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Air New Zealand Delicate Balance  
User currently offline767er From Australia, joined Apr 2001, 1092 posts, RR: 4
Posted (14 years 5 months 4 weeks 11 hours ago) and read 1960 times:

In this mornings NZ Herald is states that the ANZ is:

'Adapting to lower demand for air travel by reducing the network to a sustainable core in the medium term'

What does this exactly mean???????


Aircraft flown:F27,Viscount. EMB120, SAAB340, ATR70, 737-200.737-300,DC8, DC10,747-100,747-200,747-300,747-400, A320, A3
36 replies: All unread, showing first 25:
User currently offlineAl From Australia, joined Jun 1999, 593 posts, RR: 2
Reply 1, posted (14 years 5 months 4 weeks 11 hours ago) and read 1849 times:

I read it as they are losing money hand over fist on the current route network and frequencies of flights, so they are aiming to turn that around to a "making money" airline in the short to medium term timeline by introducing a more acceptable and responsible schedule with less flights, staff and costs from now.
Short answer - they are taking a painful option now to make a return to profit in the medium term. Being responsible to their shareholders and ensuring some sort of future for themselves I guess is a good description.

User currently offlineJet_guy From New Zealand, joined Aug 2000, 231 posts, RR: 0
Reply 2, posted (14 years 5 months 4 weeks 11 hours ago) and read 1836 times:

I bet NZ hearld doesnt know what it means!! what with there over-rated journalistic ablilities!

Proberly just copied some media release!

Sam  Big thumbs up

User currently offlineAerorobnz From Rwanda, joined Feb 2001, 8314 posts, RR: 17
Reply 3, posted (14 years 5 months 4 weeks 10 hours ago) and read 1829 times:

It means that they are making flight schedule cuts to their network and concentrating on existing profitable routes, and reducing costs any way they possibly can to stay in business long enough for the 'medium term' to come..

User currently offlineTG992 From New Zealand, joined Jan 2001, 2910 posts, RR: 10
Reply 4, posted (14 years 5 months 4 weeks 10 hours ago) and read 1819 times:

Air NZ flying into unknown

02 December 2001

Air NZ is taking a surprisingly aggressive approach under new management, writes Terry Hall.
Air New Zealand is flying in unknown territory as it copes with a drastically altered international aviation scene in the aftermath of the New York terrorist attack and a string of other problems.

These include questions of whether its new majority shareholder, the government, will interfere with its day-to-day operations; how it will cope with the loss of Ansett which was delivering thousands of passengers each year to its international routes; how it will rebuild its reputation in Australia, a key market; and what will happen to the fractured relations with Singapore Airlines. Just months ago SIA said it wanted control of Air New Zealand, event without Ansett.

There are also issues about when it will return to profitability. Traditionally the airline makes most of its profits between December and February - so it is too soon to say. ABN Amro said last week that November loads were down by a total of 20 percent on the same month last year.

It is also understood Air New Zealand has been worried by the high level of no-shows - people who fail to turn up for flights presumably because of the terrorist attacks. On the plus side insiders say the London-Auckland flights are full. New Zealand's reputation as a safe haven - a concept promoted by the government and tourist authorities in Japan and other selected markets - seems to be having some success.

Air New Zealand, under its new management, is taking a surprisingly aggressive approach to signs Japanese tourists are staying home. It is offering discounts worth a total $5.5m off its fares from Japan, this country's second biggest tourist market.

Significantly, at the time when Qantas and other airlines are scaling back flights, Air New Zealand has increased capacity on Asian routes including Japan, Hong Kong and Taiwan due to customer demand.

The Bank of New Zealand says visitor numbers in October held up surprisingly well. While visitors from higher spending Japan and the US were down by some 19.6 percent total visitor numbers fell by just 3 percent.

