Air New Zealand pull back from the regions

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#1173518 12-Nov-2014 12:46

richrdh18: Why would anyone fly between Hamilton and Auckland? Surely its quicker to drive.

Thought the same thing. maybe a chance for kiwi rail to put on a fast train between the two cities but it's not in the governments way of thinking. They would rather put in a 8 lane highway before they would upgrade rail ..

Regards,

Old3eyes

Elpie

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#1173572 12-Nov-2014 13:41

I bet the Palmerston North acting mayor will be furious too. AirNZ cancelled the Palmerston North to Nelson service almost five years ago, despite it being profitable at the time. After four years of lobbying, they reintroduced it and in July gave assurances that the numbers stacked up so that route was back to stay. Then, without warning, they announced yesterday that its being cancelled.

The problem with people suggesting that other carriers could fill the gaps is that every time anyone tries to, AirNZ jumps in, undercuts, and puts them out of business. When there is competition, AirNZ is happy to forgo some of their profit. As soon as competition goes, fares skyrocket.

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#1173600 12-Nov-2014 14:27

old3eyes:
richrdh18: Why would anyone fly between Hamilton and Auckland? Surely its quicker to drive.

Thought the same thing. maybe a chance for kiwi rail to put on a fast train between the two cities but it's not in the governments way of thinking. They would rather put in a 8 lane highway before they would upgrade rail ..

8 lane! Maybe they could just finish the 4 lane one a bit quicker.

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#1173603 12-Nov-2014 14:30

apparently air nz were losing 1 mil a month on each of the scrapped routes!

Behodar

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#1173611 12-Nov-2014 14:46

joker97: apparently air nz were losing 1 mil a month on each of the scrapped routes!

I believe that it was total, not each.

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#1173614 12-Nov-2014 14:55

joker97: apparently air nz were losing 1 mil a month on each of the scrapped routes!

Do you think the fares on other routes will fall now?

Bwahahahaha!

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myfullflavour

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#1173621 12-Nov-2014 15:07

richrdh18: Why would anyone fly between Hamilton and Auckland? Surely its quicker to drive.

Cheaper / easier to leave the car at Hamilton Airport, catch a connecting flight to Auckland and then head internationally...

That was the only use I could see for the Hamilton/Auckland service.

kiwigander

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#1173632 12-Nov-2014 15:26

"The problem with people suggesting that other carriers could fill the gaps is that every time anyone tries to, AirNZ jumps in, undercuts, and puts them out of business. When there is competition, AirNZ is happy to forgo some of their profit. As soon as competition goes, fares skyrocket."

I've got no argument with that statement. It's not only much easier for Air NZ to fight off a minnow competitor than an Ansett or a Qantas; it's cheaper to throw a couple of B1900's at a minnow's route than to run another jet AKL-CHC. One wonders whether the B1900's are going to be kept idle but still around for a while just to scare off any potential upstarts.

The Commerce Commission needs to show some teeth.

surfisup1000

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#1173644 12-Nov-2014 15:45

It's ok to subsidise buses but not airlines?

Seems to me, the loss of flights is consigning these communities to a slow death -- although, that trend was already in place perhaps?

Young people have no real hope outside the 5 or so main centers.

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#1173649 12-Nov-2014 15:55

Elpie: The problem with people suggesting that other carriers could fill the gaps is that every time anyone tries to, AirNZ jumps in, undercuts, and puts them out of business. When there is competition, AirNZ is happy to forgo some of their profit. As soon as competition goes, fares skyrocket.

It seems to be a known tactic:

"East Coast MP Anne Tolley sought assurances from Air New Zealand that, if anyone did come in and take on the route, the airline would not behave in a predatory manner and try to run them out of town. [Whakatane Mayor Tony Bonne] said he intended to seek this assurance in writing from Air New Zealand chief executive Christopher Luxon." - Whakatane Beacon

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#1173651 12-Nov-2014 15:56

kiwigander: "The problem with people suggesting that other carriers could fill the gaps is that every time anyone tries to, AirNZ jumps in, undercuts, and puts them out of business. When there is competition, AirNZ is happy to forgo some of their profit. As soon as competition goes, fares skyrocket."

I've got no argument with that statement. It's not only much easier for Air NZ to fight off a minnow competitor than an Ansett or a Qantas; it's cheaper to throw a couple of B1900's at a minnow's route than to run another jet AKL-CHC. One wonders whether the B1900's are going to be kept idle but still around for a while just to scare off any potential upstarts.

The Commerce Commission needs to show some teeth.

They haven't killed SoundsAir, who started up a WAG/WLG route after AirNZ dropped it. But I agree going up against AirNZ is commercial suicide unless the Commerce Commission can be relied to smack down anti-competitive behaviour in a timely manner.

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#1173685 12-Nov-2014 16:19

Airlines with small aircraft are a dying breed all over the world. You just need to look at aircraft manufacturers to see this. There are no western 19 seat manufacturers and only the ATR-42 remains as a Western mid sized turbo prop being manufactured.

Certification costs have killed the small airliner industry. This is not just a problem facing New Zealand. Many other countries around the world are facing the same issues (take Tonga for example).

I see this issue only getting bigger as the stock of existing Metros, Saabs, Beeches etc. reach end of life. It is hard to see manufacturers jumping back into this space in the foreseeable future. Owning a small thin routes takes courage, money, and lots of money.

Cheers, Matt.
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#1173723 12-Nov-2014 17:28

Maybe we could use the small flying boats they use in places like Canada and the Bahamas?

Elpie

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#1173729 12-Nov-2014 17:54

Geektastic: Maybe we could use the small flying boats they use in places like Canada and the Bahamas?

Jetpacks FTW!

billbennett

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#1173734 12-Nov-2014 18:03

I've just written a piece making the comparison between Air New Zealand and the telcos having to pay $50 million a year to subsidise rural telecommunications. It'll be up on Geekzone soon, but in the meantime it's at my site:

One rule for telecoms investors, another for Air NZ

Either we decide to support the regions - and there's a good argument for that, or we don't. But taxing one industry and not another to do this doesn't make sense.

Bill Bennett www.billbennett.co.nz @billbennettnz

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