QFclub and friends who insist on bashing AirNZ.
When was the last time you were actually onboard an AirNZ long haul flight on a 744?
Firstly, the best thing that could have happend to AirNZ is the rejection of the preposed alliance with QF
because all of a sudden, AirNZ management have started doing their job and started realising that they have to compete.
Your are all right that AirNZ nearly did go bankrupt. But their health is a lot better than in those days and I don't think you guys are viewing them in fair light. Just for a second, forget Qantas even exisits, and look at Air NZ
moves for their own merit. Okay they stuffed up big time in Australia a few years back but that was partly the fault of years of Ansett losses, bad union practices, Newscorp starving the company of capital and the Australian government creating a situation where it had to compete with a company double its size overnight.
That all aside, look at Air NZ
recent achievements. Firstly, Express Class and Tasman Express. It seems they learnt the lession (and done what they should have done at Ansett) and it has paid off. It is highly profitable, its airpont memebers a very loyal (unfortunately for QF
's domestic operation in NZ
) and they appreciate the much cheaper fairs now on offer. Their aircraft are getting better utalisation (which is a big part of the cost saving LCC gain.... that and no of seats, not meals etc which is a common misunderstanding). New A320s and even some near new 733s for the interim period. Not bad for a company that was flighting for its very existance.
So now the biggest and most important part of their business has been addressed, they moved onto the second part of their business, Long Haul ops. Now, im very very pleased to see that NZ
has ordered the same seat Virgin Atlantic use, which no doubt will be a big success. Obviously they're going to use the baltic blue and teal colours they're know for as oppossed to some of the crazy stuff virgin use, and this is a First class seat, not a business class, but it is going to be sold as a business class product... its going to do well.
And by that I mean in protecting their Home market. Their home market is all those NZ
Bourgeois business ppl who are loyal airponts members, who, on their recent trips to london, have discovered the comfort of the flat beds emirates, singapore and cathay have offered them.(and not QF
because they didn't want to make an extra stop in SYD
, mel or BNE
.... same arguement used why business ppl in SYD
and Melbourne don't use Air NZ
... despite the BA
connection which isn't that popular with kiwi's, probably cause they can fill it with high paying americans instead) Presently, on the all important route to LAX
, these ppl fly Air NZ
, despite the fact that the Air NZ
seat is older than the QF
seat. Why? Because they get a truckload of Airpoints and both carriers arent using flat beds on that route. A great deal of QF
's passengers on this route started out in brisbane anyway, plus NZ
have more than double daily so you can say they are well and truely the most important carrier on this route. So, these premium customers, would happily fly Air NZ
to heathrow if the flatbeds where offered. They, would also switch to Qantas to LAX
starts offering the skybed if AirNZ did nothing. So that is their motivation for the upgrades. They economy upgrades have been on the cards for a long time, they just didn't have the cash and had other things that demanded attention first.
Secondly, I can wait to see what happens when Air NZ
gets their new long haul aircraft. All you NZ
bashes and Qantas loyalists, are going to hop across the tasman and take a ride on NZ
to try out the 7E7. (most likely to america!)
About leased aircraft. It's what is known in the financial world as gearing. A debt free company isn't necessarily considered a good thing, and won't be looked favorably by many analysts. Why? because if the company employed a healthy level of debt, they could substancially increase the return on investment to shareholders. The key is it must be at a healthly level. Leasing is one way of doing that. Borrowing (as both QF
and virginblue have done) is another, and issuing bond is yet another. What the real question here is what is the cost of capital... in layman's terms, the effective interest rate they are paying for the use of that money. (leasing is really just another form of borrowing.... your buying the use of something.... hence the reason why you buy something the government allows you to claim depreciation) This is the key issue at carriers like Delta at the moment, who can't get good deal on anything thanks to their poor credit rating.
Pricing. The important thing here is what is known as "comparitve advantage". That basically means, in a given industry, (in international terms) which country/company have the advantage in terms of factor imputs as far as production is concerned. Here Air NZ
clearly wins over Qantas, with its very high paid staff and high costs of operating out of Sydney and Melbourne. Its over 20% cheaper to get major maintaince work done in CHC
than it is in Australia. That and Air NZ
pilots are paid rather more modestly, (probably just fairly...they're not getting the kings randsom as they know they could be cutting their own throats....something that QF
staff don't seem to be able to comprehend despite jetstar)as are cabin crew etc. The catering costs are cheap in NZ
and the fresh produce there is absolutely world class, which is part of the reason Air NZ
catering is so good.( and it is absolutely amazing on the long haul with a very high level of finish, right down to teal metallic green sugar sashes) So the arguement that Air NZ
has to charge less than Qantas ignores the fact that AirNZ doesn't have to make as much money as Qantas to make the same profit.
, as far as most travel too and from Australia to the United States is concerned, only has 2 markets where it seriously competes for business traffic. That is Brisbane and Perth. PER
works very well on NZ
, without the hassel of transfer and terminal changes in the congested SYD
. The rest of the market they compete in are more casual in nature, and thus more price sensitive. Given that, they should continue to sell their seats and if they can massage their yield just a little, this could potentially also be very profitable. As far as tasman express is concerned, there are far more business travellers who are kiwis that need to cross the tasman than Australians going the other way.... once again 'airponts' give them an advantage. Think about it. The smaller economy is far more dependent on the larger economy next door than the other way around. (no offence intended to NZ
So, if for just a minute you can put aside your QF
feelings, you'll realise NZ
are actually looking quite good at the moment. They're not trying to compete with QF
on routes between SYD
... they're just trying to keep their home market and they're about to offer quite a good product to do so. Remember, QF
just a few years ago was recieving all these same critisims when it came to international services, particularly in economy. ( i remember those crappy light blue seats they used to have in their 744s) Air NZ
still offer economy passengers 34inch seat pitch (and your PTV's i've heard, are going to be something like those on the virgin A346....absolutely huge!) , so combine that with the product improvements and i really think all this bashing comes down to nothing more than rivalry. Lastly, Air NZ
has a very small market, and it isn't ever going to be able to offer the same network that QF
do. But i don't think anybody in Auckland is actually trying to do that. They're just trying to do what they can do, and do it well.