Kiwi International Airlines - The Airline of Choice

Kiwi International was airline founded by Ewan Wilson and three colleagues. An issue of "Kiwi in Flight", the airline's inflight magazine reports, Wilson was only 28 when he persuaded three colleagues to toss $1000 each into the pot and join him in a charter flight venture. The three friends were Pat Pruett, a travel agent from the United States, Mike Tournier an air traffic controller and Mike Park, an Air New Zealand pilot. Mike Park resigned as a director in 1995 because of a conflict of interest - he was flying for Air New Zealand. In August 1996 Mike Tournier, walked away from Kiwi, citing "differences." Ewan Wilson, however, was the man with the vision, the energy and the main face of the airline. He had a dream and many flew with it! In many ways the Kiwi story is his story.

Ewan Wilson was born in Timaru in 1966. From a young age he had a passion for flying and while this didn’t get him a long term job as a pilot this passion for flying and getting people flying led him to found Kiwi International Airlines, an airline that despite its challenges and troubles revolutionised trans-Tasman travel and also travel into the Pacific.

Ewan was first introduced to the travel agency industry in Canada in the late 1980s. After moving back to New Zealand he established his own travel agency, Kiwi Travel International (NZ) Ltd. in Hamilton and on the 31st of October 1990. From this a subsidiary charter operation, Kiwi Travel Air Charters Ltd, was incorporated on the 24th of February 1993.

Kiwi Travel Air Charters first attempt to get airborne was for the annual Fieldays’ agricultural event at Hamilton in 1994. Kiwi Travel Air Charters organised daily services from Auckland and Wellington “in a specially chartered and lavishly restored DC-3. Flight attendants wearing 1940's uniforms will offer chocolates, canapes and champagne during flights.” A champagne luncheon flight was also been scheduled. While the idea was good it didn't really fly and only one flight from Wellington to Hamilton was flown in Pionair’s Douglas DC-3 ZK-AMS.

In May 1994 Kiwi Travel International, through its subsidiary, Kiwi Travel Air Charters, announced plans to operate four charter services between Hamilton and Brisbane staring on the 30th of August 1994 using a Boeing 737-300 from Samoa’s Polynesian Airlines. Flights were also planned for the 7th, 21st and 27th of September. The travel company said, “Taking advantage of the flights will mean holidaymakers can be on the beach in Queensland three hours earlier than using conventional flights out of Auckland - and remove the dread of getting up before dawn and driving 100 kilometres plus. An added bonus is cheap, secure car-parking at Hamilton airport available for $2 inclusive compared with Auckland's $9 a day charge to park in an unsecured public area. For international travellers using Hamilton there is only a one hour prior check-in requirement compared to the two hours in Auckland.” Also available was a package which includes door-to-door transport with shuttles from Tauranga and Rotorua and limousine transfer from Hamilton city to the airport. This package incorporates luxurious 'absolute beach front' accommodation. Limo transport and shuttle services is part of this package for the return trip. The service across the Tasman offers full beverage and meal facilities with in-flight movies.” Kiwi’s fares offered a $100 saving on comparative high season Air New Zealand and Qantas flights from Auckland to Brisbane, up to $200 on a seven night’s accommodation package and $350 on a stand-by basis.

  

Gaining certification to operate the charter flights was relatively easy. In his book of the Kiwi International story, Dogfight, Ewan Wilson recounts, I called the Ministry of Transport and, surprisingly, it was straightforward. The carrier we were going to rent or lease the aeroplane from had to make the application. As long as the carrier already flew out of New Zealand to Australia they would have all of the relevant CAA licences. Then there was the matter of getting passengers. Kiwi Travel’s charters were a new concept of travel in New Zealand. Local travel agents were sceptical of the possibility of success and customers would walk into Kiwi Travel office with stories that other travel agencies had told them the venture would not work. To add to this, when Ewan Wilson had opened his Hamilton travel agency he had got offside with his competitors partly by his aggressive undercutting of fares and so he felt as if they were not supporting his concept.

Within a month the flights were 60 per cent booked. Ewan Wilson was reported as saying, When the first school holiday charter plane flies to Brisbane on August 30 it will signal the end of the "bad flying years" for Hamilton, Mr Wilson says. "For too long Hamilton has been treated as a provincial centre and Waikato people have had to do without the international flights their region deserves."

Ewan Wilson was a man of dreams, in the good sense of the word. He foresaw possibilities. He could see Hamilton becoming the flight charter capital of New Zealand, pioneering cheaper and better overseas flights. To that end, by August 1994, even before his first international air charter had flown, Ewan delivered an ultimatum to Hamilton Airport: “Build an international departure lounge next year, or lose our services to Auckland.”

However Kiwi’s first challenge was brewing. The memorandum of understanding Kiwi had signed with Polynesian Airlines meant the four charter flights would operate on a Tuesday to fit in with Polynesian’s schedule which wasn't the best day for the proposed charter flights. In Dogfight, Ewan Wilson he writes, A fax came in from Air Nauru, offering their Boeing 737-400 on Sundays which was a much better day to operate charters on. We looked at the bookings and saw we had five bookings for the Tuesday flights. We decided that the last thing we wanted to do was disrupt those five passengers so we decided to stick with Polynesian. We faxed back to Air Nauru back saying, “No thanks.” It was an unfortunate decision.

