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New Zealand Aviation Thread Part 177

Mon May 09, 2016 12:17 am

Continued from the previous discussion.

New Zealand Aviation Thread Part 176 (by atcsundevil Apr 19 2016 in Civil Aviation)

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RE: New Zealand Aviation Thread Part 177

Mon May 09, 2016 1:02 am

Like mentioned in the last post, it will be interesting to see AKL in 12 months time, both international and domestic terminals at peak time are just a debacle. And yea, the drop off area, let's not get started when the traffic builds up... A dictator would hold AIAL managment accountable and have their pay based on productivity and customer convenience, then we'll see things happen
 
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RE: New Zealand Aviation Thread Part 177

Mon May 09, 2016 1:29 am

Well they need to find some cash now- shares have taken a right hammering this month. right down to $2.36 today.

"Air NZ settles US cartel case - pays out $52m"

Air New Zealand has agreed to settle a cargo cartel case in the United States for NZ$52 million.

The airline said it settled rather than take the risk of a potentially "very material commercial liability" by continuing to defend its position.

"This is purely a question of mitigating an unacceptable risk created by the US class action system which creates enormous pressure to settle such matters commercially.

There was no credible evidence that any Air New Zealand employee participated in any conspiracy, but the potential for an unexpected verdict was not an acceptable commercial risk for the airline," said John Blair, Air New Zealand's general counsel.

The case dates back to 2006, when a civil compensation claim was filed on behalf of several freight forwarders naming a significant number of global airlines, including Air New Zealand, for alleged conspiracy involving air cargo fuel and security surcharges between 2000 and 2006.

http://www.nzherald.co.nz/business/n...ticle.cfm?c_id=3&objectid=11635937
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RE: New Zealand Aviation Thread Part 177

Mon May 09, 2016 1:39 am

Quoting ZKOJH (Reply 2):
"This is purely a question of mitigating an unacceptable risk created by the US class action system which creates enormous pressure to settle such matters commercially.

There was no credible evidence that any Air New Zealand employee participated in any conspiracy, but the potential for an unexpected verdict was not an acceptable commercial risk for the airline," said John Blair, Air New Zealand's general counsel.

A shake down US style !
 
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RE: New Zealand Aviation Thread Part 177

Mon May 09, 2016 2:51 am

Quoting ZKOJH (Reply 2):
Well they need to find some cash now- shares have taken a right hammering this month. right down to $2.36 today.

And rightly so. This plus the car-wreck management of the Virgin sell-off (though I like Nouflyer's theory that it's all a cunning plan to fully takeover VA). How much shareholder value have they destoryed by spitting the Virgin dummy? Surely you would line up a buyer privately before going public and trashing your holding's (and ultimately your own) shareprice.

I dunno. Fuel prices have been edging up too and the North American fare war is also probably taking a toll. The prices out of Australia have been pretty remarkable from all players.
 
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RE: New Zealand Aviation Thread Part 177

Mon May 09, 2016 3:10 am

Quoting ZKOJH (Reply 2):
Well they need to find some cash now- shares have taken a right hammering this month. right down to $2.36 today.

I'm not sure of your point. The share price doesn't affect money available to the company, it's a matter between shareholders - buyers and sellers.

Quoting aerokiwi (Reply 4):
How much shareholder value have they destoryed by spitting the Virgin dummy?

I know you keep saying it was a dummy spit but Luxon didn't really have a choice. Once he had forced the issue of Borghetti's resignation - and lost - his position on the board became untenable and he had no realistic options other than to resign.

The ASX had to be informed of this, as they have to be informed of anything that may materially affect the stock price, and, having been informed, it was the ASX who informed the public by issuing a trading halt, which they then had to justify.

I surely don't count trying to force the Borghetti resignation as a dummy spIt. I think it was a last ditch attempt to do something drastic about the parlous state of Virgin's finances.

But - each to their own, always.

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RE: New Zealand Aviation Thread Part 177

Mon May 09, 2016 3:36 am

Quoting ZKSUJ (Reply 1):
Like mentioned in the last post, it will be interesting to see AKL in 12 months time, both international and domestic terminals at peak time are just a debacle. And yea, the drop off area, let's not get started when the traffic builds up... A dictator would hold AIAL managment accountable and have their pay based on productivity and customer convenience, then we'll see things happen

Not just peak time. Any time the terminals are at a rate of utilization that would require an expansion, the fact that they are overflowing at peak time is just an embarrassment made worse by the levels of profit they are making! You could forgive them if they were losing money and didn't have the funds to expand but they are and have been making solid profits for a long time and are really cooking the goose now.
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RE: New Zealand Aviation Thread Part 177

Mon May 09, 2016 7:07 am

Quoting mariner (Reply 5):
I know you keep saying it was a dummy spit but Luxon didn't really have a choice. Once he had forced the issue of Borghetti's resignation - and lost - his position on the board became untenable and he had no realistic options other than to resign.

