BD1959
Posts: 439
Joined: Wed Oct 02, 2002 11:43 am

Air NZ "Dead" In 3-5 Years Without Alliance

Tue Aug 19, 2003 8:24 am

Ralph Norris told the NZ Commerce Commission that Air NZ could be dead within 3-5 years unless the merger with QANTAS proceeds.

Details http://www.theage.com.au/articles/2003/08/18/1061059775506.html

BD1959
 
pilottim747
Posts: 1577
Joined: Tue Jul 17, 2001 2:34 pm

RE: Air NZ "Dead" In 3-5 Years Without Alliance

Tue Aug 19, 2003 12:42 pm

Please Mr Norris. There's still ways for Air New Zealand to avoid bankrupcy and/or liquidation with out an alliance Sure NZ isn't in a great position but I feel some other options should be looked at. The article says the the NZ Commerce Commission estimated the alliance would cost the New Zealand economy $NZ500 million in higher fares.

pilottim747
Aviation Photographers & Enthusiasts--Coordinate your life.
 
StarFlyer
Posts: 929
Joined: Thu Sep 12, 2002 10:07 am

RE: Air NZ "Dead" In 3-5 Years Without Alliance

Tue Aug 19, 2003 3:02 pm

He's saying that so his alliance with Qantas will go ahead. While Air NZ might not be able to maintain its entire currnet network I very well see a nice market where they can operate quite profitably.
Those are direct long hauls into New Zealand from Asia, especially Japan, flights to the US and the onward flight to LHR. I dont know about the Pacific network but looking at the high fares they offer those routes must be very profitable as well. Domestic is a cash cow anyway.
By the way, Air NZ is posting a profit this first half. And that is without the help of Qantas!

[Edited 2003-08-19 08:06:10]
Yours truly - StarFlyer
 
star_member
Posts: 181
Joined: Sat Dec 30, 2000 5:09 pm

RE: Air NZ "Dead" In 3-5 Years Without Alliance

Tue Aug 19, 2003 3:39 pm

i think norris is scare mongering. i don't think air nz will lose out in the domestic market at all, and have shown that they are gearing up for a fight with the express concept. the express concept has been very successful and having used the product, think it is pretty good. hopefully the tasman express product will also be as successful. internationally, air nz certainly cannot have a large route network, it is not surprising considering air nz small market of nz. why should it be a large airline with a large network anyway. as long as they concentrate are flights to its key star alliance partner hubs like sin, bkk, lax etc and any other routes with high demand, it will do well. new zealand is a small country and the airline should not be flying all over the world anyway. even lufthansa (a very large airline) does not fly to australia anymore and does very well offering a really great fare teaming up with air canada, united, singapore airlines, thai, asiana and even qantas and air china. when i have flown with this ticket in the past the flights between sin-fra and bkk-fra are always packed. i really like this fare because of the variety of stopovers offered (sin, bkk, hkg, mnl, kix, nrt, sel, bjs, yvr, sfo, lax) and lufthansa would never be able to offer this flying the routes themselves to syd, mel, bne, perth.
 
Marara
Posts: 634
Joined: Fri Oct 19, 2001 11:29 pm

RE: Air NZ "Dead" In 3-5 Years Without Alliance

Tue Aug 19, 2003 3:59 pm

While I agree that Norris is giving the NZCC a good show. We have to remember that QF isnt expanding in the NZ market at the moment as they had promised to do before the NZ/QF alliance, this seems to have gone on hold since the proposed alliance was announced. People may well say that the NZ domestic market is unprofitable from QF, this maybe so but it is providing feed for QF and OW carriers INTL flights.

The domestic scene may be a cash cow for NZ now but i cant see it staying that way when DJ enters the market. DJ and QF both know that NZ is weak, both QF and DJ have a feed from the other side of the ditch and there isn't a snowballs chance in hell they are going to go easy on NZ ( as TN/AN did when compass I/II were on the ropes, or QF/DJ when AN was).

If the alliance is rejected it will only be a matter of time before QF ups the ante in NZ putting more aircraft on intra NZ routes and possibly on the lucrative Japanese flights. I assume QF has the rights to these routes as NZ tried flying Aust - Asia from BNE a while ago.

While i hope that NZ will stay independent AND survive i just cant see it unless the NZ govt step in again. (what i found quite interesting was that the 'co-owners of NZ (NZ govt) were flying QF to take advantage of J class, whether it was personal travel or not i still thought it was funny :-P

BTW has anyone else heard that QF is looking at reintroducing FC to the AKL-LAX run since they decided the 74Js wont be getting the Skybeds? Is this why they have kept their 1st lounge in AKL? or do other airlines use it? ( i know that QF do have 3x 1st flights a week on LA metal )
I like work: it fascinates me. I can sit and look at it for hours. Jerome K Jerome
 
aerokiwi
Posts: 2253
Joined: Sun Jul 30, 2000 1:17 pm

RE: Air NZ "Dead" In 3-5 Years Without Alliance

Tue Aug 19, 2003 4:02 pm

Question:

Does anyone really believe Qantas is going to suddenly start competing on routes Air NZ flys direct from NZ to its current destinations around the Pacific?