In August 1994 there were serious rumours about Polynesian Airlines’ viability and ability to remain airborne. Eleven days before the first flight, Polynesian Airlines “repudiated” its contract to operate the Kiwi Travel International charter flights. Ewan Wilson said that bombshell was followed by four days of furious negotiating with other airlines before Air Nauru stepped in after gaining permission from the president of Nauru for the national airline to operate the flights. Air Nauru’s manager, Neville Hill said, “We felt bad about the way Polynesian had left Kiwi Travel in the lurch and have stepped in." Meanwhile Ewan Wilson said he planned to sue Polynesian Airlines for breach of contract and return of Kiwi Travel's $10,000 deposit. "We feel we've been given false assurances about Polynesian's ability to complete the contract it entered into, not only by the airline but also by the Western Samoan Government." Back-up arrangements with Air New Zealand and Qantas also fell through, Mr Wilson said. "On Tuesday we were just hours away from having to cancel all the flights with only 40 seats out of 500 unsold. Both Air New Zealand and Qantas had promised to help us if Polynesian failed to come through but when it came to the crunch they wouldn't do so." The focus then turned to reschedule hundreds of travellers as Air Nauru could only operate the flights on a Sunday. Hundreds of people had to be rescheduled! Air Nauru proved to be a good operator and a real saviour for Kiwi over the next couple of years.

On the evening of the 27th of August 1994 Air Nauru’s Boeing 737-400 C2-RN11 landed at Hamilton on the eve of the first Kiwi Travel International charter flights. The following morning, the 28th of August, the Air Nauru Boeing 737 flew the first charter flight from Hamilton to Brisbane and return Hamilton. 130 passengers flew on the first flight from Hamilton to Brisbane and 80 passengers arrived on the first return flight. Passengers arriving in Hamilton on the Sunday evening were greeted by Hamilton Mayor Margaret Evans and Waipa Mayor Bruce Berquist. The 737 then positioned back to Auckland to pick up its normal schedule the following day. The charter flights were operated by both of Boeing 737's C2-RN10 and C2-RN11.

Air Nauru's Boeing 737-400 C2-RN11 at Hamilton on 15 April 1995. It carries Kiwi Travel Air Charters' titles below the last U in Nauru

In Dogfight, Ewan Wilson has a great story about his relationship with Air Nauru. The flights operated, and the Air Nauru cabin crew were lovely, but they were not terribly efficient. I mean, I love Air Nauru, and I love the people, and I have a lot of time for them. Air Nauru is the flagship for the country and is not a money-spinner. It has lost millions and millions of dollars. But it didn’t seem to worry them, because Nauru had an endless supply of cash. They were used to flying around the Pacific with no passengers on board. Suddenly, with us, they had full flights. The flight attendants found it really hard. On one of the sectors we found one of the flight attendants sitting in the back of the aeroplane asleep, because she just found it all too much. By the third flight we insisted on putting our own in service directors on board.

By mid-September 1994, even before the four charter flights were complete, Kiwi Travel Air Charters was expressing its hopes and plans. It hoped for a new arrivals hall at Hamilton Airport by May 1995. It was also looking at having its own aircraft by 1996. In the meantime, Ewan Wilson said, Kiwi Travel will continue to lease aircraft from Air Nauru for its charter flights. The longer-term option, however, is to lease an aircraft directly from plane manufacturer Boeing for the three-month peak holiday charter season. "We would then staff the plane with New Zealand pilots and hostesses and it would bear our kiwi logo and a livery of white with horizontal blue stripe." The air charter company was also announced its plan to operate flights in December 1994 and January 1995 to Brisbane and Coolangatta in Queensland and to Apia in Western Samoa. Looking further into the 1995 he said, "Hamilton is our base and we intend to fully meet customer demand from the Waikato." The 1995 Australian destinations include Cairns, Rockhampton, Townsville, Brisbane and possibly the Whitsunday Islands. Meanwhile to cover the higher cost of hiring Air Nauru planes Kiwi Travel has lifted its charter fares to $799 (children $599). This compares with $849 for a comparable Air New Zealand fare.

Within two weeks the shifting sands had changed the narrative. Civil Aviation and Customs had advised Kiwi Travel that Hamilton airport had to be brought up to full international standards if it intended operating more than four flights a month so that Hamilton staff could be recruited and trained, and computer terminals installed all on a full cost-recovery basis through landing charges. Even before the Hamilton Airport’s board of directors had met to discuss this Kiwi Travel were talking of flying from Auckland instead. Unless Hamilton Airport learns to make new ventures more welcome, it will continue to lose out on international and domestic flights it has the potential to attract, said Ewan Wilson, angered by what he sees as "lack of any real help and co-operation." 