Many of these people came from Australia. The BNZ noted while this would be good news for Auckland International Airport, greater numbers of Australians would not necessarily be a plus for the industry as a whole. "For airlines short haul flights are not the big dollar earners, and the high spending end of the market tends to be driven by folk from further afield."

Air New Zealand's share price has been showing remarkable resilience, with the shares trading last week at up to 11 cents above the 27c a share agreed with the government for its $585m equity injection last week.

Much of this strength was driven by the substantial fall in the international oil price. Last year's massive spike in prices was a key reason Air New Zealand and other airlines got into trouble. The return to lower prices will represent major cost savings. However analysts say this is only part of the equation.

The latest quarterly profit from the company - released before the oil price fall - showed the company operating in a positive cash flow position. However it was finding trading difficult. In the September quarter it made an operating loss of $26m up from a loss of $4m in the corresponding three months of last year. This implies it will make a substantial trading loss in the full year.

Both broker and aviation analysts welcomed the government's confirmation last Tuesday that it was committing itself to a total rescue package that could total $1.035 billion. This would include a further $150m up to June 2003 if needed "to shore up business confidence in the company".

Credit Suisse First Boston said the commitment is positive for the company "to recover from a significant deterioration in its financial position".

However many investors were unhappy at Michael Cullen's comments that the airline will remain under state control. Airlines are risky, cash hungry businesses. There are concerns the new management will not be as aggressive as might need to be when cutting jobs. Government ownership also suggests pressure could be applied to maintain unprofitable routes to minor centres where a government may feel insecure.

The government may surprise by maintaining a hands-off approach, and there has been no sign of interference in the cost cutting moves disclosed to date, including the proposed sale of the South Island ski-field operations and Jeyset, the loss making Australian travel business.

Air New Zealand's A shares slipped back to 33c on Friday morning (down 4c on the week) and the B shares to 35 (down three). This coincided with comments from ABN Amro and Credit Suisse First Boston that the share price was well ahead of their valuations.

User currently offlineMx5_boy From , joined Dec 1969, posts, RR:
Reply 5, posted (14 years 5 months 4 weeks 9 hours ago) and read 1803 times:

Will NZ leave / get booted out of 'Star"?

They only serve 4 ports that other star carriers don't serve - Apia, Rarotonga, Tonga and Papeete.



User currently offlineSkystar From Australia, joined Jan 2000, 1363 posts, RR: 2
Reply 6, posted (14 years 5 months 4 weeks 8 hours ago) and read 1787 times:

Why would that occur?



User currently offlineJet_guy From New Zealand, joined Aug 2000, 231 posts, RR: 0
Reply 7, posted (14 years 5 months 4 weeks 7 hours ago) and read 1783 times:

Thats funny mx5_boy, i thought NZ was the only STAR member serving Whakatane, Gisborne, Wellington, Dunedin, Westport, Nelson, Blenhiem. . . . . .etc etc, i must be wrong!

If you say that NZ should get kicked out of the Star alliance becasue of common destinations look at TG, and SQ!!!!


User currently offlineETA Unknown From Comoros, joined Jun 2001, 2299 posts, RR: 0
Reply 8, posted (14 years 5 months 4 weeks 7 hours ago) and read 1778 times:

Mx5_boy is just ticked off 'cause his beloved Ansett got kicked out of Star.

His messages in this forum tirelessly blame Air New Zealand for Ansett's woes. In reality, Ansett had nobody to blame but themselves.

User currently offlineMx5_boy From , joined Dec 1969, posts, RR:
Reply 9, posted (14 years 5 months 4 weeks 7 hours ago) and read 1774 times:

ETA Unknown:

Ansett has not been kicked out of Star.


I was referring to International destinations, and if you re-read my post (unless you can't read very well) I asked a question about NZ and star. I never suggested NZ should be booted out of Star.

My comments were related to the topic. NZ will now be government owned and I should imagine some cost cutting going on.



