• What Matters to our “National” Airline – Profits or Customers?

    Reports that Air New Zealand have been charging Kiwis twice as much for domestic flights out of Auckland as they charge Australians will come as no surprise to those in the provinces who are sadly all too familiar with the priority accorded by our supposedly “national carrier” to chasing the dollar rather than meeting its “national” responsibilities.

    There was a time when Whakatane and other regional centres had the benefit of several flights a day to and from Auckland.  But a year or two ago, those flights were ended.  It wasn’t that they had not been well patronised; the 20-seater planes were almost always full, so the service comfortably paid its way.

    The problem was that filling a 20-seater was not as profitable as filling a 50-seater, and there was not enough demand to warrant using the larger plane.  So, the service was cancelled, leaving Whakatane and other similarly placed towns in rural New Zealand deprived of an essential service.

    In the case of Whakatane, a small private operator, Air Chathams, stepped into the breach, and – within its limitations – has made a creditable job of running the replacement service.  But, far from welcoming this development, Air New Zealand showed no willingness to cooperate with the new provider so as to minimise the loss to its former customers.

    Those customers are left with a number of irritations.  There is, for example, no joint booking, so that – to travel from Whakatane to Wellington, a passenger must book first a flight to Auckland with Air Chathams and then make a separate booking with Air New Zealand for the flight from Auckland to Welliington.

    There has been little attempt (from Air New Zealand, at least) to co-ordinate timetables to ensure that connecting flights are scheduled appropriately.  And, for passengers who have taken the trouble to join Air New Zealand’s Koru Club, a passenger returning from Wellington and arriving in Auckland (and perhaps having to wait for the Air Chathams flight to Whakatane) will find that access to the Koru Lounge is barred because the passenger does not have a ticket for an onward Air New Zealand flight.

    All this is, sadly, evidence of Air New Zealand’s cavalier attitude to claiming the privilege of being regarded as our “national” carrier (though they are quick to expect loyalty from Kiwis when it comes to international travel).  How and why did this sad state of affairs arise?

    Air New Zealand is of course owned by the government and the annual profit they returned to their principal shareholder was no doubt of great value to a government that was obsessed with showing its financial accounts in a favourable light.   That is why it was not enough that the Whakatane service should show a profit – the profit had to be a humungous profit, so that it earned plaudits from the Minister of Finance and therefore bonuses for the senior executives.

    Since a full 20-seater plane, while financially viable, is not as profitable as a 50-seater – and services of this kind dragged down the average profit on capital employed – the Whakatane service (however valuable it was to Air New Zealand’s customers), and others like it, had to go – a classic case of profits being put ahead of the customers’ interests.

    The consequences of these decisions are far-reaching.  A town like Whakatane becomes a less attractive place to live and work in the absence of a fully functioning air travel service.  As Shane Jones, the Minister overseeing the new Provincial Growth Fund, has pointed out, the withdrawal of services from regional centres across the country runs counter to the policy direction the new government wishes to take.  If matters remain as they are, the handicap represented by the Air New Zealand withdrawal of services will remain and will hamper the regions in their drive to build their local economies.

    Fortunately, the remedy lies in the Minister’s hands.  He can, as the representative of Air New Zealand’s principal shareholder, make it clear that a bumper profit is not the only criterion of success that the government wishes to see.  He can instruct that the airline must pay more attention to other goals, and particularly to ensuring that our “national” carrier is national at home as well as abroad, so that significant parts of the country are not marooned as a result of being denied the services that are essential to their prosperity and well-being.

    Bryan Gould

    20 March 2018

3 Comments

  1. Exkiwiforces says: March 20, 2018 at 1:27 amReply

    Bryan,

    One thing you forgot to mention about Air Chathams is that on the weekends you can fly from Auckland to Whakatane on a DC- 3 and the only other place you can do that is in Canada with Buffalo Airways. A lot of plane watchers etc are make the trip to NZ to fly in DC-3 and some are even do the Helicopter flight to White Island a bit of win win for the local tourist industry.

    Anyway on a more of sporting note aka Australian Rugby, do u read the Australian newspaper by chance as Alan Jones has a opinion piece every Friday?

    • Bryan Gould says: March 21, 2018 at 12:06 amReply

      Good point – the DC3 flight has proved very popular. And, no, I hadn’t aught up with Alan Jones’ column.

      • Exkiwiforces says: March 21, 2018 at 2:53 amReply

        Hi Bryan, I knew you were a rugby nut from way back and I wasn’t sure if you have seen Jonesy weekly column as he rattling a few cages of over here atm. Mark Ella does a Saturday column in the Oz weekend edition as well, but as my dad is a expat Aussie (another rugby and cricket tragic) in Christchurch. He is good mates of Bruce and Robbie Deans though dads work and dad has mentioned a few stories when Robbie was the coach and it no wonder the ARU is a shit fight.

        Had a mate and my current CO ( Ex- saffie) from work who was trying to get me involved in RAAF rugby for last 20yrs, grassroots here in Darwin and down in Canberra. But with ARU treating its grassroots with disdain and the way they treated WA rugby/ Western Force was disgusting. I feel if I were get involved I’m just wasting my time and energy as you are battling to get ARU support and bloody damm Sydney/ Brisbane Maffia which is really the root cause of the ARU pasts and current problems.

        Sorry to hijack this thread.

        Getting back to local airline/ tourism issues there has been interesting discussions over at the Wings over New Zealand forum site and another blog site called 3rd Level Airlines in New Zealand. I know during the last coal boom the mums side of family was looking at restarting the old family coal mine in Blackball. I said to dad with his tourism background, if the mine goes ahead we should look at running a couple of old AB’s Locomotives (The Coast is old AB country) from Hokie to Westport with a DC- 3 correction from CHCH/ Queenstown under VFR rules to Hokie and Ex Westport to Wellington under VFR rules via Omaka to connect with. the Picton Ferries to Wellington. He came back after making some inquiries and he said the market is there for vintage historic style travelling in NZ.