Air Nauru was again used to operate four charter flights from Hamilton to Brisbane over the December-January holiday period. In addition two flights were flown from Auckland to Samoa and Tonga. The Brisbane flights were not as well patronised as the earlier charter flights with flights to Brisbane being not well patronised. The flights from Brisbane proved much better with New Zealanders living in Queensland returning home for Christmas.

Emboldened by what they had learned Kiwi advertised a new series of charter flights from Hamilton using Air Nauru's Boeing 737s. Kiwi's advertising showed flights each Sunday from the 9th of April 1995 until January 1996. In April four flights were offered to Coolangatta. In June four were offered to Cairns, with two of them including Townsville. In both May and August three were offered to Rockhampton. In addition to these flights to new destinations 32 flights were offered to Brisbane. 

Source unknown - ca Apr 1995

At the time Kiwi revealed its intention to fly from Hamilton to Sydney and Norfolk Island later in 1995. Ewan Wilson also said Kiwi was about to sign up for its own BAe 146-300 whisper jets. Ewan Wilson also said he hoped to increase Hamilton-Brisbane flights to twice a week when Kiwi got a licence. It planned too many flights this year to qualify any longer as a charter operation. 

In late May 1995 Kiwi applied for its international airline licence. Monique Wilson, said the licence would give Kiwi Travel Air Charters the same status as Air New Zealand. "We will be no longer a charter operation, but an airline."  With Air Nauru’s 737 being only available of Sundays Kiwi Travel Air Charters signed a memo of understanding with Australia's National Jet Systems for the lease of a Boeing 737-300 “to be crewed by Hamiltonians and based in the city.” Kiwi Travel had been planning to start scheduled trans-Tasman flights in December 1995 but the agreement with National Jet accelerated plans the company’s plans and moved forward to an August start date. 

The airline proposed to operate;

❑ Sunday: Hamilton-Brisbane-Hamilton.

❑ Monday: Hamilton-Christchurch-Dunedin-Brisbane-Dunedin-Christchurch-Hamilton.

❑ Wednesday: Hamilton-Sydney-Hamilton.

❑ Friday: Hamilton-Brisbane-Hamilton.

❑ Saturday: Hamilton-Sydney-Hamilton.

However, in mid-June Ewan Wilson was reported as saying the Civil Aviation Authority had refused to allow Kiwi to operate domestically. In its response the CAA said it demanded a more detailed examination of a foreign-based operator applying to run domestic services and that it had received no application from Kiwi or National Jet for the certification enabling domestic services. While this was initially seen as a setback the airline soon changed their schedule to offer additional flights from Hamilton to Brisbane and Sydney. The airline also set a 27th of August start date. As it moved towards international airline status the name was changed from Kiwi Travel Air Charter Ltd to Kiwi Travel International Airlines Ltd on the 9th of June 1995.

In early July, as it looked towards it starts date, Kiwi announced a joint-venture daily commuter air service with VIP Air Charter which was aimed at connecting New Plymouth and Gisborne people to Kiwi's international services from Hamilton.  

Air New Zealand was also ramping up its own competition and it warned Kiwi to stop using its registered "piggy back fare" phrase in advertisements. Air New Zealand spokesman David Beatson said Kiwi was taking an aggressive stance and had to be taken seriously.

A setback hit Kiwi when National Jet couldn’t guarantee the availability of its Boeing 737 due to commitments with Qantas. The search for a new aircraft lead Kiwi Travel International Airlines to the United States and the lease of a Boeing 727-200 from Georgia-based Av Atlantic. The 727 had a bog positive and a big negative. On the positive side, the larger Boeing could accommodate an additional 50 passengers more than the 737; on the negative side, it was not able to operate direct trans-Tasman services from Hamilton and so a technical refuelling stop was going to be necessary in Auckland.

Three weeks out before the launch of services the Brisbane flights were full but the Sydney flights had extremely low bookings, even down to single figures. Kiwi’s response was to introduce a no frills "peanut and cola" class. Passengers would not receive a meal or bar service but would save up to $180 on the airline's standard economy fares. Ewan Wilson said about 50 of the 173 seats at the back of its Boeing 727 aircraft would be separated from other passengers by a cabin divider. No seat allocations would be made, so the 50 booked in "peanut and cola class" would take their places on a first-come, first-seated basis. The promotion was an instant success. Within 24 hours the airline had sold hundreds of its "peanuts and cola" class return tickets between Hamilton and Sydney. Air New Zealand and Qantas said they had no immediate plans to counter the service, but An Air New Zealand representative, Mr David Beatson, said Air New Zealand would monitor the deal's popularity.

