22 March 2020

Commuter Cuts

Picton-based Sounds Air is halving its flights from Monday after the coronavirus, and attempts to contain the disease, began to take its toll on passenger numbers. The airline will cut its flights to 150 each week, from 300 flights, Sounds Air general manager Andrew Crawford said. The routes will be unchanged.  The airline began to see a drop-off in customers from last Monday. However, the Government's warning that people should halt domestic travel is expected to have a significant impact on demand. Air New Zealand has been thrown a lifeline by the Government in the form of a $900 million loan, but needs to meet certain provisions including not closing any routes on its domestic network. The airline had already planned to cut domestic capacity by 30 per cent because demand was affected by Covid-19. Crawford said Sounds Air was also in talks with the Government about some financial assistance. As part of a $12.1 billion support package for New Zealanders and businesses, the Government will provide an estimated $600m injection to support the aviation sector, excluding Air New Zealand and the protection of supply chains. "So it depends whether that comes through or not. The Government's already stated it's talking to us, Air New Zealand, Air Chathams. We fly to a few destinations no-one else flies to, so I think it's important to keep that air service going," he said. Key Sounds Air routes were Wellington to Westport, Wellington to Taupo, and Blenheim to Christchurch. The airline, which carries mainly passengers, did not expect business to get back to normal for a year. Sounds Air employs about 100 staff. If the country goes into full lock-down, the company will "just park up and send the staff home and say 'come back' when we can", he said. "We see April and May as being very quiet, then quickly ramping back up after, but who knows - but looking at China and other places it seems to be get on top of the curve and get back into the swing of things again. "Whether that's the way it plays out here, but that's what the Government's trying to do here I believe." The airline expected to hear back from the Government this week, after "a very good conversation with the Minister of Transport last week".

Air Chathams was also significantly reducing all flights from this week. As well as providing flights to Kāpiti, Auckland, Whanganui and Whakatāne, the airline is a lifeline for the Chatham Islands, which lies off the east of New Zealand's South Island and has a population of 650. "We're the flying Countdown order, we fly everything ... we are their State Highway," general manager Duane Emeny said last week. Weekly regional flights between Kāpiti, Auckland, Whanganui and Whakatāne would be cut from 100 to 65, and flights between the mainland and island would drop from six to four a week. The business was "waiting with bated breath" to hear whether they would be supported by the Government's $600 million stimulus to help the aviation sector cope with the virus outbreak. 

Aviation expert Irene King said there was no doubt Sounds Air and Air Chathams would survive, but in a different shape. "I think probably Sounds Air is in better shape because it's carrying people into Wellington, and out of Wellington, with tremendous job security," King said. "Anything that's driven out of Wellington or into Wellington, depending on how you look at it, is probably doing quite well." As the seat of Government, Wellington would be fairly insulated compared with Auckland, which is a commercial centre, and tourist centres such as Queenstown, Rotorua, which would take a massive commercial hit. "That's where the big implications are, and Air Chathams don't run anything into Wellington." Air Chathams would be quite severely hit because aside from tourism there was no pressing reason, such as commuting, for people to travel many of the routes it flew, she said.

I don't agree with Irene King's comments, especially in regards to Air Chathams... Both Air Chathams and Sounds Air have good domestic markets, Sounds Air particularly to Wellington and out of Blenheim and Air Chathams particularly to Auckland but also the Chathams passenger and freight service which does fly to Wellington. I don't think either airline has a real shortage of passengers - the communities concerned are very committed to their airlines! However, not flying and both airlines having little traffic as the country closes down will have a huge impact on both airlines. 


  1. I guess it'll be a case of who has the most debt to service? PC12s are not cheap and no doubt financed, but I assume Air Chats own their assets with little debt to service. Is the ATR leased?

    1. As far as I know MCO is purchased, it's being used on Tauck tours last I saw of it on radar but those are likely suspended. I'd say either it'll most likely go to storage since all the scheduled sectors don't have the capacity available for an ATR