27 October 2015

Kiwi Regional takes flight

In late 2014 New Zealand’s announced its intention to withdraw from three regional ports in April 2015 and retire its Beech 1900 fleet in 2016. In the light of this move Ewan Wilson, famed for his airline Kiwi Air, announced in December 2015 his intention of re-entering the airline business establishing a new airline, Kiwi Regional Airlines. Joining Ewan in investing in the new airline were 2 Cheap Cars Ltd and Nicole Domett.

Early graphics before the airline settled on the Saab 340

A start-up date in late 2015 or early 2016 was announced in February 2015. The company announced its intention to establish its corporate headquarters in Hamilton and to obtain initially two and later a third Saab 340 aircraft . The most interesting feature of the company’s plans was their desire to offer flights to Auckland’s North Shore using the Royal New Zealand Air Force’s base at Whenuapai, though this was subject to RNZAF approval and other consent processes. Kiwi Regional also proposed to service Hamilton, Tauranga, Palmerston North, Wellington, Blenheim, Nelson, Queenstown and Dunedin. In the reporting of these announcements Ewan Wilson outlined the company’s philosophy. "Our name says a lot – regional New Zealand has been left off the air route map unless you want to travel to the three largest centres. We intend to complement existing offerings; to fill the gaps and to make travel between regional centres as fast and affordable as possible. We will not be competing directly with the national carrier. As well as improved opportunities for travellers, we expect our operations will create employment and tourism opportunities, and we are in consultation with relevant organisations in the different regions we will service about these opportunities."

The proposed route structure, February 2015

Defence Minister Gerry Brownlee rapidly squashed Kiwi Regional’s plans to operate domestic flights from Whenuapai saying the Government had no plans to revisit the decision and Whenuapai would remain operating as a military airbase only.

A constant feature of Kiwi Regional's newspaper coverage is Ewan Wilson’s prior involvement with Kiwi Air. In his response he stressed, “This time he would not be opposing the national carrier. Instead, Kiwi Regional Airlines would complement services already in place. Last time we lost that battle. The Ewan Wilson of today is someone who has learned a lot in the last 20 years. Kiwi Regional would buy its own aircraft... The financial backing was in place to do that. The only thing left from the Kiwi Air days is the fact that we've continued to use the name."

In May 2015 Kiwi Regional also indicated that Te Anau, Wanaka and Alexandra were on its radar for either regular charter flights or even scheduled services. At this time the company had an option to buy a Saab and in July it was announced that Kiwi Regional had purchased a Saab 340 from Poland with the aim of the airline being operational before the end of the year. With the purchase of the Saab a more modest network and schedule was announced with the company offering a twice daily Dunedin-Queenstown return service and four times a week Dunedin-Nelson-Hamilton return service with flights scheduled to start on the 27th of October 2015.

Route Map and Schedule effective 21 October 2015

Saab-Scania SAAB SF340A ZK-KRA (c/n 340A-065) arrived in Hamilton on the 1st of September 2015 and the Airline Air Operator Certificate was granted the following month. 

A proud Ewan Wilson with Kiwi Regional's Saab 340 ZK-KRA after its arrival
into Hamilton from Poland on 1 September 2015

Scheduled services between Dunedin and Queenstown began on Tuesday 27 October 2015 but the same day Kiwi Regional announced that it would reduce the frequency of the service to Queenstown to twice weekly operating on a Monday morning and Friday afternoon. The Queenstown service never generated passenger numbers and the Queenstown flights ended on 30 November 2015.

Saab 340 ZK-KRA on the ground at Dunedin on 26 October 2015 ready for the first day

Meanwhile the four times a week Dunedin-Nelson-Hamilton service commenced operations on the 28th of November 2015. The Saab operated return services on Mondays, Wednesdays, Fridays with a northbound service on Saturdays and southbound on Sundays. 

The arrival of Kiwi Regional's first flight into Hamilton on 28 November 2015

For a photo essay on a Kiwi Regional flight between Nelson and Hamilton see:

Saab 340 ZK-KRA pulls on to the gate at Nelson on 18 November 2015

On the 16th of February 2016 Kiwi Regional commenced twice weekly flights to Tauranga. The airline operated direct Saab 340 flights between Nelson and Tauranga on Tuesdays and Saturdays. Onward connections through Nelson to Dunedin were available on Tuesdays and northbound flights from Dunedin to Tauranga via Nelson on Tuesdays and Saturdays. The new schedule continued to see four flights a week between Nelson and Hamilton on Sundays, Mondays, Wednesdays and Fridays. Connections were available at Hamilton with Barrier Air services to and from Auckland, North Shore, Kaitaia and Great Barrier Island. Meanwhile the Dunedin to Nelson route extended to five flights a week, with northbound flights operating daily except Sundays and Thursdays and southbound flights operating daily except Thursdays and Saturdays. 