Let's see. You're primary responsibility is the preservation and growth of shareholder wealth. So you go ham-fistedly about destroying as much value in your single largest shareholding by going nuclear in the boardroom, leaving yourself no option but to resign. Yeah, hardly the most strategic and clever way of doing things.

Sure, Borghetti needs to go. But there are ways of doing this - you gain support from other shareholders/board members for starters. And by all media accounts, Luxon failed miserably. The result, destruction of shareholder wealth.

Plan B - a willing buyer - didn't even exist. So unless Nouflyer's intriguing theory plays out, NZ is at the behest of the market.

Quoting mariner (Reply 5):
I surely don't count trying to force the Borghetti resignation as a dummy spIt. I think it was a last ditch attempt to do something drastic about the parlous state of Virgin's finances.

It's a dummy spit when you haven't lined up any support, you reveal your hand to everyone jostling for position and you haven't got a viable Plan B.

What are the ASX rules about disclosing a bit of an ego-driven balls up? Shouldn't Luxon have revealed to shareholders first that this was his plan? Full disclosure - why not?
 
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RE: New Zealand Aviation Thread Part 177

Mon May 09, 2016 8:05 am

Quoting aerokiwi (Reply 7):
Let's see. You're primary responsibility is the preservation and growth of shareholder wealth. So you go ham-fistedly about destroying as much value in your single largest shareholding by going nuclear in the boardroom, leaving yourself no option but to resign. Yeah, hardly the most strategic and clever way of doing things.

If, as it seems, Luxon was banging his head against a brick wall, then it was strategic, a way of getting out. This had been going on for some time.

But I guess we have different definitions of dummy spit.

Quoting aerokiwi (Reply 7):
Sure, Borghetti needs to go. But there are ways of doing this - you gain support from other shareholders/board members for starters. And by all media accounts, Luxon failed miserably. The result, destruction of shareholder wealth.

The other shareholders - Etihad, Singapore and Branson - made their position very clear.

Yes, it is the destruction of shareholder value, but many believe that destruction of wealth would have been greater, in the slightly longer term, if he had not acted.

Quoting aerokiwi (Reply 7):
Plan B - a willing buyer - didn't even exist. So unless Nouflyer's intriguing theory plays out, NZ is at the behest of the market.

Didn't exist then? May exist now?

Quoting aerokiwi (Reply 7):
What are the ASX rules about disclosing a bit of an ego-driven balls up? Shouldn't Luxon have revealed to shareholders first that this was his plan? Full disclosure - why not?

The ASX - any stock market - has to be informed first of anything that may materially affect the stock price so that no one claim that anyone else had privileged information.

mariner

[Edited 2016-05-09 01:14:55]
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RE: New Zealand Aviation Thread Part 177

Mon May 09, 2016 4:25 pm

Quoting aerokiwi (Reply 7):
Sure, Borghetti needs to go. But there are ways of doing this - you gain support from other shareholders/board members for starters. And by all media accounts, Luxon failed miserably. The result, destruction of shareholder wealth.

Step in Elizabeth Byrne whipping the other shareholders into line. Who knows what understanding between directors had been reached and scuttled when Elizabeth leaned on them. Both EY and SIN would have no trouble trotting down to the Bank and signing for another $100m or so . What is not clear to me is whether NZ still has to come up with their share or whether they can decline essentially telling VA it is your problem, deal with it.
 
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RE: New Zealand Aviation Thread Part 177

Mon May 09, 2016 8:15 pm

Quoting sunrisevalley (Reply 9):
Step in Elizabeth Byrne whipping the other shareholders into line. Who knows what understanding between directors had been reached and scuttled when Elizabeth leaned on them.

Ain't that the truth. She's been flexing her muscles.  
Quoting sunrisevalley (Reply 9):
What is not clear to me is whether NZ still has to come up with their share or whether they can decline essentially telling VA it is your problem, deal with it.

I haven;t seen anything definitive from the airline, but the various financial commentators think that Air NZ is still committed to the loan. There's debate about whether any potential purchaser would assume it.

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RE: New Zealand Aviation Thread Part 177

Mon May 09, 2016 8:49 pm

Quoting mariner (Reply 10):
but the various financial commentators think that Air NZ is still committed to the loan.