Why on earth would people suddenly start moving en mass to QF, so that they can fly via Sydney, Brisbane or even Melbourne to get to their destination in Asia? QF has almost no presence in the South Pacific, instead relying on codeshares with local carriers, with inferior standards of inflight service to Air NZ (Air Pathetic anyone?).

I mean come on! Qantas isn't in that great a position (reporting a half yearly loss in a few days I believe, though an overall yearly profit), with increasing pressure from Virgin Blue and SQ. And it still has a heavily unionised workforce to deal with in order to cut its bloated operating costs.

I think QF has enough problems on its hands at the moment. Sure they compete with NZ on the LAX route, but it's not hard to see who the stronger player is in that market. I think with the entry of Virgin BLue into the Trans Tasman and NZ domestic markets, the biggest loser is likely to be QF. And they know it. They're afraid they're going to be left without a kiwi presence, something all the more important to them now that that they've finally cottoned on to the lower costs NZ has to offer, and the increasing importance of Jet Connect to its long term cost cutting.

These are indeed interesting times. Don't believe the spin.
 
StarFlyer
Posts: 929
Joined: Thu Sep 12, 2002 10:07 am

RE: Air NZ "Dead" In 3-5 Years Without Alliance

Tue Aug 19, 2003 4:16 pm

Why is Norris SO interested in that alliance anyway when he could do just as well if NZ would finally focus on Star Alliance?
Yours truly - StarFlyer
 
aerokiwi
Posts: 2253
Joined: Sun Jul 30, 2000 1:17 pm

RE: Air NZ "Dead" In 3-5 Years Without Alliance

Tue Aug 19, 2003 6:10 pm

Another point about the domestic market in New Zealand is the availability of regional feeder services. Currently the only real alternative to Air NZ Link is Origin Pacific, a low cost carrier. It flies to several destinations on behalf of QF, including main trunk routes such as CHC-WLG, Dunedin, Rotorua and Queenstown using ATR72s, J31s & 41s.

Now if QF were to lose this partnership when Virgin Blue arrives (ie. a Virgin Blue-Origin Pacific grouping), it's domestic presence will be even more dwindled. So QF is in a strenuous position. Not only that but they have to continue to justify the mounting losses they are incurring in New Zealand at the moment to shareholders.

And why do people really believe the majority shareholder, that is, the Government (a left wing one at that), are just going to allow a foreign carrier to enter the market and destroy its considerable investment of public funds? the Australian government spent years thwarting foreign competition (Keating's cancellation of single aviation market at the very last moment). It would be political suicide to lose over $1 billion, not to mention the loss of national pride and sovereignty. Of course they would move to protect Air NZ to some degree. In that case, Virgin Blue is probably a more favourable competitor than QFs in the government's view. Remember, Virgin Blue has never publically stated that it intends to destroy its competition (a la Geoff Dixon), merely compete with them.

In my most humble of opinions, I'm starting to suspect this may have all been an increadibly well executed delaying tactic by Norris. It's lasted 2 years now, allowing Air NZ enough breathing space to establish its low cost express service and reorganise the airline back into profitability. Has Dixon just been dicked?
 
wingswest
Posts: 12
Joined: Tue Oct 09, 2001 7:38 am

RE: Air NZ "Dead" In 3-5 Years Without Alliance

Wed Aug 20, 2003 12:36 pm

I've started hearing murmurings from QF workers as to the exact nature of the proposals. The thought that Norris is simply delaying QF attacking it, until QF finds itself in an untenable position, is starting to look a lot more likely.

I've also been reading their claims that NZ can only support one budget no frills carrier and one full service carrier. In that case, seeing as Air Nz has gone budget, if Virgin Blue enters the market, wouldn't QF find itself in the worse position?
 
tekelberry
Posts: 1309
Joined: Tue May 13, 2003 6:37 am

RE: Air NZ "Dead" In 3-5 Years Without Alliance

Wed Aug 20, 2003 3:31 pm

How would that work considering Air NZ has close ties to Star and UAL?
 
StarFlyer
Posts: 929
Joined: Thu Sep 12, 2002 10:07 am

RE: Air NZ "Dead" In 3-5 Years Without Alliance

Wed Aug 20, 2003 3:50 pm

I've started hearing murmurings from QF workers as to the exact nature of the proposals. The thought that Norris is simply delaying QF attacking it, until QF finds itself in an untenable position, is starting to look a lot more likely.

Thats a very interesting thought. Hasnt even come to my mind. If this is indeed the case then Norris is doing an amazing job!
Yours truly - StarFlyer

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