The only aircraft in the fleet Saab 340, ZK-KRA arrives at Tauranga on 15 March 2016

Timetable and route network effective 15 February 2016

In early March 2016 Kiwi Regional Airlines announced plans to raise up to $2 million through crowdfunding to buy a second aircraft. It was envisaged that the new aircraft would be a Saab 340QC which could be used for passenger and freight charters and as a backup for maintenance of its existing aircraft Saab 340A. Ewan Wilson said the fundraiser would be an equity crowdfunding campaign, meaning if the campaign reaches its target, pledgers would become shareholders. No crowdfunding platform had been chosen. "I find the idea of a community of New Zealand shareholders being a part of Kiwi Regional Airlines quite exciting." 

On the 29th of February 2016 Kiwi Regional announced a further expansion of services. Kiwi The airline announced that from the 14th of May 2016 an extra two flights a week would operate between Dunedin and Nelson giving a daily service between the two centres. The new flights were scheduled for Thursdays and Saturdays southbound and Sundays northbound with a stopover in Christchurch. Ewan Wilson was reported as saying the new flights should push the business into profitability and that in the last six months the airline had sold "well over 10,000 seats. The company's profitability was driven by its aircraft's use, or "how many hours we fly a year''. It had gradually added flights, as it approached the 1800 hours a year it needed. This final expansion is where we need to be to be profitable.'' The Dunedin to Nelson route, the longest route in the network, was not profitable as yet, "but we believe by adding Christchurch twice a week that it will become sustainable. We need that daily frequency to help grow the business. A lot of our feedback shows that organic growth will happen when you offer a daily service. If our current trends continue, our model shows we will break even after May 14.''

The proposed Kiwi Regional timetable and route map effective 14 May 2016

Eleven days before Kiwi Regional Airlines were due to start daily service and flights to Christchurch the airline announced that it would reduce its service to a "skeleton schedule network for the four months over winter" beginning from 1 June 2016. The Wednesday service will stop operating, and from June 13 the Monday service will stop. Ewan Wilson said, "We're a leisure airline. We don't compete for the corporate routes which are year round. We rely on family visiting family and going direct region to region, and that is clearly seasonal." He says the company are just reacting to what the market wants --  a reduction in winter and ramped-up service over summer. Mr Wilson says the decision is not a sign of any trouble for the carrier, just a seasonal adjustment to the schedule. "Kiwi is operating and will continue to operate, and will adjust the schedule due to seasonal peaks and troughs. In our schedule post October our intention is to operate 7 days a week. We have had a very good first summer and know we'll have an even better second summer." 

When the 2016 winter schedule was finalised the airline reduced its schedule to four flights a week between Nelson and Dunedin on Sundays, Tuesdays, Fridays and Saturdays, twice a week between Nelson and Hamilton on Sundays and Fridays and twice a week between Tauranga and Nelson on Tuesdays and Saturdays. 

The winter schedule, 2016. 

On the 17th of June it was announced that Air Chathams had purchased Kiwi Regional Airlines' Saab 340A aircraft and were to offer employment to the majority of Kiwi Regional Airlines' full time staff with services to end with the Dunedin-Nelson-Tauranga service on the 30th of July 2016. Kiwi Regional Airlines passengers booked on flights after that received full refunds or were offered alternative travel on flights before that date. Kiwi Regional Airlines' charters flights with school groups in August and September would still operate. Kiwi Regional Airlines CEO Ewan Wilson said Kiwi had "a choice to either expand by adding a second aircraft to our own fleet, guaranteeing reliability of service, and splitting the very high compliance costs; or be absorbed into a larger player."

Saab 340 ZK-KRA on approach to Hamilton on 26 June 2016
ZK-KRA backtracking to the terminal at Tauranga on 22 July 2016

Saab 340 ZK-KRA operated its last flight for Kiwi Regional on Tuesday the 26th of July 2016 flying KRL 8 from Dunedin to Nelson and Tauranga. It then ferried to Auckland. Meanwhile Air Chathams' Fairchild Metroliner ZK-CIC operated the southbound return service to Dunedin, the final flights from Dunedin and Nelson to Hamilton on the 29th and the final air Dunedin to Nelson and Tauranga service on the 30th of June 2016. 

Kiwi Regional Airlines was always going to have a difficult task to establish itself on inter-regional routes steering clear of direct competition with Air New Zealand. There were some he decried its failure. But, as Max Christoffersen wrote in the Waikato Times, If the passengers have not been left behind, if Wilson's staff have been placed in new employment with Air Chathams and the only ones to lose money were the airline shareholders, then this is a carefully controlled belly landing with no public casualties. This is actually a company that had a soft landing and should be admired in the way it has been managed into a takeover from a more established player. 

Kiwi Regional gave it a good go but nine months after take off it is now added to the list of New Zealand domestic airlines that didn't make it.

1 comment:

  1. Oh god I hope they fly to Te Anau. Something the town needs. Seriously though, they have basically stolen my airline and livery for a fictional airline (which is just AI atm) I have going in FSX. Well...