User currently offline'Longreach' From Australia, joined Jul 2001, 505 posts, RR: 0
Reply 10, posted (14 years 5 months 4 weeks 6 hours ago) and read 1758 times:

SInce when where ANZ losing money?

I have always heard people rave how they were the money making side of the two airlines combined?

Or has this loss been brought on by S11?

User currently offlineAl From Australia, joined Jun 1999, 593 posts, RR: 2
Reply 11, posted (14 years 5 months 4 weeks 6 hours ago) and read 1752 times:

ETA Unknown, I think your nick should be changed to Facts Unknown. What an absolutely absurd statement to make.
Funny you should mention Star Mx5. I had already heard a funny story (from my source inside WHQ at UA) that has come from the corridors of power of the 5 power brokers within Star itself, after some private meetings between certain Star members during last weeks Star CEO conference. The plot thickens as they say. Cheers. Al.

User currently offlineB744 From New Zealand, joined Dec 1999, 491 posts, RR: 0
Reply 12, posted (14 years 5 months 4 weeks 5 hours ago) and read 1750 times:

I'm not quite sure what they mean about 'adapting to lower demand'. Try getting a seat on one of their intl flights )pretty much anywhere) within the next 3 months...

User currently offlineAirNewZealand From New Zealand, joined Oct 2000, 2549 posts, RR: 6
Reply 13, posted (14 years 5 months 4 weeks 3 hours ago) and read 1733 times:

I agree B744,
Looking at the load factors for the next three months nearly every single INTERNATIONAL flight is going out with a full load, now how can they say they are going to cut routes??
Aussie Is especially looking good, with all flights going out full, except for Dec 14th, and Jan 10,11,12,13.

I think the press need to do some research on Load factors before going and saying such rubbish as "there pax loads are not doing too well!!"

Also, AirNZ was a money making side of AN/NZ, though AN gave alot of Pax to NZ as it has been stated. It is good that they are co-operating again, as they both need each other!! At least the press got that right.

I think you have been mis understood by some of the members on this forum! Come on Guys i think you owe this dude an apology. He said nothing about AN Aussie, but as yet again, this thread will be f****d up by people who are still angry at others...I am not relating to you Mx5_boy!!

By the way, yes you are right about them only serving those ports, but look at all the tourists they will pass onto UA, LH, SQ etc.... Everyone knows, LH got real angry at NZ as they were taking all there customers from the LAX-FRA route. Also UA got angry about NZ taking the Pax from HNL-LAX and v.v. Both settled it, though i think AirNZ is still very angry at these two carriers for doing this as they made lots of money for NZ!

Even though NZ only serves these four different ports from every one else, they are the only STAR carrier to serve, all of the Networks....
ie, Asia, Australasia, Europe, New Zealand, Pacific Islands, United Kingdom and America.
The three next closets are SQ, TG, and UA!
BMI is very similar to NZ!!


PS I hope you can understand my GRAMMAR!! LOL!! Smile Smile Smile Smile

User currently offlineAerorobnz From Rwanda, joined Feb 2001, 8314 posts, RR: 17
Reply 14, posted (14 years 5 months 4 weeks 2 hours ago) and read 1724 times:

yes NZ does have full seats, but they aren't always full on the return leg or visa versa..
just like the US was flying here full after 11/9 but we weren't flying full flights to the US.

User currently offlineAussiestu From Australia, joined Mar 2001, 780 posts, RR: 1
Reply 15, posted (14 years 5 months 4 weeks 1 hour ago) and read 1716 times:

Does anyone know what routes they are planning to drop or scale back on?????

User currently offlineB727-200 From Australia, joined Nov 1999, 1051 posts, RR: 2
Reply 16, posted (14 years 5 months 4 weeks ago) and read 1706 times:

Hey AirNewZealand.....bite me!!

Hehe  Smile

Seriously....NZ must have a lot of recoiling to do after "de-merging". Firstly, they have overstaffed areas that were grown to absorb the AN work load in a rationalised group. Secondly, they have some departments that do not exist anymore (or are a skeleton of what is required) due to moving that division's functions to Melbourne.