Source unknown

NZ Herald, 15 August 1995

On the 11th of August the NZ Herald reported that Kiwi Travel International Airlines “has won approval to operate as New Zealand's second international airline. Kiwi Travel will get an international air service licence from the Ministry of Transport when the Civil Aviation Authority has approved its United States-sourced Boeing 727-200 aircraft.”  The licence allowed Kiwi International to fly an unlimited service to any of Australia's international airports. The catch in the announcement was that the CAA had not approved the Boeing 727 for service and three days later the Authority told the Commerce Commission that Kiwi “may not receive vital safety certificates in time for the scheduled commencement of its cheap flights.” In turn the Commerce Commission told the airline that it may have breached the Fair Trading Act by selling tickets for flights which could be grounded. A director of Kiwi Travel, Mr Patrick Pruett, was outraged that details relating to the airline's operation had been passed to the Commerce Commission. "Regardless, the aircraft is not in breach of any safety regulations and we are confident the flights will go ahead as planned," he said.

By the 18th of August 1995 the US Federal Aviation Authority (FAA) had granted Av Atlantic approval to fly the Boeing 727-200 between Australia and New Zealand while at the same time Ewan Wilson and a CAA official were in the United States to facilitate the New Zealand approvals. On the 20th of August the Boeing left Georgia on the first leg of its journey to New Zealand and on the 23rd of August 1995 US registered Boeing 727-225 N805EA landed in Hamilton with Ewan Wilson on board. The NZ Herald reported, At 3.27pm yesterday, what began as a far-off speck in the sky grew into the bright lights and shiny whiteness of Kiwi Travel's Boeing 727-200, which roared past sever-al hundred spectators at the airport and did a lap over Hamilton. The jet's touch down minutes later was greeted with cheering by the crowd - and with relief by Patrick Pruett, Kiwi Travel director. He was the first person out on to the tarmac and up the gangway at the rear of the aircraft, clutching a faxed copy of the company's Civil Aviation Authority (CAA) air certificate, which arrived only an hour before the plane touched down. It had been a nervous wait for approval for Kiwi Travel staff. The certificate, the approval for Av Atlantic's air-craft to operate out of New Zealand, was the first thing Mr Wilson saw when the back door of the jet opened. He had left the US on board the Av Atlantic-owned Boeing, not knowing whether the airline was going to get approval in time to fly out today. He grabbed the certificate and those on board erupted with joy. "It's so exciting. We're really proud to be back home and to have pulled it off," Mr Wilson said.

Kiwi Travel International's Boeing 727 N805EA on touchdown at Hamilton on its delivery flight on 23 August 1995.

The following day the Boeing 727 operated Kiwi Travel International Airlines' inaugural flight, KIC19, from Hamilton to Sydney via Auckland and the direct return flight, KIC20. The jet left Hamilton Airport at noon with 155 passengers, 62 of them in budget, no-frills seats. However, the inaugural flight was not without its problems. A few hours before the flight Kiwi was given notice that a strike by Qantas workers meant there would be no ground handling for the flight. In a Waikato Times report, Ross Pollock of Australian Commuter Ltd, said he and two of his staff, with "enormous" help from the Federal Airports Corporation (FAG), turned Kiwi's Boeing around in 1½ hours last night in Sydney with most of the 150-plus passengers on both flights unaware of the problems. That involved getting it to its arrival gate, escorting passengers through border authorities, unloading and loading baggage, cleaning the plane, getting it refuelled and pushing the air-craft back out to the taxi way for take off. Special vehicles for pushing the aircraft to and from taxi-ways were not available to Kiwi until FAG helped out. Kiwi called in extra agents in Sydney to help with the paper work, the cabin crew cleaned the aircraft, and the American pilots helped to shift luggage. Despite the problems the return flight to Hamilton was only 30 minutes late.

TVNZ Coverage of the first flight

https://teara.govt.nz/en/video/27112/kiwi-international

Kiwi Travel International's Boeing 727 N805EA at Hamilton on 27 September 1995

Problems worsened when Qantas withdrew ground support because Australian Commuter Ltd was blacklisted by the Australian Transport Workers Union (TWU), on the grounds that it employed part-time and casual staff. And meanwhile, Air New Zealand spokesman, David Beatson, said the national carrier was making moves to counter the competition from its new rival, but is keeping quiet about how. Mr Beatson would not be drawn about the company's response for fear of alerting the people at Kiwi Travel. Because the Hamilton-based operation was still small-scale it had not added great pressure to the market, but "we watch it all - because we have to."

Kiwi's first flight from Hamilton to Brisbane, KIC01, and the return flight, KIC02, operated on the 24th of August. On the 28th of August 1995 Kiwi International operated the first scheduled air services between Dunedin and Brisbane. That morning the Boeing 727 had flown 120 passengers from Hamilton to Brisbane and then 60 people from Brisbane to Dunedin. The first flight to Brisbane was “nearly full.”

Kiwi's Boeing 727 N805EA at Brisbane in September 1995

Meanwhile, on the 27th of August Kiwi flew its last Hamilton-Rockhampton-Brisbane operation using the Air Nauru Boeing 737. Ewan Wilson said, "We didn't make any money with it [the service]. But we said we would do it, and we did."

The 727 schedule was as follows
❑ Sunday: Hamilton-Brisbane-Hamilton.

❑ Monday: Hamilton-Brisbane-Dunedin-Brisbane.
❑ Wednesday: Brisbane-Hamilton-Sydney-Hamilton.