Is this by virtue of their shareholding or is it possible the Banks have an agreement with the major shareholders that in the event VA blows some predetermined ratio's, they will pony up . Good enough reason for Luxon to be mad at JB for letting this happen. For JB it is full speed ahead with his Qantas 2 stategy and damn the topedo's .
 
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RE: New Zealand Aviation Thread Part 177

Mon May 09, 2016 9:24 pm

Quoting sunrisevalley (Reply 11):
Is this by virtue of their shareholding or is it possible the Banks have an agreement with the major shareholders that in the event VA blows some predetermined ratio's, they will pony up .

It's the shareholder status that caused the loan to happen. It would have been bizarre if Etihad/Singapore had agreed to it and the largest shareholder had said no - that would have caused ructions.

I don't know the details of it, I don't think they've been published, and it may be in the form of underwriting their share at the bank.

Quoting sunrisevalley (Reply 11):
Good enough reason for Luxon to be mad at JB for letting this happen. For JB it is full speed ahead with his Qantas 2 stategy and damn the topedo's .

It started to blow up over a year ago when Luxon said that "it's time (for Virgin) to get profitable" - which upset Elizabeth Bryan.

If we're talking about the destruction of wealth, JB has been doing that quite successfully. Luxon simply lanced the boil of Virgin's finances.

The timing was unfortunate. There has been a rout in airline stocks around the world, investors/traders have been looking for excuses - any excuse - to cash in their profits, airline stocks had been getting quite frothy. The old mantra -- buy low, sell high.

http://www.fool.com/investing/genera...-inc-shares-fell-144-in-april.aspx

"Why Delta Air Lines, Inc. Shares Fell 14.4% in April"

But this too shall pass. It's entirely possible that a lot of those investors/traders will come back in at the lower price.

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RE: New Zealand Aviation Thread Part 177

Tue May 10, 2016 8:55 pm

There's a long and very informative piece about Air NZ and China in the Herald. Among other things, it confirms that PVG has finally become profitable and that they are considering increasing the service.

But the main thrust of the article is CTU - Chengdu - or similar. Supposedly there will be "some news" soon (the next couple of days?):

http://www.nzherald.co.nz/business/n...ticle.cfm?c_id=3&objectid=11637147

"Air NZ eyes new China route"

If here is an announcement - or "some news" - it may not be for Chengdu, they've also been looking at Chongqing, Wuhan, Wenzhou and Shenzhen.

The article also discusses the economics of the China routes amid the increased (and heavy) competition, and it's all quite positive.

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RE: New Zealand Aviation Thread Part 177

Tue May 10, 2016 11:28 pm

So the cat is finally out of the bag.

Shanghai has operated at a loss for Air New Zealand for all ten years of operations, and no sooner does it stop leaking red ink than China's economy slows down and the monopoly on the route is lost.

That's pretty special. Ten years of losses, the first nine of which were a monopoly.
 
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RE: New Zealand Aviation Thread Part 177

Tue May 10, 2016 11:29 pm

Toward the end of the last thread, there was a series of posts covering rumours, hints and suggestions that had been circulating about future NZ route strategy. It's interesting to look at some of these systematically, and to think also about the likely implications in the world of airline politics.

AKL-ORD-LHR: This is the most interesting and potentially the most complex idea that has been floated. Let's assume that NZ does its numbers and concludes that it can make more money carrying LHR-bound passengers itself via ORD than transferring to partners at SIN or SFO. This would have an impact on SQ and VS in particular, since they are the carriers on which NZ offers codeshares to LHR. CX (and BA!) are also on offer as connecting services in the NZ timetable via HKG. Seems to me that they will not want to rock the boat with SQ, as there is too much at stake in terms of the other European destinations that SQ offers them, but the VS relationship via SFO might be expendable.

Would UA would welcome an AKL-ORD service that also continued to LHR in competition with its own services? There's the intriguing possibility of a "grand deal" where NZ could switch most of its Europe-bound passengers to UA via ORD (and LAX, SFO and IAH) in exchange for UA supporting the AKL-ORD and ORD-LHR sectors with its own codeshares. That may be seen as a good way to minimise any impact of fallout with Asian partners.

