24 August 2019

The age-old question of competing with the national carrier





This is an interesting article that once again raises the age-old question of competing with the national carrier. 

This blog records the history of airlines that have tried to compete with the national carrier (and have failed) and those who have found a niche.

Of course there are those who will knock the national carrier - but they, like any airline, have to make a profit. And a small airline using small aircraft can't offer the same sort of fares. 

So is there a solution to a competitive regional air service???


Jetstar pulling its Hawke's Bay service would be a "disaster", claims one Hastings District Councillor. Speculation is swirling that Jetstar may stop regional services, including Hawke's Bay, after it was revealed the carrier is making a loss on provincial services. Simon Nixon, who has been a longtime advocate for better air services into the region, said Jetstar pulling Hawke's Bay flights was one of his worst fears. "If it happens it will be a disaster. My experience of Air New Zealand is, given a monopoly, they will exploit it for all it's worth." He said there had been a 50 per cent increase in passengers at Hawke's Bay Airport since Jetstar introduced flights to the Bay in late 2015. "The numbers are about quarter of a million extra passengers." He said Hawke's Bay is isolated, and in order to compete with other cities around New Zealand for events such as conferences, the airport needed to remain competitive. "Like it or not, you're pushing it to do five hours to Auckland, six or seven is probably a better estimate, four to Wellington." "We're competing with places like Rotorua, from Auckland you can get there in maybe two hours." He said councils need to be looking at the issue and come up with a strategy to make sure it doesn't happen. "And we need to be talking to New Plymouth, Whanganui and Nelson as well, all of whom could be similarly affected." Air Napier chief executive Shah Aslam said he was watching the situation with interest. Currently Air Napier flies between Napier and Gisborne, with plans to do more region-to-region flights in the future. Aslam said if the space opened up for them to fly between Napier and Auckland, which is the current Jetstar route, it is definitely something they would consider. Flights would not be as cheap as the current Jetstar flights however, as Aslam said they were not looking to make the same mistakes. He said they wanted to focus more on customer service, rather than offering cheap flights around the $30 mark. Nixon was sceptical about the ability for a smaller carrier to compete with Air New Zealand. "The whole history of Air New Zealand is if a weaker competitor arises on the scene they just put them out of business. "They either buy them out, as they did with Air Nelson and other small airlines ... or alternatively they drive them out of business."

22 August 2019

Loss Making Regions



Budget carrier Jetstar is "loss-making" on its regional services in New Zealand and "market conditions are being monitored closely," parent company Qantas told investors today. Regional flights are defined on the Jetstar NZ website as services to Napier, Nelson, New Plymouth and Palmerston North, raising the spectre of service cuts to regional centres of a similar kind to those that have landed national carrier Air New Zealand in political hot water in the past. The Qantas results, released to the Australian Stock Exchange this morning, offer no other detail on New Zealand services. Air NZ, which claims around 80 per cent of the domestic travel market, has in the past suggested that Jetstar - which also services the main centres and Queenstown as well as flying the Tasman - makes no money in New Zealand. The Qantas group result bore similarities to the earnings announced earlier today by Air NZ, in that both airlines saw profits dented by a combination of higher jet fuel costs and softening demand for both domestic and international travel. 

A 100,000 passenger airline



Provincial airline Sunair Aviation has recently celebrated carrying its 100,000th passenger and it happened on a flight from Gisborne to Hamilton. The milestone comes after 34 years in the aviation business for the company. “It’s a feat that is not easy to come by for a regional domestic airline,” said Sunair managing director Daniel Power. The company started with one aircraft and has now grown that into a fleet of 10 Piper Aztecs. “For 22 of those 34 years Sunair Aviation has called Gisborne one of its most popular destinations, and is one of the airline’s bases,” Mr Power said. It also operates a base in Whangarei, with its main base in Tauranga. “We’re very proud to reach an achievement like this as a privately-owned operator. “We’re fortunate to have a team of highly-trained pilots, engineers and administrators to continue the growth of the company. “We look forward to offering the same great airline service to our passengers for years to come,” Mr Power said. Sunair operates five days a week offering same-day return flights to both Tauranga and Hamilton from Gisborne. “The route is an essential and popular link for the numerous Gisborne enterprises that conduct business or connect in the Waikato and Bay of Plenty. “It is also popular with leisure travellers and, by linking with Sunair’s other services, offers a gateway to the Coromandel, Great Barrier Island and the Far North.” Mr Power said by tapping into a niche in the market for air travel, Sunair had been able to offer direct flights to locations that larger airlines cannot. “This combined with a flexible flight schedule has meant we have maintained a safe service to the regional cities over more years than any other privately-owned operator.” Sunair has also obtained status as an approved, preferred air operator for “All of Government” personnel issued by the Ministry of Business, Innovation and Employment (MBIE) in Wellington. “After going through a tender process, 12 months of due diligence, a 50-page questionnaire and multiple trips to Wellington, we are very proud of that achievement.”