❑ Thursday: Hamilton-Brisbane-Hamilton.
❑ Saturday: Hamilton-Sydney-Hamilton.

The success of Kiwi’s peanut and cola Sydney fares caused a logistical nightmare of thousands of calls and bookings and on the 1st of September it was announced that this had led the company to temporarily cease selling the fares. Ewan Wilson said weaknesses in the company's reservation operation had surfaced. Kiwi did not have enough staff and current staff needed more training. In its first week as New Zealand's second scheduled international airline, Kiwi flew 3000 people across the Tasman.

As the new international airline bedded in operations it looked for further opportunities. On the 18th of September Ewan Wilson was in New Plymouth to launch Kiwi Shuttle's Piper Chieftain service linking New Plymouth with Hamilton. Ewan Wilson said Kiwi would love to provide Taranaki with the opportunity to fly from New Plymouth to Australia and the Pacific island, just as soon as the runway is lengthened. “This service from New Plymouth to Hamilton not only provides Taranaki people with a connection for international flights leaving Hamilton, but it's a very important part of our expansion plans. We intend to be a legitimate alternative to the national carrier (Air New Zealand), and not just in the trans-Tasman market. We feel that by using the same philosophy we have already used very successfully, we can provide services where they are not provided already."

However, disaster struck the company when on the 18th of October the Boeing 727 blew two tyres on touchdown at Sydney. What followed was an 11 day fiasco that effectively grounded the airline with the only reprieve coming from Air Nauru who were able to operate four flights on the following Sunday. Two charter flights for The Warehouse had to be cancelled because a replacement aircraft could not be arranged in time. The incident made it clear that the contract with Av Atlantic was problematic. The grounding cost the airline some $600,000 and Kiwi went to the courts with a $2.2 million damages claim against the American owner.

On the 7th of November Kiwi announced that a 233-seat Boeing 757-200 had been leased from Air 2000, a British charter operator. The 757 had the advantage of being able to fly direct from Hamilton to Australia without the refuelling stop in Auckland. Kiwi Travel said they had made sure the five-year lease agreement with Air 2000 for the Boeing 757 included spare parts worth $3 million and three fulltime engineers were to be based in Hamilton. "We refuse to be put through that agony again. It should not take 10 days to fix aeroplanes. "Having those spare parts on call will certainly make it easier when we do have mechanical problems."

However, a second disaster for Kiwi was looming. On the 8th of November 1995 a competitor to Kiwi was announced in the form of Freedom Air. Billed as a low cost charter operator the new airline was a wholly owned subsidiary of the Mount Cook Group which in turn was a subsidiary of Air New Zealand. The announcement said Freedom Air intended to fly from Hamilton and Dunedin to Australia as well as from Auckland Wellington and Christchurch. Kiwi accused Air New Zealand of trying to shoot Kiwi out of the skies! It's a deliberate attempt by a huge, resourceful, existing operator to try and eliminate competition," Ewan Wilson said.

Kiwi’s Boeing 757-2Y0, G-OOOU, arrived on the 21st of November 1995 and immediately an air fare war began. Qantas lowered its fares to $395, with Air New Zealand following suit. Kiwi Air countered with a special $200 return fare on a limited number of flights. When two passengers book fares in the no-frills "peanuts and cola" section on the first three flights, one paid $399 and the other $1. The Boeing 757 entered service on the 24th of November 1995 with a return flight from Hamilton to Sydney return. Meanwhile, the Boeing 727 flew its last service on the 23rd of November 1995. An attempt to ground the Av Atlantic Boeing 727 until such time as the court case was heard failed and the 727 returned to the United States and departed New Zealand on the 30th of November 1995.

The 757 schedule was as follows;
❑ Sunday: Hamilton-Brisbane-Hamilton.

❑ Monday: Hamilton-Brisbane-Dunedin-Brisbane.
❑ Tuesday: Brisbane-Sydney-Hamilton-Sydney-Brisbane.

❑ Wednesday: Brisbane-Hamilton-Sydney-Hamilton.

❑ Friday: Hamilton-Sydney-Dunedin-Sydney-Hamilton.

❑ Saturday: Hamilton-Sydney-Hamilton.

The Boeing 757, G-OOOU at Sydney in December 1995

On the 19th of December 1995 the NZ Herald reported on Kiwi’s ambitious expansion plans. The article said that Kiwi International was planning a public share float to fund an ambitious multi-million dollar expansion during the next five years. The trans-Tasman budget carrier - dogged by rumours of imminent collapse during the past two months - says it hopes to have a fleet of four jets flying as far as Europe by the turn of the century. Its founder and chief executive, Mr Ewan Wilson, said he also hoped to have a 180-seat Airbus 320 flying a main trunk domestic shuttle service if the proposed Air New Zealand-Ansett merger went ahead. Ministry of Transport approval would be needed. The staff of 105 was projected to increase to about 1000 during the next five years, but Kiwi would retain its Hamilton base.

On the 1st of December 1995 Kiwi announced it would operate a series of six $699 charter flights between Auckland and Rarotonga for an Auckland company from the 8th of December 1995. 