The issue of rapidly increasing capacity into North America has been addressed many times. Currently, NZ offers 5 daily services on its own metal, more or less. Note that NZ hasn't significantly increased capacity on North American routes, but has reallocated it away from LAX and SFO and put that into IAH. Capacity will be added by AA and UA, increasing the market by 2 daily services, or maybe 35%, given that UA and AA will use smaller aircraft than NZ. While it may take a year or two for this capacity to be taken up, it's worth noting that if the market continues to grow at around 10% per year in future, there's the scope for someone to add a daily service from North America to NZ almost every year in future. NZ adding ORD at this time could be seen as a way of (a) providing an offering to counter and put pressure on AA's new LAX-AKL service; (b) providing even better links to the north-east; (c) keeping hold of funds currently given to partner airlines carrying pax from SIN and SFO to LHR; (d) providing alternate routings to many European ports via ORD; and (e) defending its own market share on the North American routes.

China services: AKL-PVG double daily has been well-signalled, and I expect that this will occur in the next few years, probably in stages. As for AKL-CTU, this seems to be both be talked up and talked down by NZ in the same report in this morning's Herald. It seems certain that there are developments coming re China, and any which way, this will represent a ballsy move by NZ further into a market that is viewed as much for its potential as for its immediate returns.

Increasing Asian frequencies will also allow fulfilment of the long-dreamed of plan to efficiently connect Asia with South America. To do this most efficiently, however, the departure time for EZE services probably needs to be advanced a couple of hours to (say) around 1630 and retiming some of the Asian flights to arrive around 1430 or some of the layovers may be excessive. I wonder, however, whether EZE is where Asian business is headed? If it's Brazil (though not many people are touting Brazil right now) then surely travelling via the USA or Mexico is a better option?

PER-CHC-LAX: This is an intriguing prospect which deserves further critical examination. A single aircraft could (just) operate PER-CHC-LAX 3x weekly. This offers the prospect of (a) making PER-CHC year-round, which will come eventually, anyway, I believe; (b) offering CHC-LAX - which may well be viable now 3x weekly with a 789 where it was not viable with a 744 in a much smaller market a number of years ago, and (c) offering PER-LAX through-plane services, at least 3x a week. In fact, with the 3x weekly summer "additional" services on PER-AKL, the timetable could very easily be drawn up to offer PER-LAX 6x weekly in summer, 3x via AKL and 3x via CHC. Now that would be of great marketing value in WA, I'd have thought, and put NZ in the box seat for PER-USA services, where at present it struggles to offer any kind of service, except a limited service in summer.

AKL-LAS: This is a perennial which keeps coming up and which will, eventually, be added to the network in my view. The only issue is whether it's soon or in the medium-long term future. The current leisure configuration of the 789 would seem to make this an obvious candidate for such a route. I'd not expect the offering to exceed 3x weekly, but this is OK for a leisure route.

AKL-MNL: While this route has already been announced by NZ, I'm wondering what impact new President Duterte might have. He's already found ways of alienating the US, China and Australia - it's an open question as to who else might be in his sights, for what reason, and what the implications in terms of political and economic relations might be. Hopefully sanity and pragmatism will prevail, but with such a populist Trump-like figure now in charge, anything is possible.

Ultimately, all these route ideas are all rumours and speculation until confirmed, and it's very likely that some of them have been investigated by NZ and then soundly rejected for whatever reason.

In any event, I don't see that with the current fleet proposals there is in reality very much slack left for new developments. By my reckoning, there are about 23 aircraft reasonably said to be committed to meet present timetable commitments: For the Americas, that's 12 (2 each for YVR, SFO, IAH, LAX, 3 for LAX-LHR, 1 for EZE), and 6.5 for Asia (2 for PVG, 1 each if carefully timetabled for NRT, HKG and SIN, 1 for KIX and additional NRT seasonal services, serving SGN and DPS in winter, 0.5 for MNL), and 3.5 for Australia-Pacific (2 for AKL and CHC-PER in the summer, 1.5 for HNL, PPT and RAR-LAX), total 22 aircraft. Assuming that with maintenance and so on this means 23 aircraft are required, then when the re-equipment plan is complete, with 27 widebody jets in the fleet, there will be "slack" of just four aircraft. I'm assuming that there is no requirement for WB service across the Tasman when the A321s come into the fleet.

Assume that AKL-PVG does swallow up a third aircraft, and that further China developments use another, that leaves just two aircraft remaining unallocated which could be used for further frequency or network expansion. That's just one daily frequency to the USA, or four trips a week on (say) AKL-ORD-LHR. So while we're seeing rapid development right now, it's not sustainable in the medium term without further fleet expansion.
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 12:18 am

Looks like we don't need to wait a few years to see PVG turn more than daily. A few route changes from this morning:

PVG going 10 weekly from 17 Dec 16
The daily NRT switching to 772 from 30 Oct 16
EZE switching to 789 from 30 Oct 16, 4th weekly added between 12 Dec 16 and 27 Dec 17

http://airlineroute.net/2016/05/10/nz-pvgnrt-w16/
http://airlineroute.net/2016/05/10/nz-eze-w16/

Quoting Nouflyer (Reply 14):
That's pretty special. Ten years of losses, the first nine of which were a monopoly.