21 August 2019

Air Service One Year Old


Kāpiti Coast District Council and Air Chathams have today celebrated a year of flying Kāpiti skies. The airline, which undertook its first commercial flight from Kāpiti on 20 August 2018, has welcomed over 40,000 passengers on approximately 1472 flights travelling between Auckland and Paraparaumu over the last 12 months. Kāpiti Coast Mayor K Gurunathan says the encouraging statistics are testimony to the value the region places on a direct flight service through to Auckland. “It’s clear that Air Chathams is building a strong and loyal customer base that is benefiting from the comfort and convenience of this regional connection,” says Mayor Gurunathan. “Keeping Kāpiti connected and accessible through this service strengthens business and family networks and bolsters our visitor economy. Our District’s share of regional and national tourism has been increasing by 10-15% year-on-year over the past three years and this service enables us to continue that momentum.” Duane Emeny, Air Chathams General Manager says the airline has received a warm Kāpiti welcome and has enjoyed meeting its new customers over the last year. “We’d like to extend a great big thank you to all our passengers as they’ve journeyed along with us as we’ve found our place on the Kāpiti Coast,” says Mr Emeny. “As a family-run business built on our involvement in the communities we serve, we’ve heard first-hand how our service is bringing together friends, families and businesses. We think that fits our business goals perfectly.” In 2018, the Council agreed to support Air Chathams through the ‘Fly Kāpiti’ campaign to aid in promoting the service. Council’s $50,000 investment in marketing was supplemented by initial support from Air New Zealand and Kāpiti Coast Airport, which offered Air Chathams a free terminal lease for the first year, along with other ongoing discounts on operating charges. Today’s milestone was celebrated with a birthday cake for passengers and key supporters at the Kāpiti Coast Airport. 

Source : Kapiti District Council Press Release


18 August 2019

Whisper Jet departs



Departing Auckland yesterday to return home to Bankstown in Australia via Sydney was BAe 146-200QC  VH-SAZ which has been operating services between Auckland Christchurch on behalf of Parcelair to cover two of its Boeing 737-400s while they were having air frame checks.   

The first flight from Auckland to Christchurch was operated by BAe 146-200QC VH-SAZ (callsign Pionair 31) on 10 July 2019 and the final flights were operated Auckland to Christchurch as Parcelair 31 on 16 August 2019 and Christchurch to Auckland as Parcelair 32. 

Thanks to Abarth 695 for these great photos of the Whisper Jet on departure for Sydney.

 BAe 146-200QC VH-SAZ at Auckland on 17 August 2019
 



14 August 2019

A Sad Adieu to MRC Aviation



It is with great sadness that 3rd Level New Zealand farewells the MRC Aviation blog, the first of the three sister blogs that record current aviation news and preserve it for posterity.

Mike was instrumental in the formation of both the NZ Civil Aviation blog and this blog. He is a friend to many in aviation circles in New Zealand and has done so much to preserve the aviation history of the last thirty years. He will be sorely missed.

I would like to acknowledge Mike's help for so much help in this blog and our friendship that goes back to Hokitika days. So it is with sadness a bid adieu to MRC Aviation and to Mike later in the year.

All the best to you Mike and the all the whānau in your new adventure 



13 August 2019

Nomads for Sale



Currently being offered for sale by Oceania Aviation are Air Safaris two GAF N24-A Nomads NZ-NMD and ZK-NME. The advert states "these twin-engine Utility/Commuter aircraft with its impressive short takeoff and landing capabilities are on the market and ready for their new home. With a window for each passenger and a large side door for easy freight loading, this aircraft is ideal for a small tourism operation or parachute operation with the large side door. With the low capital cost, there is a good return on investment. Both aircraft come with a huge spare parts inventory. Buy one or buy both - you won't want to miss out."


Air Safaris has operated Nomads since 1981 when the company introduced two GAF N22 Nomads, ZK-NOL and NOM. These were later replaced by larger GAF N24 Nomads with ZK-NMD/1 being registered to the company in late October 1985. Over the years the company has operated six of the N24 model Nomads, ZK-NMC, NMD/1 NMD/2, NME, NMG and NMH. These were primarily used for tourist work but they were also used for an air service between Timaru and Christchurch on behalf of Air New Zealand.


ZK-NMD and ZK-NME are the last flying Nomads in New Zealand. I'm a little annoyed I never got to fly in one!