As Air New Zealand and Ansett Australia looked at a merger Kiwi demanded from the Commerce Commission the right to launch a domes-tic air service if an Air New Zealand-Ansett Australia merger is approved. The airline said it intended to bring a second Kiwi Boeing 757 into service in the middle of 1996 to an Auckland-Wellington-Christchurch shuttle service. Ewan Wilson said it would mean the end of choice for New Zealand domestic air travellers. Kiwi should be allowed to step into the gap.

Meanwhile the Rarotonga charter flights ran into problems. On the 26th of January 1996 almost 100 airline passengers lost their seats to Rarotonga yesterday as Kiwi International Airlines held a charter company and the Cook Islands Government responsible for about $200,000 of missing airfares. Kiwi International delayed the Rarotonga flight for more than seven hours, saying it would not accept tickets issued by Ace Enterprises because previous flights had not been paid for. It said the charter company's director, Mr Aaron Marsters, and his adviser, Mr Joseph Ka, had been working for the Cook Islands Government - a claim rejected by the Cook Islands Minister of Civil Aviation, Dr Williams. The airline backed down and agreed to take the Ace Enterprises passengers when the Cook Islands Government warned that it was legally obliged to do so under the contract which gave it landing rights in Rarotonga. This story is fully explained in Dogfight but basically Kiwi was led astray. For the airline, however, it meant more unwelcome media attention.

The Boeing 757 was an ideal aircraft for Kiwi. However, on the 4th of February it developed an electrical fault. Kiwi transferred all the passengers to Qantas flights at a cost to Kiwi of some $130,000. The fault, which was the only engineering incident to befall the 757, was quickly repaired but the incident highlighted the problem of operating an airline with just one aircraft.

Kiwi Travel International's Boeing 757 at Brisbane in December 1995

Despite the airline’s problems it was operating profitably. On the 17th of February it was announced the company had made a $1.2 million profit before tax for the previous 10 months. Ewan Wilson, said the news should silence detractors who had speculated on the imminent demise of Kiwi International. "This puts us in a very strong position for some of our future plans, not only trans-Tasman but long-haul. It also sends a clear message that small companies who discover a niche market can take on some of the biggest as long as [they get] public support."

In early March 1996 Freedom Air announced it would start daily flights from Hamilton from the 28th of April in what Kiwi said was a deliberate attempt to put it out of business. In a counter move, a few days later Kiwi announced that it would establish a major base in Christchurch in July to operate cut-price DC-10 flights to Sydney, Melbourne, Perth, Cairns, and possibly Singapore. The airline is also planning to offer occasional seasonal charters to Britain for as little as $1800.  Ewan Wilson said the airline would be leasing a DC-10-30 extended-range aircraft and would be filing an application with the Ministry of Transport. The airline wanted to give a clear sign that Kiwi intended staying for the long term and would not be crushed by the Mount Cook/Air New Zealand subsidiary, Freedom Air. "We are determined to be the least expensive and most competitive airline on the block." While Kiwi would retain its traditional "peanuts and cola" class on the DC-10, it would also offer a regular economy service with meals and a Kiwi-Plus option with 22 seats in a "business/first" section that would provide first-class service for fares lower than other airlines' business-class rates. "We are aiming to be different by becoming the airline of choice; the first airline in the world to offer passengers all the variants of inflight service — from peanuts and cola to the finest first-class service available." The DC-10-30 will have New Zealand cabin crews but the pilots will be provided by Air 2000, the company which is already leasing a Boeing 757 to Kiwi Air. Mr Wilson said the airline would retain the B757 for its trans-Tasman services from Hamilton and Dunedin. "We are also looking at an Airbus A320, but a decision on that will depend on how much of a threat there is of the competition," he said.

By early April 1996 Kiwi had shelved plans to enter the Asian market to try to win back the edge gained by its rival, Freedom Air. Ewan Wilson said that his company had been forced to retrench. He said the company had suffered a downturn in trans-Tasman bookings for May and June that he believed was due to a recent Freedom Air special offer. The situation had forced the company's directors to make the decision not to pursue any high-risk ventures, including the $8 million headquarters planned for Hamilton Airport. Unfortunately yet another misfortune was due to hit the airline. 

Kiwi Travel International's Boeing 757 G-OOOU on pushback at Sydney in November 1995

In April Air 2000 recalled their Boeing 757 a month earlier than scheduled and Kiwi had to rapidly find a new aircraft. On the 18th of April Ewan Wilson announced that Kiwi had leased an Airbus A320 from Asia and a Boeing 737-300 from Europe and the pair would arrive on the 1st of June. That left several weeks of booked flights but no aircraft. Air Nauru again came to the aid of Kiwi with its Boeing 737-400, however it was only available for four days a week. This still left three-quarters of the passengers booked on Kiwi's flights to Brisbane and Sydney without a seat. Patrick Pruett, a director of Kiwi, said all the passengers who would be affected had been told and given options to change flight dates. He said the company offered a choice of a new flight date or a full refund, and most people were satisfied. Mr Pruett said Kiwi was looking at rescheduling people on flights with other airlines. At the same time it was announced that the Christchurch services to Melbourne and Perth would be operated by a Boeing 737. It was the loss of the Boeing 757 and following turmoil and the expansion to Christchurch which were key factors in Kiwi’s demise.