If you remember our conversation a few years ago, I gave the example of how many years it took VS to build PVG into a profitable business. It looks like it has just taken as many years for NZ so I guess that's pretty normal. Was it worth it? Absolutely. If you look at how much marketing Toursim NZ has done in the China market, it would be almost stupid for NZ not to ride this wave.
 
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 1:23 am

Quoting xiaotung (Reply 16):
PVG going 10 weekly from 17 Dec 16
The daily NRT switching to 772 from 30 Oct 16
EZE switching to 789 from 30 Oct 16, 4th weekly added between 12 Dec 16 and 27 Dec 17

All very positive. There had been quite a lot of chatter about the success of IAH, but precious little comment on EZE up to now. Good to see that further frequencies are warranted, just a year in to the service.
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 2:03 am

Does this mean there is now 3x weekly with an 772 free'd up for something new?
 
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 2:41 am

Quoting zkncj (Reply 18):
Does this mean there is now 3x weekly with an 772 free'd up for something new?

From the look of things, the 772 is being transferred to AKL-NRT.

Quoting mariner (Reply 13):
There's a long and very informative piece about Air NZ and China in the Herald. Among other things, it confirms that PVG has finally become profitable and that they are considering increasing the service.

But the main thrust of the article is CTU - Chengdu - or similar. Supposedly there will be "some news" soon (the next couple of days?):

I'm assuming that today's announcement was the news, and that the message is that CTU is interesting but not quite yet. As I said in a previous post, the airline was both talking CTU up and down in the same release.
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 4:35 am

Quoting xiaotung (Reply 16):
EZE switching to 789 from 30 Oct 16, 4th weekly added between 12 Dec 16 and 27 Dec 17

EZE was always going to increase. AR was 4 a week, with 5 a week over the high season fr many years. It stands to reason that with a modern product, reliable schedule they will eventually be able to justify a daily service within a few years.

Incidentally I expect it's a logical assumption to say the additional PVG will 1) be an AM departure PM arrival (like current NZ286) and 2) on same day as EZE

Quoting DavidByrne (Reply 15):
I'm wondering what impact new President Duterte might have.

Not much, he will likely take care of the "Tanim bala" bullet planting at NAIA (MNL) which will hopefully have a positive effect on tourist and balikbayan travel. He's not the softly softly type but he has done very well with Davao as Mayor, so anything to cut the corruption down will make life easier to do business long term.

Quoting xiaotung (Reply 16):
The daily NRT switching to 772 from 30 Oct 16

Japan has well and truly recovered. I would maintain that HND will feature in the long term with NZ95/94 rotation as soon as they can negotiate slots. NH is massive at HND.

Quoting Nouflyer (Reply 14):
That's pretty special. Ten years of losses, the first nine of which were a monopoly.

It was a market they had to get in on while slots were available and while they were able to build up market data over time. It was always market which was a "build it and they will come" market. Of course you could say the same about VA SYD-LAX,BNE-LAX,SYD-AUH etc. The important part is they have done the hard yards now and are now making money even with increased competion.
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 5:37 am

There is a pretty big structural problem in incurring ten years of losses on a long-haul route operated as a monopoly, only to find as soon as you move into the black that a competitor enters the field.

The benefits are clearly for the nation of New Zealand, not the airline. Perhaps the airline should demand the same subsidy that they tried to extort from Samoa for APW-LAX?
 
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 6:35 am

Quoting xiaotung (Reply 16):
EZE switching to 789 from 30 Oct 16, 4th weekly added between 12 Dec 16 and 27 Dec 17

Just a small point, but a teensy typo?

Both the Airlineroute article you posted and the Herald article say that the extra EZE frequency will run until 27 February.

http://www.stuff.co.nz/travel/news/7...9-dreamliner-on-buenos-aires-route

"Air New Zealand to introduce 787-9 Dreamliner on Buenos Aires route

Air New Zealand will also step up frequency over the peak summer period, offering an additional weekly service between Auckland and Buenos Aires from December 12, 2016 to February 27, 2017."


Quoting Nouflyer (Reply 21):
The benefits are clearly for the nation of New Zealand, not the airline. Perhaps the airline should demand the same subsidy that they tried to extort from Samoa for APW-LAX?

