3rd Level New Zealand: NZ's Southern Most Airline: Part 2

09 May 2010

NZ's Southern Most Airline: Part 2 - Southern Air

UPDATED FEBRUARY 2024

On the 23rd day of December 1980, reflecting its regional focus, "Stewart Island Air Services Limited" changed its name to "Southern Air Limited."

At this time, Southern Air was leasing Britten-Norman Islanders from Mount Cook Airlines to maintain the scheduled services between Invercargill and Stewart Island following Britten Norman Islander, ZK-IAS, having been written off in October 1980. Islanders ZK-DBV and ZK-MCE were used at various times.

Southern Air continued to use Cessna 402 ZK-DSB and Piper Aztec ZK-TJE to operate the scheduled services between Invercargill and Dunedin which operated morning and evening return services on weekdays. Both these aircraft retained their Stewart Island Air Services branding.

Wearing Stewart Island Air Services titles but operating Southern Air flights, Cessna 402B ZK-DSB (above) at Dunedin on the afternoon flight from Invercargill on 16 January 1981. I was rather surprised when a short time the 402 arrived the Piper Aztec ZK-TJE (below) arrived on a courier flight from Invercargill.

Southern Air’s flights between Invercargill and Stewart Island Ryans Creek airfield were the mainstay of the airline’s operations. However, the airline also offered flights for trampers, fishermen and hunters to the beaches on the west coast Stewart Island.

By the 1st of April Southern Air had reduced the Dunedin service to a daily service that operated northbound Sunday to Friday and southbound Monday to Saturday. As seen in the timetable below the airline was looking to purchase a GAF N22B Nomad.

Southern Air timetable included in the Air New Zealand timetable, effective 1 April 1981

In August 1981 the replacement aircraft for Britten Norman Islander ZK-IAS arrived in the form of GAF N22 Nomad ZK-SAL. This was the first aircraft to carry Southern Air titles but retaining the Stewart Island Air Services' logo.

A couple of photos of Southern Air's new GAF N22B Nomad, ZK-SAL in August 1981. Above, the Nomad at Invercargill, photo M Beaven, and. below, at Ryans Creek on very mucky Ryans Creek airfield, photo Southland Times

Southern Air timetable, effective 9 November 1981

The Southern Air weekday flights between Invercargill and Dunedin overnighted in Dunedin. This enabled passengers from the morning Air New Zealand service from Christchurch to Dunedin to connect with the Southern Air flight to Invercargill. Passengers doing a day's business could then catch the afternoon Air New Zealand direct flight back to Christchurch or the Southern Air flight to Dunedin enabling business passengers the whole day in Invercargill. The afternoon flight north to Dunedin often carried a lot of courier freight.

The Press, 7 April 1982

The Cessna 402, ZK-DSB, which Southern Air continued to use for charter and air ambulance work was finally removed from the fleet in May 1982 going to Dunedin based Skyways Flite Services.

With the Cessna 402 gone, leaving just the Nomad ZK-SAL in the fleet, from the 1st of June 1982 Southern Air introduced a twice-daily return service between Invercargill and Dunedin enabling the Nomad to return to Invercargill for the Stewart Island flights. The first flight left Invercargill at 7.10am, with the return flight departing from Dunedin at 8.15am. In the evening the departure time was 5.15pm from Invercargill and 6.30pm from Dunedin. Southern Air offered a $109 return fare which included a rental car for the day and 100 free kilometres.

Meanwhile the Nomad, which was the only aircraft in the fleet, proved to be a problematic aircraft. The 30 nautical mile sector across to Stewart Island was too short for the turbo-prop Nomad and the aircraft gave the company a lot of engineering problems. With no backup aircraft the airline was forced to hire a Mount Cook Airlines Britten-Norman Islander to maintain the scheduled services to both Stewart Island and Dunedin. Added to this, poor weather during the 1982-1983 peak summer season effected loadings and revenue placing further pressure on the company’s financial situation.

Southern Air timetable, presumably effective 1 June 1982

GAF N22 Nomad, ZK-SAL, at Invercargill on 16 November 1982.

The decision had already been made to sell the Nomad when things came to a head and the Development Finance Corporation placed the company in receivership on the 15th of March 1983. Receivers were appointed and they decided to trade the company back to profitability. The Nomad was sold in Australia and a Mount Cook Airlines BN Islander and a Piper Aztec, ZK-DUB, were leased as an interim measure. The Aztec was used mainly on the Dunedin run and was with the company until sometime in the first half of 1984. Meanwhile a second hand Britten Norman Islander was obtained ZK-FFL, arriving in Invercargill on the 27th of May 1983 and entering service in June 1983. The aircraft was purchased privately by the original company directors and leased to Southern Air to allow continued operations.

