NZ (and Jetstar) still rips us off on weekends. ...

The last time that I flew by Air NZ Napier - Auckland return (on a week day) the same-day return fare was $800.

That is price gouging by any definition.

@Sideface booked a ticket last night NPE - AKL $39 on Jetstar weekday

Linux

JimmyH

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#1981472 22-Mar-2018 13:37

Rikkitic:

I have had more than one bad experience with Air NZ and am no longer a fan (as I once was), but that is just my opinion. What do others think? Are we being ripped off by the airline that we supposedly own a majority share of? Is this the way our national carrier should behave towards its own citizens? Or is it just all about profit, and damn any sense of obligation to the taxpayers who once rescued it from bankruptcy?

Firstly, as others have observed, Air NZ isn't a charity. It's Board has a legal responsibility to run the business in the interests of the Company's shareholders, which include the Crown.

Secondly, if the Company is abusing monopoly power then this is a matter for the Commerce Commission, not a random politician trying to score cheap points.

Thirdly, your post isn't internally consistent. It's not rational to accuse them of gouging (which I understand to mean making excessive profits by pricing on regional routes at a level much higher than reasonable or fair given costs of provision etc) and to slam them for closing regional routes because they are losing money on them. They can either be making excessive profits on a route (in which case they will presumably continue to operate on it) or losing money on a route (in which case they will presumably close it). They can't simultaneously be doing both.

Fourthly, it's not accurate to accuse the Company of having no "sense of obligation to the taxpayers who once rescued it from bankruptcy". It does have an obligation to taxpayers, and others who have invested in it, namely to reward them by making them a good return on their investment.

MikeAqua

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#1981478 22-Mar-2018 13:44

Linux:

@Sideface booked a ticket last night NPE - AKL $39 on Jetstar weekday

But will you get there? That's the punt with JetStar.

Mike

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