If it's making money, I can't see why they wanted a subsidy. But I'm not sure of your comment "tried to extort" about APW-LAX. The RAR-LAX service is subsidised, and the most recent analysis of it (that I have seen) says it is unlikely ever to be profitable. I think the same might be true of APW-LAX.

http://pidp.eastwestcenter.org/pireport/2012/March/03-22-20.htm

FLIGHTS FROM COOKS TO U.S. WILL ALWAYS NEED SUBSIDY
Raro, LA service may ‘never be profitable’: Tourism official


mariner

[Edited 2016-05-10 23:40:14]
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 7:03 am

Quoting mariner (Reply 22):
The RAR-LAX service is subsidised, and the most recent analysis of it (that I have seen) says it is unlikely ever to be profitable. I think the same might be true of APW-LAX.

If you will recall this flight was AKL-TBU-APW-LAX. By combining both, NZ were likely able to offer the service with a reduced subsidy from each. Tonga withdrew subsidising their share of the subsidy, and Samoa couldn't afford to maintain the combined subsidy that would have been required for NZ to maintain the service so they elected to pull out of the deal.
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 7:39 am

With all these NZ increases during the peak December/January, and likely to see a couple more. How its AKL going to handle this extra traffic? Decemeber last year was pretty painful.
 
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 8:38 am

Quoting zkncj (Reply 24):
How its AKL going to handle this extra traffic?

Buses and if they are lucky an extra layover, There is no construction company who can build anything before then.
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 9:37 am

Quoting aerorobnz (Reply 23):
PW-LAX.

If you will recall this flight was AKL-TBU-APW-LAX. By combining both, NZ were likely able to offer the service with a reduced subsidy from each. Tonga withdrew subsidising their share of the subsidy, and Samoa couldn't afford to maintain the combined subsidy that would have been required for NZ to maintain the service so they elected to pull out of the deal.

I wonder why Air New Zealand didn't deliver a similar ultimatum to the government of the People's Republic of China? Now that we know that Shanghai made ten consecutive years of losses.

Are standover tactics for unprofitable routes only employed with the weak and the vulnerable? Or is it that extortion is only acceptable within your own whanau?

Either way it's pretty unsavoury.

And of course, with Virgin and Borghetti "it's time to get profitable." But Shanghai is the cat with ten lives.

[Edited 2016-05-11 03:00:26]
 
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aerorobnz
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 9:59 am

Quoting Nouflyer (Reply 26):
Are standover tactics for unprofitable routes only employed with the weak and the vulnerable?

There is no standover tactic. NZ had to do what they were told as far as slots and to begin with they could only operate a maximum of 7 a week, which they got wrong by splitting over two ports.

Longterm neither Samoa or Tonga have much to offer New Zealand business wise and there was no restriction on operation except payload.. There are 1.3 billion Chinese - so eventually if you can grow the market to sustainability you will make money. AKL-TBU-APW-LAX was an infrequent legacy route that was not worth flying for either NZ or New Zealand without subsidy and it had no real long term future or growth opportunity beyond what it was.

You presume it was a massive loss over 10 years, as opposed to a loss leader to encourage more people onto NZ and to New Zealand. Without NZ the NZL-chinese market would never be in a position to cope with all these airlines now, and CZ wouldn't have started as the 7 weekly slots that a Chinese airline as then entitled to operate/ NZ had to start when they did or they would have ended up with nothing, it was likely several years too early but their and was forced to an extent.
Flown to 147 Airports in 62 Countries on 83 Operators and counting. Wanderlust is like Syphilis, once you have the itch it's too late for treatment.
 
Nouflyer
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 10:05 am

Is a "loss leader" worth sustaining when it loses money even as a monopoly?

And when, to use the expression the airline used when axeing a certain other route you "nurse it back to health", it's pretty special to immediately increase capacity by 43%. Which they have just done with Shanghai. You'd almost think that Borghetti and Joyce were writing this playbook.
 
xiaotung
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 10:41 am

Quoting Nouflyer (Reply 14):

So the cat is finally out of the bag.

Shanghai has operated at a loss for Air New Zealand for all ten years of operations, and no sooner does it stop leaking red ink than China's economy slows down and the monopoly on the route is lost.

That's pretty special. Ten years of losses, the first nine of which were a monopoly.

To be fair, unlike the investment in VA, we don't know how much NZ has lost in those ten years operating into PVG and PEK. A $100 loss is also a loss.
 
Kiwirob
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 11:34 am

Quoting Nouflyer (Reply 28):
You'd almost think that Borghetti and Joyce were writing this playbook.