ZK-FFL, still reflecting her previous ownership by Air Fiji, at Invercargill on 10 November 1983.

On the 5th of December 1983 the Christchurch Press reported that the financially troubled Southern Air, Limited, the only airline serving Stewart Island, is to be restructured. Receivers for the airline, Mr O. C. Pierce and Mr D. E. Mitchell, say agreement has been reached between the debenture holders, the Development Finance Corporation, and four Southern Air directors who have undertaken to inject substantial funds to maintain the company’s operation. Mr Pierce says that Southern Air is in serious financial difficulties caused largely by big losses on the operation of its Nomad aircraft. Since the appointment of the receivers in March, this has been sold to Australian interests. Recently the company has been using a Britten Norman Islander aircraft on the Stewart Island run, with back-up for its Dunedin service from a Piper Aztec. It is apparent this operation will not recoup the earlier losses, Mr Pierce says. The proposed restructuring will enable Southern Air to operate an improved service for Stewart Island as well as continue the Dunedin-Invercargill operation, he says. Southern Air was launched with a nominal capital value of $l0,000 in 1976. In 1981, the authorised share capital stood at $112,000 and on August 13 that year the company agreed to increase its capital to $200,000 with the assistance of funding from the DFC.

On the 27th of January 1984 a massive flood inundated Invercargill disrupting services from Invercargill. Dave Bates recounted the impact of the floods in the September 1985 issue of NZ Wings... Invercargill was particularly hard hit and the airfield submerged, but fortune was at last smiting on the company. In the nick of time, Islander ZK-FFL was flown off the rapidly flooding runway and positioned on the topdressing strip at the Awarua Lands and Survey station, some 12 kilometres from Invercargill. The Awarua strip, with a total lack of amenities, was to be the only means of providing an air service into and out of Invercargill over the next few weeks, short of going by helicopter. Operations during this period remain vivid memories for Paul Thomson. "We were flat out from dawn till dusk. All our records were lost when the terminal was flooded and we were forced to set up a temporary terminal/ check-in desk on a vacant car-sales yard in town. Routine maintenance was carried out under extremely primitive conditions at Awarua by Roger Harvey (of Avcorp Engineering) and we cleaned off the sheep droppings while in Dunedin. Since the Islander was flying both the Dunedin-Invercargill services and the Stewart Island run, there was no respite for Max and myself, although we were helped out by a former pilot, Gary Jones. We were very lucky that it (the Islander) was so reliable." Once the airport was finally drained, operations shifted back, although Southern Air still provided the only scheduled air service (Air New Zealand F.27 flights did not resume for several more weeks due to the suspect bearing of the runway). After checking-in, passengers were now driven through the slime covering the airfield to the end of the runway, as the terminal was still uninhabitable after the floodwaters had receded. Eventually, the company's terminal offices were regained in mid-1984, Operations without the use of hired machines finally became possible when the company's second Islander ZK-FGR arrived in March 1984. This aircraft is equipped to single-pilot IFR standard and was initially purchased to fly the scheduled services to and from Dunedin, operations not satisfactorily handled by the VFR-only ZK-FFL.

Advertising for the Invercargill air link after the floods in The Press, 14 February 1983

A second Islander, ZK-FGR, was added to the fleet in March 1984 and two months later, in May, Southern Air Ltd was released from receivership after trading its way out of its financial problems of early 1983. An injection of $250,000 in new capital in late 1983 was a major factor in the company turn around. Under the restructuring the four Southern Air directors, who made the cash injection, Keith Smith, Joe Cave, Sam Nicol and Bill Hazlett, took over the company and held 85 per cent of the shareholding.

Dave Bates' Southern Air article gives some insight into the ownership for the airline and the philosophy of the new shareholders. As managing director and chief shareholder, Keith Smith - himself an Islander - explains "Three of the four company directors live and work on the island and have interests in its two main commercial activities - tourism and fishing. While the previous company direction might be said to have been that what was best financially for the airline was best for Stewart Island, we have adopted the slightly different approach in that (within reason) what is best for Stewart Island is also good for the airline. We are out to promote the Island as a tourist attraction and as a community, in the expectation that if the Island prospers, so will the airline."