GAF N24 Nomad, ZK-NME at Timaru on 21 November 1991.


11 August 2019

Peninsula Air Travel




After the Midland Air Services link to the Coromandel ended in early 1963 two parties moved to fill the void to provide a service for the region. With his job with Midland over, John Munro set about seeking financial backing for a replacement service. This was forthcoming from Gordon McCallum of Manurewa and Bob Ross of Papakura who both owned property in Mercury Bay. Munro, as trustee of the yet to be formed company provisionally known as Whitianga Air Travel Ltd, filed an application for an Air Services Licence. Members of the Mercury Bay Aero Club, and the local community also believed the basing of an air service at Whitianga was essential.

By mid 1963 the Aero Club set about seeking its own Air Transport Licence. Within the small community tension developed between the two groups with their rival proposals. Some potential investors in the Munro led proposal withdrew once they learned of the Aero Club's plans. The applications were set down to be heard by the Licensing Authority in a two day public hearing held at the Fire Brigade Hall in Whitianga on 5 and 6 November 1963.

John Munro's, still to be formed company sought a non-scheduled air service linking Whitianga, Whangamata, and Thames with Ardmore and Whenuapai. Also sought were air charter and air taxi rights (including scenic flights and joyrides) from Whitianga, Whangamata and Thames to any licensed aerodrome in New Zealand. These services were to be operated with a six seat Cessna 205. The right to use additional aircraft at peak times was also sought.

The Aero Club sought to operate an air charter and air taxi service (including scenic flights and joyrides) from Whitianga to any licensed aerodrome in New Zealand with one four seat Cessna 172D. Both groups sought support for their proposals. The Munro group's support included the Whangamata Settler's and Ratepayer's Association as its success would give Whangamata an air link. The Mercury Bay Aero Club had won the support of its sister organisation the Auckland Aero Club. Neither club wanted a potential commercial rival in the vicinity.

Both groups presented their proposals on the first day of the hearing, and negotiations between the two parties before the second day, arrived at a compromise. The new, and as yet unnamed airline, gained the rights for non-scheduled and air charter services, with the proviso that it base at least one aircraft at Whitianga, and that the Mercury Bay Aero Club be the first party approached should an additional or replacement aircraft be required. The Aero Club won rights for scenic flights and joyriding from Whitianga, and if it had the consent of the new airline, air charter services from there also.

Peninsula Air Travel Ltd was chosen as the name for the new company, and arrangements were made with Aircraft Hire (NZ) Ltd of Masterton for the lease of Cessna 205 ZK-CFF. Air services certificate No.93 was issued on 20 December 1963. Services began prior to Christmas and a high frequency schedule was operated over the busy holiday period. The aircraft was fitted with racks so that paper drops, similar those previously operated by Midland, could be made at Coromandel, Colville, Hahei, Tairua, and Whangamata. The aircraft could also be equipped as an air ambulance.


Peninsula Air Travel's Cessna 205 ZK-CFF at Christchurch

Relationships between the two operators were soon ruffled again. In March 1964, the Aero Club complained to the Licensing Authority that Peninsula was using Cessna 172 aircraft hired from Executive Air Travel Ltd (a subsidiary of the Auckland Flying School Ltd), to fly passengers into Whitianga on its behalf. Peninsula in turn accused the Aero Club of operating in quasi-commercial opposition by allowing members to hire the club's Cessna for friends to fly to other centres, even if the hirer did not actually fly in the aircraft.

Matters came to a head at the end of June, when Munro withdrew the hired Cessna 205 from Whitianga because of mounting financial losses. The long-off peak season, and aircraft lease payments which continued whether the aircraft was used little or often, had proved too much for the company to sustain. In its place Peninsula arranged with Executive Air Travel Ltd to offer a replacement service with Cessna 172 aircraft, but this involved the aircraft being based at Ardmore, not Whitianga as the licence required. Peninsula's licence also required the company to use the Aero Club's Cessna 172 as the first alternative, if it was to operate an aircraft of this type. To avoid additional losses to the company, the aircraft would from then on operate only if it had a minimum of two booked passengers. So Whitianga was without a locally based licensed aircraft for emergency use, and had seen its air service disappear once again because the licensed commercial operator could not sustain profitable operations. The hiatus continued for several months with the service only being flown when at least a break-even load was available. By August 1964 both the Mercury Bay Chamber of Commerce and the Whitianga Town Board had passed resolutions seeking a review of Peninsula's Licence.