Add to all this the S11 effect and and it is going to be tough times for NZ. As for Star, members are added to the alliance for as much their geographical location as route structure. For this fact, I can not see Star removing NZ, especially since the other Star member in the region is very weak (on an international scene more so).

A down-turn in load factor could be an opportunity for NZ to get rid of its B762's (if it has not already done so?). These aircraft are in not much better shape than the AN ones.


User currently offlineMx5_boy From , joined Dec 1969, posts, RR:
Reply 17, posted (14 years 5 months 3 weeks 6 days 15 hours ago) and read 1685 times:


What are the loads v's yields? I have seen some incredibly cheap fares advertised for NZ flights and don't forget they have cut services. Full planes don't always equate to money making.

I'm not having a go at NZ, I'm just wary about the governments involvement and how long it will stay involved. Some serious restructuring needs to be done and as Al hinted above, rumours at Star are they are not happy with NZ for some reason.

Again, remember that good loads don't always mean great yeilds, even though traffic at this time of year is great - lot's of Kiwi's going home from Oz for xmas, same with Islanders to the Islands.



User currently offlineDalecary From , joined Dec 1969, posts, RR:
Reply 18, posted (14 years 5 months 3 weeks 6 days 11 hours ago) and read 1671 times:

No doubt at some stage in the future, QF will have another go at securing NZ. They will have few other options if they are to expand and grow in the future and try to retain some identity. Can't see the NZ Gov'ts stake being anything more than for the short term.


User currently offlineMx5_boy From , joined Dec 1969, posts, RR:
Reply 19, posted (14 years 5 months 3 weeks 6 days 11 hours ago) and read 1670 times:


I think your right. The only airlines in the area with any real money in the next couple of years will be QF / SQ.

SQ have been burned by NZ, so I can't see money coming from there. Besides which it's a pretty good prediction to suggest SQ will be busy with the AN brand both domestic and International.

QF would be a natural, I can't see the NZ government playing nanny for too long if NZ keeps wracking up losses and needs fleet upgrades to keep it competitive.



User currently offlineB744 From New Zealand, joined Dec 1999, 491 posts, RR: 0
Reply 20, posted (14 years 5 months 3 weeks 6 days 9 hours ago) and read 1662 times:

yeah I think you're right. The Govt has made it quite clear that they are looking for another shareholder to take up to a 25% share and QF seems to be the odds on favourite at the moment.

User currently offlineMarara From Australia, joined Oct 2001, 680 posts, RR: 0
Reply 21, posted (14 years 5 months 3 weeks 6 days 9 hours ago) and read 1661 times:

Yahoo! Australia & NZ Finance

Thursday 29 November 12:10 PM

NZ govt floats chance of 25 pct Air NZ selldown

WELLINGTON, Nov 29 (Reuters) - The New Zealand government might sell a 25 percent stake in national carrier Air New Zealand to a cornerstone shareholder, probably an airline, New Zealand Finance Minister Michael Cullen said on Thursday.

However, the government would remain the airline's majority shareholder and the sell down would only happen when the international aviation market improved, Cullen said.

"Suppose we sell 25 percent to a cornerstone shareholder, we will still own 57 percent. There is no intention at this stage, not even a contemplation, of surrendering majority shareholding," Cullen told Reuters in an interview.

The government is to pump up to NZ$1.035 billion in debt and equity to rescue the debt-laden airline after it lost NZ$1.4 billion in the year ending June 2001, due mainly to the collapse of its unit Ansett Australia.

The bail-out will result in the NZ government owning 82 percent of the airline and Cullen said it will remain the majority shareholder for an indefinite period but "not forever".

Cullen said he would not rule out any potential buyers of the cornerstone stake but finding one was not a priority.