The change in ownership has also seen the adoption of a new company logo and a striking new aircraft colour scheme which features Stewart Island as boldly as the airline's name. The change of direction at the top has also seen the resolution of a controversy that has dogged Stewart Island Air Services/Southern Air since its inception. The question of private access to the company's Ryan's Creek airstrip has simmered for many years, but the new management, in keeping with its accent on identification with Stewart Island, decided that the previous restrictive policies were counter-productive and no longer appropriate. Access to the strip is now basically unrestricted to private pilots, providing the company's conditions are met - that the company be indemnified against commercial loss in the event of a crash blocking the strip, that transport from the strip be provided by Stewart Island Travel and that the visiting pilot has suitable experience (generally this means current on strip work).

In mid-1984 the company employed Phil Kean, a Southlander from Centre Bush, who had earlier formed Central Western Air (Southland) Ltd based on his farm.

Southern Air publicity postcard

In June 1984 the company announced it would cease its Invercargill-Dunedin flights from the 6th of July. The death knell to the service was losing a courier contract to road transport and there not being enough passengers to keep the service viable. The manager of Southern Air, Mr Max Paulin, of Invercargill, said the company had no option but to stop the service. "We needed both passenger revenue and the courier service to make the route pay," he said. "We looked at every avenue to keep the service going, but could not make it profitable." A Radio New Zealand news report said that 130 to 170 passengers were carried on the Dunedin service each month compared to 17 to 20,000 thousand carried annually on the Stewart Island service. The company said it would concentrate on its Stewart Island service and charter work.

The company restructure paid off for in late December 1985 the company told the Southland Times that. “during the 1983-84 financial year, about 14,000 people were carried by the airline. In the past year, traffic volume rose to 22,000 people and the forecast for the current year is 30,000 passengers.” To some extent this situation was helped by the demise of the Stewart Island ferry service. In November 1985 Southern Air had taken delivery of its third Britten Norman Islander, ZK-FLU. Also used was a Cessna U206G, ZK-ETN, owned by Brian Hore and a Cessna 172M, ZK-FSI owned by Bruce Forde. Both were used for about 3 years, mainly for beach work but they were also regularly used on the Stewart Island service.

At the end 1985, as Dave Bates recounted, salmon farming was poised to make considerable impact on the airline's future. This summer, it is expected that some 350 tonnes of salmon will be carried out on Sundays, Mondays and Tuesdays, necessitating 6 Islander freight flights per day to get it to Invercargill. The mode of operation is to fly the chilled salmon across to Invercargill, where the crates are transferred to Air New Zealand for rapid transit onto Auckland. Several hours later, they are in the hold of a Boeing 747 heading for the United States market on the table there within 48 hours of being taken from the water. Barring unforeseen problems, this trade looks set to generate much additional freight revenue and Southern Air are at present beginning an evaluation of aircraft with a mind to their freighting abilities.

Southern Air timetable, 1st November 1985

BN Islander ZK-FFL at Ryans Creek on Stewart Island with one of the yellow Transit vans in 1985.

A couple of Bruce Gavin's photos of Southern Air ops at Invercargill in December 1985. Above, Britten Norman Islander ZK-FGR...

...and ZK-FFL and ZK-FGR.

In the late 1980s Southern Air diversified. A helicopter division was added, with the company operating two Squirrels, first an Aerospatiale AS 350B ZK-HBH and later an Aerospatiale AS 350D Astar ZK-HZP, from 1988 to 1991. Then in 1989 Keith Smith along with Dick Langdon, established another Southern Air operation, the $500,000 Shearwater Inn on Stewart Island. This 28-room, 80-bed complex provided backpacker and budget accommodation, doubling the existing visitor accommodation capacity on the island.

Squirrel ZK-HBH at Invercargill with Richard Mills and Keith Smith.

A couple of photos at Dog Island. Above, the Aerospatiale Squirrel ZK-HBH, photo NZ Aero Products...

and Britten Norman Islander ZK-FFL in 1987.

Another photo of Britten Norman Islander ZK-FFL on one of Stewart Island's western beaches in 1987

ZK-FFL at Invercargill on 24 May 1987.

The company was busy in other directions as well. The Ryans Creek airstrip was extended in 1990 by 200 metres to 800 metres with the removal of a hill. The company also opened the airstrip to private aircraft.

Ryans Creek Airstrip on Stewart Island after the hill was removed and the runway extended to 800 metres.

BN Islander ZK-FLU arrives at Ryan's Creek, 3 July 1993.

In 1991 fleet replacements saw two Islanders ZK-FXE and ZK-FWZ being sourced from New Caledonia to replace ZK-FFL, which had been withdrawn from service in 1990, and ZK-FGR.

Reflecting its previous New Caledonian owner, Air Moorea, ZK-FWZ, is seen at Invercargill on 2 July 1993.