A name changed occurred on the 2nd of May 1996 when the airline was renamed from Kiwi Travel International Airlines Ltd to Kiwi International Airlines Ltd. 

The Seychelles registered Airbus 320, S7-RGX, which was operated by Singapore based Region Air arrived on the 26th of May 1996. It flew its first flight, from Hamilton to Brisbane on the 30th of May 1996, departing just 10 minutes after the Civil Aviation Authority issued an air operating certificate for it. The Region Air Airbus came at a cost, however, with Region Air insisting on a $US1.1 million deposit on the aircraft and a $US900,000 prepayment of the lease each month. 

Kiwi International's Airbus 320 S7-RGX on arrival at Hamilton on 26 May 1996

Flying Auckland to Brisbane - NZ Herald, 19 June 1996

NZ Herald 26 June 1996

On the 28th of June 1996 Boeing 737-3Y0  TF-ABK arrived in New Zealand from Icelandic operator Air Atlanta Icelandic. Kiwi started flights from Christchurch on the 1st of July 1996 with the 737 flying a return service to Sydney. From Christchurch flights operated to Brisbane five times a week, to Melbourne twice a week, to Perth, via Melbourne, once a week, and to Sydney three times a week. At this time flights were introduced between Auckland and Brisbane twice a week. Hamilton was also connected to Melbourne twice a week with one flight a week carrying on to Perth. However, by mid-July the Christchurch to Melbourne service was cut. The new schedule had some interesting positioning flights. On Mondays the Hamilton to Sydney service operated via Christchurch. On Tuesdays the Hamilton to Brisbane service operated via Sydney. On Thursdays the Sydney to Christchurch service operated via Melbourne and on Sundays the Sydney to Hamilton service operated via Christchurch.

The Airbus 320 schedule was as follows;
❑ Monday: Brisbane-Dunedin-Brisbane-Auckland.

❑ Tuesday: Auckland-Brisbane-Sydney-Hamilton-Sydney-Brisbane-Auckland.

❑ Wednesday: Auckland-Brisbane-Hamilton-Sydney-Hamilton-Brisbane.

❑ Thursday: Brisbane-Hamilton-Brisbane-Hamilton-Melbourne-Hamilton.

❑ Friday: Hamilton-Sydney-Dunedin-Sydney-Hamilton.

❑ Saturday: Hamilton-Sydney-Hamilton-Melbourne-Perth-Melbourne.

❑ Sunday: Melbourne-Hamilton-Brisbane-Hamilton-Brisbane.

Kiwi International's Airbus 320 S7-RGX at Hamilton 6 July 1996

The Boeing 737 schedule was as follows;
❑ Monday: Hamilton-Christchurch-Sydney-Christchurch-Brisbane-Christchurch.

❑ Tuesday: Christchurch-Melbourne-Perth-Melbourne-Christchurch.
❑ Wednesday: Christchurch-Brisbane-Christchurch-Melbourne-Christchurch.

❑ Thursday: Christchurch-Sydney-Melbourne-Christchurch-Brisbane-Christchurch.

❑ Friday: Christchurch-Brisbane-Christchurch-Brisbane-Christchurch.

❑ Saturday: Christchurch-Brisbane-Dunedin-Brisbane-Christchurch.

❑ Sunday: Christchurch-Sydney-Dunedin-Sydney-Christchurch-Hamilton.

Kiwi International's Boeing 737-300, TF-ABK at Christchurch on 30 June 1996

While the airline was expanding overall July was a bad month for Kiwi. On the 7^th of July 1996 Mount Ruapehu erupted sending ash into the atmosphere. This led to numerous diversions and cancellations. In the same week Civil Aviation Authority stipulated that international flights landing at Hamilton Airport between 10 pm and 6 am must have approach control. Up until that time Kiwi and Freedom had operated into Hamilton without approach control and the new ruling meant problems for three Freedom flights each week and five Kiwi flights each week. After Kiwi took court action, a judge ruled that it could land before 6 am, but the plane would have to be empty. Irate passengers on a Friday shopping trip to Sydney did not arrive back in Hamilton until 5 am on Saturday, after landing in Auckland and being bused home. A week later Airways Corporation relented and agreed to provide Hamilton Airport with 24-hour approach control coverage by the end of the month. And to make things worse, the Airbus was experiencing mechanical faults and problems with Region Air’s operations and as final straw the Hamilton fog meant the night operations could be easily compromised.

What class of service are you looking for?

On the 20th of August the NZ Herald reported that passengers on Kiwi International Airlines were no longer insured for losses if the airline collapses. The airline assured passengers that the company was not in danger of folding and was not worried by the change. Just over a week later, however, Kiwi International Airlines announced that 90 of its 243 staff in New Zealand and Australia would be made redundant in the face of economic troubles. Despite this Kiwi had popular support and offers of help from members of the public flooded into its Hamilton office. About 200 people called the Kiwi offices to ask what they could do to help.