"We have got to get on and concentrate on getting the business right," Cullen said.

Singapore Airlines Ltd SIAL.SI owns 25 percent of Air New Zealand and had attempted to increase its stake to near 50 percent earlier this year but the proposal collapsed.

Under the government's rescue package, SIA's stake will shrink to less than five percent.

Brokering house ABN AMRO said in a research note this week it believed only two airlines, SIA and Air NZ's major regional competitor, Australia's Qantas Airways Ltd (ASX: QAN), could be possible cornerstone shareholders for Air NZ.

Air New Zealand's unrestricted B shares AIRVB.NZ last traded two cents lower at NZ$0.34 on Thursday, while the NZ resident-only A shares AIRVA.NZ were down one cent at NZ$0.33.

Singapore-based Brierley Investments BRY.SI holds 30 percent of Air NZ but will see its holding cut to around 5.4 percent if the bail-out is approved.


Ding Ding Round 2?

I like work: it fascinates me. I can sit and look at it for hours. Jerome K Jerome
User currently offlineRmm From Australia, joined Feb 2001, 527 posts, RR: 1
Reply 22, posted (14 years 5 months 3 weeks 6 days 9 hours ago) and read 1649 times:

I know this all hinges on if & when SQ & AN get together in some form but
under this proposal does SQ still have to sell out if QF were interested
even though it now owns only 4%? Do the competition laws still apply
for this low level of ownership? I think if they did I could see SQ holding
there 4% just to annoy the sh*t out of QF.


User currently offlineMx5_boy From , joined Dec 1969, posts, RR:
Reply 23, posted (14 years 5 months 3 weeks 6 days 9 hours ago) and read 1648 times:


A 25% cornerstone investor is an impossibility unless NZ shapes up financially. QF would want some contol, as SQ did.



User currently offlineZK-NBT From New Zealand, joined Oct 2000, 5549 posts, RR: 10
Reply 24, posted (14 years 5 months 3 weeks 6 days 6 hours ago) and read 1625 times:

So what routes do you guys think will be operated less frequently? And more?

I guess Asia will see more flights, and Australia afew less.


25 Al : mb - I never said that !! What I said was I had heard a funny story that came out of the Star CEOs meeting last week, involved as it was with private
26 TG992 : A giant 'Pacific Star' merger is about as likely as Qatar Airways announcing scheduled service to the moon. Wonder what this leaves..
27 Post contains images B727-200 : What's the chance of a lew/fox owned AN buying NZ in the future Stranger things have happened (ie Ansett and the Australian National Airways deal). M
28 Skystar : Please don't mention "Pacific Star", it's the most horrid, corniest name I've ever heard. I even prefer Taiwan's U-Land to that - at least it's got no
29 Mx5_boy : Al, Sorry for referencning you in that my post. I assumed you and I were on the same wavelength / rumor mill. Star are pissed off with NZ, and it only
30 BNE : I like the name Pacific Star, It can cover Australia and NZ. Why Australia and NZ, NZ get kicked out of star, that saves Qantas having to pay an termi
31 Go Canada! : Well arent we going back to square one, anz having little money, needing a fleet upgrade and no-oen to pay for it? I cant imagine SQ wanting to know,
32 Jsmith : Regarding the name Pacific Star, I can report that this was only one of 10 shortlisted names which were being proposed earlier this year. It was not t
33 Post contains images V Jet : Oh dear, it may be "outdated, cheap and nasty" but the fact remains it is one of the most recognised brands in the world.
34 Oz777 : And for all those who are saying ANZ needs a fleet upgrade - look at their average fleet age compared to the rest of the world (beats the sox off QF a
35 Post contains images Jsmith : Indeed - a "recognised brand" but that does not mean everyone who sees it likes it or what it represents
36 Skystar : Actually, I'm interested to see how this issue about NZ and a fleet upgrade got up. The only elderly aircraft are the 762s, and they hardly form the b
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