The Islander was, as it still is, the perfect aircraft for the Stewart Island run along with being versatile enough for other uses. In 1991, Barry Rhodes, Southern Air's sales and promotions manager told NZ Wings, "The Islander is just what's required. It's economical and versatile, and we can take the seats out and convert it for freight within a few minutes. Perhaps 10 percent of revenue comes from Stewart Islanders, another eight percent tradesmen and business people with the remainder being tourists, both domestic and international, and freight. We carry anything and everything." While the Stewart Island schedule was the mainstay of the operation the Islanders were also to be found on beaches picking up or dropping off fishermen, hunters, or trampers, on air ambulance flights to Taieri, Christchurch, or even Auckland, as well as servicing the lighthouse at Dog Island. The early 1990s saw the start of fish and live crayfish flights starting from the Island. To facilitate this an IFR approach was established for flights into Stewart Island.

BN Islander ZK-FGR on an air ambulance flight to Taieri, 27 September 1991.

The early 1990s saw Southern Air buy the Post Office/depot to serve as a terminal for the waiting passengers. Southern Air bought its own vans to collect and drop passengers at Ryans Creek. Southern Air also bought the South Seas Hotel.

The Depot after its purchase in 1995

The 1992 Southern Air team... Barry Rhodes, Annie Stinger, Philip Kean, Anne Rowley, Keith Smith, Kerry Smith, Michelle, Tony Stewart, Robin Andrews and Murray Donald

The 1996 team - Steve Philips, Robin Andrews, Craig Miller, Jeff Slater, Nathan Helms, Philip Kean, Bill Moffat

On the 20th of November 1995 Southern Air introduced a new direct flight from Stewart Island to Dunedin. Four flights were operated each week on Mondays, Wednesdays, Fridays and Sundays and the company announced that it would operate the service until March 1996 when it would be reviewed. Five passengers flew on the first direct service from Dunedin to Stewart Island. These flights were again operated over the 1996/97 summer but were not repeated after that.

Southern Air's timetable effective 1 May 1996

And the Stewart Island - Dunedin direct service effective 1 October 1996

In 1997 Southern Air was bought by Allan Aitcheson, and the company was renamed Southern Air (1997) Ltd, the third incarnation of the operation. At this stage the company used two Islanders, ZK-FLU and ZK-FXE as well as a Cessna 172P, ZK-DNP, and a Cessna 177RG, ZK-DXS.

Cessna 172 ZK-DNP (above) at Ryans Creek and Cessna 177RG ZK-DXS at Doughboy with long time manager of Southern Air, Phil Kean

Southern Air restarted scheduled flights between Invercargill and Dunedin in 1997. The new Monday to Friday schedule saw twice daily flights between the two centres.

Southern Air restarted flights between Invercargill and Dunedin in 1997. Above, BN Islander ZK-FXE advertises the new service at Invercargill on 4 January 1997. Below, newly painted but without titles ZK-FXE on the service at Dunedin on 15 September 1997.

Southern Air's schedule with the reintroduced Dunedin service. Timetable effective 1 April 1997

Cessna 402 ZK-VAC was registered to Southern Air on 2 April 1998 and this was used on the Dunedin service. It was also to be used for air ambulance work, the company having gained air ambulance accreditation from the Aviation Industry Association. The aircraft had been modified with a Robertson short-takeoff and landing STOL kit so it could also operate into Ryans Creek. The Dunedin service once again did not prosper and was discontinued in July 1998. It was decided to keep the Cessna 402 and use it to supplement the Islander to Stewart Island when needed. Sadly, this aircraft was to be at the centre of Southern Air’s blackest day.

On the 19th of August 1998 ZK-VAC had a double engine failure on a flight from Stewart Island to Invercargill. A mayday call was made just before five o'clock that evening. The pilot, Robin Andrews, successfully managed to ditch the plane in Foveaux Strait 2.5 nm west of Bluff and he and the nine passengers successfully escaped the aircraft. The aircraft stayed afloat for some minutes after the landing. The pilot, realising that he and three passengers did not have life jackets entered the aircraft to find some to no avail. Due to some confusion as to the exact crash site, it took over an hour for rescuers to reach the spot and in that time five people, including the pilot, died from hypothermia in the wintery cold waters of Foveaux Strait. The aircraft was recovered and while the accident report suggested the cause may have been fuel exhaustion no conclusive cause was ever established.

The Southern Air fleet in 1998 including the ill-fated Cessna 402, ZK-VAC. It was repainted subsequent to this photo into full Southern Air colours but I have never seen a colour photo of this.