The Changing Face of Regional Air Services - My Comment

Last week’s announcement from Air New Zealand that it was cutting a number of provincial services wasn't really a surprise. The pattern set with the withdrawal from Oamaru, Wanaka and Masterton looked set to continue as the airline started reducing its uneconomic Beech 1900 fleet.

Kaitaia... going

Whakatane... going

Westport... going

So the cessation of services to Westport and Kaitaia was not totally unexpected. Both ports received at most two flights a day. To service them with a Q300 would be a return to Friendship days with a return flight probably in the middle of the day and with this not being suitable for business traffic the service would soon become unsustainable.

Oamaru... gone!

Wanaka... gone!

Masterton... gone!

Likewise, I was not too surprised that Whakatane was dropped. Rotorua and Tauranga airports are only an hour’s drive from Whakatane. Nonetheless Whakatane is the most hard done by port going from four weekday flights to none! Taupo’s proximity to Rotorua might have been the rationale of dropping the Wellington-Taupo service or are Taupo passengers to Wellington supposed to fly via Auckland? With Wanganui’s proximity to Palmerston North I thought that it might also have been chopped but it survived along with Hokitika and Timaru. One wonders whether these three ports will generate enough traffic for the long term.

Air New Zealand also announced the cessation of the Nelson-Palmerston North service and that the Hamilton-Palmerston North service would operate with a single Q300 flight each day. One wonders how long this service will last if the new schedule doesn't suit the business traffic.

There are other issues to be considered as well. Timetabling is going to be crucial. Talking about the Gisborne-Wellington route being operated by Q300s rather than Beech 1900s Gisborne Chamber of Commerce’s president Trevor Helson told the Gisborne Herald, there were still details to be ironed out, including flight frequency. “This is clearly a big step forward. The next step is to see it actually happen and make sure we get the right flight frequencies and times. Flights at 10am and 2pm do not help us very much because we are not going to keep three to four flights a day — it will drop to two!” Timaru, Hokitika and Wanganui will have similar concerns if schedules do not suit business traffic. Time will tell as Air New Zealand sorts out its schedules

So what about the replacement air services?

East Bay Aviation has announced its intention to operate Whakatane-Auckland services using a  12- to 14-seater aircraft. “We think we can operate that size aircraft quite economically so that’s probably where we would be heading.” East Bay Aviation intends to just operate a single sector – perhaps they could rename themselves Bell Air! Bell Air certainly had a loyal following from Whakatane residents and the size of the town with the right aircraft could conceivably be quite profitable.

For more see http://3rdlevelnz.blogspot.co.nz/2014/11/another-whakatane-contender.html

Sunair has also announced its intention to operate twice daily Whakatane-Auckland and Kaitaia-Auckland services. Sunair’s Dan Power told Whakatane radio station 1XX that it is interested in servicing Whakatane Airport with “a 12-seater Cessna Caravan along with ten Piper Aztecs.” Sunair already has a long history of operating an extensive North Island network and recently announced its intention to inaugurate Auckland-Great Barrier Island flights from Ardmore airport. To date Sunair has never operated a turbo prop aircraft.

For more see http://3rdlevelnz.blogspot.co.nz/2014/11/sunairs-proposal-for-whakatane-and.html

Sounds Air already operates an excellent service from across Cook Strait and from Wellington to Wanganui. They have recently announced the purchase of a fifth Cessna Caravan and the introduction of a new service between Blenheim and Paraparaumu. Sounds Air's managing director Andrew Crawford is in talks with authorities in Westport about flying a Westport-Wellington route and he indicated there was also potential for Sounds Air to pick up the Nelson-Palmerston North service and to fly a Nelson-Paraparaumu service. However, he also acknowledged that flying to Westport was complex because of mountains, weather and distance.

For more see http://3rdlevelnz.blogspot.co.nz/2014/11/sounds-air-eyeing-up-new-routes.html and http://3rdlevelnz.blogspot.co.nz/2014/11/new-service-for-sounds-air.html

Of course it is early days… One wonders whether Vincent Aviation would have put its hand up to operate some services if it was still operating. To date Air Chathams, Great Barrier Airlines, Fly My Sky and Inflite Charter have not put their hands up to operate a service. Certainly Air Chathams and Inflite Air Charter have the capacity to offer services with pressurised turboprops. So what will the various centres be looking for?

Looking for work... Air Chathams' Fairchild Metroliner III ZK-CIC

Westport, Whakatane, Taupo and Kaitaia will want prime time services that will offer business people flights access to and from their towns to Wellington for Westport and Taupo and Auckland for Whakatane and Kaitaia. Whakatane is already used to such a service with an Eagle Air Beech 1900 overnighting there. Westport and Kaitaia's current flights are good for business people flying into the towns for the day but are not so convenient for those flying out. They too will be looking for an overnighting aircraft. But this means a plane sitting at Westport, Whakatane and Kaitaia all day. Whakatane might sustain additional flights to Auckland but I doubt Kaitaia and Westport would so this is not a good situation for prospective airlines.

Looking for work... Inflite Charter's BAe Jetstream 32s, ZK-ECI and ZK-ECJ

Similarly Palmerston North-Nelson and Palmerston North-Hamilton services probably need twice daily services at prime times to capture the business traffic. Then there are the other centres that get a much reduced Q300 service. Will there be a need for an early morning/evening return business flight for Timaru, Hokitika, Wanganui and Gisborne? And I really do believe a Masterton to Auckland and an Oamaru to Wellington could work if the airline concerned could offer a good business schedule with a Sounds Air type formula, that is, a very reliable airline with relatively cheap fares offered all the time. But with daily business schedules from these centres there is a problem…  what would the plane do for the rest of the day? Aircraft sitting idle don’t make money and competing against Air New Zealand is not a wise option either.

Sounds Air have proved Cessna Caravans are a good reliable platform for their short haul sectors. However, they are unpressurised and therefore they are not ideal for services to the likes of Wellington-Westport and Wellington-Taupo. Pressurised aircraft are generally more expensive to buy and have higher operating costs which, in turn, will mean higher fares. To pick up these routes Sounds Air might have to think of another type or alternately another operator might consider these routes.

Looking for work... Sounds Air's latest acquisition, Cessna Grand Caravan N771AL destined to become ZK-SAW and currently on its ferry flight to New Zealand. An ideal machine for Cook Strait flights and for Kaitaia and Whakatane

All in all Air New Zealand’s move raises opportunities for regional airlines to develop new services. But the history of NZ regional airlines is littered with companies that tried and failed. The airlines looking to offer replacement services will have a lot of homework to do over the next few months. The towns affected will need to be reasonable in what they expect while the airlines will need to be careful in what they offer.  

So these are my thoughts, what are yours???