26 March 2012

Gisborne Looking to Improve its Air NZ Service

The closure of the Waioeka Gorge between Gisborne and Opotiki has caused many problems for people wanting to travel to and from Gisborne. Obviously many people are looking to fly and are put off by the high fares. Air NZ is often put in a no win situation with people in the regions served by Beech 1900s and Bombardier Q300s wanting the same sort of fares offered on Airbus and Boeing services on the main trunk. Yet flying in NZ has never been cheaper with so many doing it! This comment from Saturday's Gisborne Herald is a really balanced piece that looks to how the region can look to boost its air services.

While on the Gisborne Herald site search "Air New Zealand" to see what others have been saying.

Recent complaints by the Mayor, councillor Alan Davidson, the Gisborne Herald editor and others are not a constructive way to deal with the issues they present. Air New Zealand is not raising fares as a result of the closure of the Waioeka Gorge — such claims are simply untrue. In fact, average fares to and from Gisborne have actually fallen by 2 percent over the past four years. This reduction is quite remarkable when you take into account general inflation and the skyrocketing cost of jet fuel, now Air NZ’s single largest expense, which has gone up by 100 percent over a similar period and now totals $1 billion in cost per annum. In addition, capacity to and from Gisborne is up 9 percent during this period, and is set to increase further. Air NZ has confirmed extra 50-seat Q300 flights during Easter, and will soon finalise plans for up-gauging a daily Beech 1900D (19 seats) Gisborne-Auckland return service to a daily Q300 (50 seats) return service. This is expected to begin in late April. It is worth pointing out that load factors have not significantly increased since the gorge closure and continue to sit around the 80 percent level. The Gisborne Chamber of Commerce has been working to improve air services by directly engaging with Air NZ. We negotiated the Q300 flights. (Note: this came at a subsidy gifted to Air NZ of over $100,000 a year for three years, 90 percent of which was paid by Eastland Community Trust. Ed.) Recently we worked with council staff to survey 1000 airport customers coming to and from Gisborne (the report can be found on the Chamber’s website). Of note, 52 percent of air travellers are coming and going on business, and a lot of travellers would like to see fights extended to Christchurch. On the 14th of this month the Chamber, Tourism Eastland and Peter Higgs of the District Council met with Carrie Hurihanganui of Air NZ. It was a very productive meeting and others will follow. But some things will hold us back. Air NZ asked for a strategy document of what Gisborne was looking to achieve in the next two-to-five years. Tourism Eastland is close to completing its new strategy and the council has its 10-year plan, but we do not have a plan or an economic development agency that would deliver growth in employment and wages. In addition, negotiations between Eastland Infrastructure and Air NZ (and other carriers) on landing fees are soon to begin. There has not been a landing price increase for 10 years, and you can’t run a safe and efficient airport or cover your cost of capital or do any improvements without some kind of increase. The tourism situation is always difficult. Air NZ received $323,000 of subsidy from our community to get the larger Q aircraft here. Now no subsidy is required. Tourism Eastland receives about the same every year, mostly through targeted rates, and the Eastland Community Trust has been pumping millions into tourism, but we have yet to see a lot of growth in the sector. It is less than 4 percent of our regional GDP. But I don’t hear anyone complaining about these ongoing subsidies. That’s just the way it works, here and all over the country. And having nice facilities and events is good for the region. Air NZ has two roles. To support, grow and connect regional New Zealand. And to deliver a dividend to its shareholders. The bottom line is that if more people fly here, we will get more destinations and bigger aircraft which are generally cheaper to run. And the way to achieve better air services here is through face-to-face talks and building on points of agreement.

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