To resolve matters a three-day sitting of the Air Services Licensing Authority was held in Whitianga from 3 to 6 of November 1964. The Authority, after hearing the evidence, stated, "This Authority is not generally favourably disposed to an Aero Club being in possession of a commercial licence." However it granted the Aero Club non-scheduled rights for services between Whitianga, Thames, Ardmore and Whenuapai, and air charter rights from Whitianga, with one Cessna 172 aircraft and one additional aircraft of similar capacity. The application from Peninsula Air Travel to use a Cessna 172, based at either Ardmore or Whitianga as an amendment to its licence, was declined.

F B Gavin, ‘The Coromandel Connection’ in Taking Off by Richard Waugh, p.103-106


07 August 2019

air2there Asset Disposals 2



Following on from the post earlier this week on air2there's assest disposals Simon has sent in this picture of the hulk of their Cheiftain, ZK-MYS, which was scrapped last year and sitting in a house movers yard at Waikanae but is now at the Foxpine airfield at Foxton. MYS was removed from the fleet before the airline went into receivership

The hulk of Chieftain ZK-MYS at Foxpine on 4 August 2019





06 August 2019

Post updates

For those who keep copies of the airline profiles in recent days I have updated the following profiles - the additions come to end of the posts...

Air Chathams
http://3rdlevelnz.blogspot.com/2016/01/air-chathams-30-years-on.html
incorporating the Whanganui ATR operation

Barrier Air
http://3rdlevelnz.blogspot.com/2015/08/barrier-air-new-name-to-barrier-and.html
incorporating the extended Kaitaia service

Fly My Sky
http://3rdlevelnz.blogspot.com/2011/11/fly-my-sky.html
incorporating the end of the Whangarei service

Sounds Air
http://3rdlevelnz.blogspot.com/2014/08/sounds-air-fast-scenic-way-to-cross.html
incorporating Caravan ZK-SAW leaving the fleet

Sunair
http://3rdlevelnz.blogspot.com/2011/02/sunair-still-shining-25-years-on.html
incorporating extended services to Gisborne and Whangarei 

05 August 2019

Sunair's Weekday Business Flights


Sunair resumes weekday flights between Gisborne and Tauranga/Hamilton and Whangarei and Tauranga/Hamilton. The Gisborne flights will operate twice daily on each weekday with the Whangarei flights operating daily with a morning departure and evening return. The flights have been operating on Thursdays and Fridays since the 1st of April but from my observation there has not been a large uptake. Daily flights will offer a great appeal.

Before Sunair's ground the Gisborne flights were operating most days so I hope they can build their passenger base again.

04 August 2019

air2there Asset Disposals



From the Companies Office website I have found the following information on the disposal of the air2there assets... The receivers' report notes,


There is a cross guarantee dated 22 April 2013 to which Air Wellington Limited (In Receivership), Air2there.com (2008) Limited (In Receivership and in Liquidation), Kingair Limited (In Receivership) and Richard Charles Baldwin (Receivers appointed over specific assets) are a party. The level of indebtedness each entity may be required to meet under this agreement is unknown, although the total Group debt is $3.3m. 

Unsecured creditors are not expected to receive a distribution of funds.

In regards to air2there the receivers' report notes;

Air2there had three employees, all of whom were made redundant prior to our appointment. The Company records show a preferential claim of c.$40k outstanding to employees.


During the period covered by this report (23 November 2018-22 May 2019) we have realised the majority of the fixed assets owned by the Company, including IT equipment, office furniture, commercial kitchen equipment, a fuel tanker trailer, and miscellaneous aircraft parts. The receivers are still marketing the remaining fixed assets of the Company for sale.

In addition, the company owns 50% of the shares in J32 Leasing Limited. Discussions are ongoing with the other shareholder (Originair Ltd) regarding this asset.

A couple of people arrived at Paraparaumu today in Mooney ZK-CKF to check out Jetstream 32 ZK-ECI... is something about to happen with Originair???


In regards to Air Wellington the receivers' report notes;

During the period covered by the report (23 November 2018-22 May 2019) the receivership disposed of the 1997 Cessna 208B Grand Caravan (ZK-MYH) and miscellaneous aircraft parts and spares relating to the aircraft following a comprehensive sales and marketing process.

In regards to Kingair Ltd the receivers' report notes; 

Beechcraft King Air B200 ZK-MYM is located in Napier, and was subject to a workers lien along with aircraft parts and spares relating to the above aircraft and its engines. While no sale was agreed during the period covered by this report (23 November 2018-22 May 2019), a conditional sale and purchase agreement for the disposal of the aircraft was entered into subsequent to the reporting period. In order to satisfy the conditions of the sale and purchase agreement the receivers are overseeing maintenance on the aircraft to return it to an airworthy status. This maintenance is being funded through funds transferred from other entities within the group and with the approval of the major creditor. The receivers will seek to complete the sale of the aircraft, after which all property subject to the receivership will have been disposed of.