Also going in the restructure was the Boeing 737-300 serving the South Island. Kiwi announced that weekly services to Australia from Hamilton, Dunedin, Christchurch and Auckland were to be slashed from 30 to 14 effective from the 6th of October. Kiwi's proposed schedule would have, five Brisbane services a week, two to Sydney and one to Melbourne from Hamilton. Christchurch's eleven services a week were to be reduced to two and from Dunedin Kiwi announced it would fly to Brisbane twice a week and to Melbourne once a week. Both Auckland and Perth were to be removed from the Kiwi network.

At Sydney in August 1996, Kiwi International's Boeing 737-300 TF-ABK

  

On the 31st of August 1996 Region Air grounded their Airbus 320 in Brisbane with the intention of returning it to Singapore. Ewan Wilson went to the Queensland Supreme Court to ask for a court order requiring an immediate flight to Hamilton. Kiwi also wanted to seek substantial damages from Region Air, the jet's owner. "If we fail to get this it will be a fatal blow to Kiwi," said Ewan Wilson. With Region Air holding a deposit and a pre-payment on the lease for the next ten days the court order was granted. In the next few days both Kiwi’s aircraft were used to clear the backlog.

Kiwi's Airbus 320 S7-RGX at Sydney in August 1996

But the damage had been done. On the 9th of September 1996 Kiwi International Airlines ceased operations and announced it was going into liquidation leavings hundreds of travellers stranded on both sides of the Tasman. On that day the Boeing 737 was not operating any flights and the Airbus operated the final Kiwi International Airlines' service from Brisbane to Hamilton. At the press conference announcing the liquidation Ewan Wilson said Kiwi had achieved a great deal in its 2½ years. "I don't think we should hold our heads low... we moved more than 230,000 passengers.”

Waikato Times, 10 September 1996

In May 1997 the NZ Herald reported that, Directors of failed trans-Tasman airline Kiwi were "reckless and careless" to keep operating after they were told they were heading for a loss of $2.8 million, says a Commerce Ministry report. But the report also says there were "justifiable" reasons for Kiwi to keep trading in the short term after July 1996, when it was told by its advisers, Ernst and Young, it was insolvent. The report on the ministry's six-month investigation into Kiwi's collapse on September 9 last year gives causes of failure as:

• Inadequate accounting systems.
• Inadequate management reporting systems.
• Mismanagement of pre-paid ticket income.
• Inexperienced and under-resourced accounting staff.
• Under-capitalisation.
• Lower yields and loadings resulting from competition from other airlines, including Air New Zealand, Freedom and Qantas.
• Inexperience of, and mismanagement by, directors.

The report says the liquidators, Price Waterhouse, have not been able to decide Kiwi's full assets and debts, but believe about $5 million is owed to pre-paid passengers, and about $3 million to other creditors.

Ewan Wilson later responded saying the reason the airline collapsed was "simply the lack of passengers paying sufficient yield" because of "the introduction of a heavily-subsidised, fully-owned subsidiary of Air New Zealand [Freedom Air] into Kiwi's pioneered provincial gateways." In the aftermath of the airline's collapse Ewan Wilson was ultimately convicted of fraud and banned from running any company for five years. 

Despite its failure Kiwi International was a success. It did, as Ewan Wilson said, move 230,000 passengers across the Tasman. But more than that it left a legacy. The Kiwi International challenge forced the national carrier to look at it self and how it might make short haul international travel affordable. The model Air New Zealand currently has of offering a variety of fare classes owes a lot to the 'nuts and cola' airline. Dunedin has managed to retain an international service but the big loser was Hamilton that was so loyal to both Kiwi and later Freedom. It has no international service but there is still the potential for one, given the city is expected to double in size in the next 30 years.

As for Ewan Wilson, he was a man with vision, energy and a give a go attitude. If you want to understand the man, read Dogfight, a really engaging read that helps the reader understand the man, his dreams and his tenacity.

An International Fleet

Seychelles

S7-RGX - Airbus 320-231 (c/n 238)

USA

N805EA - Boeing 727-225 Adv (c/n  22436) 

Iceland

TF-ABK - Boeing 737-3Y0 (c/n 23922)

Nauru

C2-RN10 - Boeing 737-4L7 (c/n 26960)

C2-RN11 - Boeing 737-4L7 (c/n 26961)

UK

G-OOOU - Boeing 757-2Y0 (c/n 25240)



In putting together these airline profiles I am often indebted to the work of others. The information is often out there but not brought together and this is what these airline profiles aim to do. For this post I am particularly grateful for the archives of Bruce Gavin and the work of Mike Condon and Phil Craig published in the AHSNZ Aerolog.

The Aviation Historical Society is well worth supporting and joining. There is a lot of great historical material being produced at present...

http://www.ahsnz.org.nz/user/register