One route not performing is a lot different form Virgin not performing year in year out.
 
nascarnut
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 4:31 pm

Quoting Nouflyer (Reply 26):
How its AKL going to handle this extra traffic?
Buses and if they are lucky an extra layover, There is no construction company who can build anything before then

Does AIAL have enough buses. I guess buying buses is a cheaper option vs. adding additional terminal space for new gates. AIAL could look like the bottom of Queen Street during rush hour with buses constantly coming and going. Just hope it runs smoother than the Auckland Motorways.
As for adding more layovers, I don't think there is anymore land readily available to add layovers unless the can develop the land behind gates 13/14 and those layovers. Everything else between Intl and Dom has already been converted to layover gates. They will have to start using taxiway Delta more as a long layover option while using the other layovers gates for short turnaround flights. This coming December/January will be interesting.
 
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sunrisevalley
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 4:39 pm

Quoting nascarnut (Reply 31):
I guess buying buses is a cheaper option vs.

How do they handle handicapped passengers who cannot climb from the bus at ground level to cabin level? How about wet days, are the stairs covered?
 
FlyingSicilian
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 4:58 pm

http://www.nzherald.co.nz/business/n...ticle.cfm?c_id=3&objectid=11637332



The article notes the new flights are making tourism a growth industry.
“Without seeing Sicily it is impossible to understand Italy.Sicily is the key of everything.”-Goethe "Journey to Italy"
 
zkncj
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 7:09 pm

Quoting sunrisevalley (Reply 32):
How do they handle handicapped passengers who cannot climb from the bus at ground level to cabin level? How about wet days, are the stairs covered?

Stairs aren't provided by AIAL, they are provided by the airlines serving agent. Some agents have covered in stairs, although an large amount of the 737/320 stairs are open air.
 
zkncj
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 7:11 pm

Quoting aerorobnz (Reply 25):
Buses and if they are lucky an extra layover, There is no construction company who can build anything before then.

Surely if they aren't going to invest anything into the Terminal development in the near term, they could at least build an OOL style Tasman Shed.
 
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mariner
Posts: 19473
Joined: Fri Nov 23, 2001 7:29 am

RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 7:56 pm

Quoting aerorobnz (Reply 23):
Tonga withdrew subsidising their share of the subsidy, and Samoa couldn't afford to maintain the combined subsidy that would have been required for NZ to maintain the service so they elected to pull out of the deal.

I tried to fly LAX-APW-AKL when I came back in 2005, to zone out in Samoa for a few days, but for some reason the onward flight didn't work out.

Much as I'd love to see APW-LAX (the old island beachcomber in me) I think it's probably a very tough market, as wth RAR-LAX and neither Samoa nor Rarotonga have the same high profile of Tahiti.

mariner
aeternum nauta
 
DavidByrne
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 9:33 pm

Quote:
Hong Kong Airlines on Wednesday (11MAY16) has filed operational schedule for planned service to New Zealand, announced by the airline earlier this month. Proposed operation sees the airline operating Hong Kong - Auckland service on daily basis, effective 10NOV16.

Reservation for this route is currently not available, but expected to open soon.

HX021 HKG1520 - 0730+1AKL 332 D
HX022 AKL0930 - 1555HKG 332 D
HX022 from Auckland begins from 11NOV16

From another web site this morning . . . confirmation re HK Airlines' intentions.
This is not my beautiful house . . . This is not my beautiful wife
 
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sunrisevalley
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 9:39 pm

Quoting DavidByrne (Reply 37):
From another web site this morning . . . confirmation re HK Airlines' intentions.

when will AIAA start issuing slots?
 
ZaphodHarkonnen
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 9:54 pm

Quoting sunrisevalley (Reply 32):
How do they handle handicapped passengers who cannot climb from the bus at ground level to cabin level?

I remember seeing at WLG what were essentially covered lift platforms that looked purpose built for the task of getting people from the tarmac up to the plane door. I'd be honestly shocked if AKL didn't have something similar.
 
Motorhussy
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 10:03 pm

Quoting FlyingSicilian (Reply 33):
The article notes the new flights are making tourism a growth industry.

It also reports on the industry bemoaning of a lack of Kiwis choosing to work in tourism, but given that most jobs in tourism are essentially hospitality roles or other minimum wage placements, it's hardly surprising.

Quoting sunrisevalley (Reply 32):
How do they handle handicapped passengers who cannot climb from the bus at ground level to cabin level?

Yes, this really would turn a disability into a handicap.
come visit the south pacific
 
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sunrisevalley
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 11:06 pm

Quoting motorhussy (Reply 40):
but given that most jobs in tourism are essentially hospitality roles or other minimum wage placements, it's hardly surprising.

Over time this is going to hurt. In my view the industry is not sustainable if based on workers rotating through the industry at minimum wage.
 
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aerorobnz
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Joined: Sat Feb 10, 2001 3:43 pm

RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 11:31 pm

Quoting sunrisevalley (Reply 41):
Over time this is going to hurt. In my view the industry is not sustainable if based on workers rotating through the industry at minimum wage.

It's the same in every western country where the hourly wage outstrips the actual skill set. Tourism is an industry dependent on unskilled customer facing labour. It's no different from working in hospitality or retail.

Quoting ZaphodHarkonnen (Reply 39):
I'd be honestly shocked if AKL didn't have something similar

Air New Zealand has 2 high loader trucks designed for passenger handling to process passengers who can't climb/Stretchers etc etc. Menzies/Aerocare have capability on smaller aircraft but they don't have a truck for the larger aircraft.
Flown to 147 Airports in 62 Countries on 83 Operators and counting. Wanderlust is like Syphilis, once you have the itch it's too late for treatment.
 
Motorhussy
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RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 11:31 pm

Quoting sunrisevalley (Reply 41):
In my view the industry is not sustainable if based on workers rotating through the industry at minimum wage.

Totally agree. While a robust tourism industry is great for bringing foreign exchange into the country, a smart economy based on commerce and trade of tertiary products and services is what will fill the front of the planes to New Zealand.
come visit the south pacific
 
zkncj
Posts: 3259
Joined: Wed Nov 09, 2005 4:57 pm

RE: New Zealand Aviation Thread Part 177

Wed May 11, 2016 11:53 pm

Quoting DavidByrne (Reply 37):
HX021 HKG1520 - 0730+1AKL 332 D
HX022 AKL0930 - 1555HKG 332 D
HX022 from Auckland begins from 11NOV16

Nice so right in the middle of the Short-Haul AM widebody peak
 
axio
Posts: 258
Joined: Fri Jul 14, 2006 10:44 am

RE: New Zealand Aviation Thread Part 177

Thu May 12, 2016 4:45 am

What happened to QF171 today? Looks like it aborted landing at WLG then diverted to CHC. Plenty of other aircraft seem to be getting in fine. http://flightaware.com/live/flight/Q...1/history/20160512/0041Z/YMML/NZWN
Time for a new viewing deck at AKL!
 
thegrandvizier
Posts: 16
Joined: Tue Jul 10, 2007 9:01 am

RE: New Zealand Aviation Thread Part 177

Thu May 12, 2016 5:52 am

I think it was wind shear. We were behind them.
 
zkncj
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Joined: Wed Nov 09, 2005 4:57 pm

RE: New Zealand Aviation Thread Part 177

Thu May 12, 2016 6:42 am

Quoting motorhussy (Reply 40):
It also reports on the industry bemoaning of a lack of Kiwis choosing to work in tourism, but given that most jobs in tourism are essentially hospitality roles or other minimum wage placements, it's hardly surprising.

I wonder what there description of an Kiwi person is then? After all New Zealand is an pretty multi cultural company.
 
ZKOJH
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Joined: Mon Sep 13, 2004 9:51 am

RE: New Zealand Aviation Thread Part 177

Fri May 13, 2016 2:00 am

"Air New Zealand’s 75th exhibition to land in Christchurch"


Air New Zealand will take its highly successful exhibition - Air New Zealand 75 Years: Our Nation. The World. Connected to Canterbury Museum in Christchurch in September this year.


More than 650,000 people have visited the exhibition in Wellington at Te Papa Museum and Auckland at the War Memorial Museum.

The free exhibition will feature interactive elements, behind the scenes operational insights to the airline, favourites such as the virtual reality future cabin, historical collections as well as a display of uniforms through the decades and dress ups for children.

Air New Zealand Chief Executive Officer Christopher Luxon says the airline is delighted to have the opportunity to partner with Canterbury Museum, enabling people to enjoy the exhibition in the South Island too.


http://www.airnewzealand.co.nz/press...exhibition-to-land-in-christchurch
Air New Zealand ~ dreams of flying
 
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Zkpilot
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RE: New Zealand Aviation Thread Part 177

Fri May 13, 2016 2:42 am

Quoting Nouflyer (Reply 28):

Is a "loss leader" worth sustaining when it loses money even as a monopoly?

NZ has made mention that part of the reason why they have been able to steadily increase domestic capacity (and profit) is because of international visitors (and a particular mention of China). So while by itself PVG might have been losing money overall the network might have had a net gain from it and now that it is making money bonus!
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