Origin is found in the regions

Robert Inglis won't rule out taking Air NZ to the Commerce Commission again if it cuts into a route.

In 2002, Robert Inglis' dream of building a national regional airline was in tatters.

He had expanded his business rapidly with the assurance that Qantas would feed its main trunk flights into his regional network.

But an incredible chain reaction - caused by the actions of arch-rivals Air New Zealand - saw him dropped cold by Qantas.

Origin Pacific was on the edge of bankruptcy.

"You couldn't have written the script," Inglis says.

The collapse of Air NZ's freshly acquired Ansett in April 2001 brought the national carrier to its knees, forcing the Government to bail it out.

"If that wasn't bad enough for Origin, the Government started looking for a cornerstone shareholder for Air NZ."

Qantas was approached and the Australian carrier decided the future lay in an alliance with Air NZ.

The Flying Kangaroo pulled out of the Origin partnership, leaving Inglis with more planes than he could possibly afford to run on his own network.

He admits it was a painful time (he had to sack 93 staff) but remains diplomatic about the events and understands why Qantas did what it did.

"Jim Anderton put it pretty well at the time," he says.

Origin Pacific was the "collateral damage" from the Government's rescue of Air NZ.

It is a testament to Inglis' reputation in the industry that his creditors didn't pull the plug.

The international companies leasing the planes gave Inglis space to restructure and find new backers - the most high-profile being Mike Pero, who still holds a 25 per cent stake in the company.

Now four years later, Origin Pacific is back on the expansion trail - growing freight and passenger services.

Inglis might be an airline owner but he doesn't display any of the typical self-indulgence of a Richard Branson or Howard Hughes.

He is a qualified pilot and flight instructor but his days in the cockpit are over. It's not that he is too old to fly - at 60 he still has more than enough energy to run the airline. It's just that he does not have the time or inclination.

Somewhere on the journey from setting up a single aeroplane flight school in Motueka to becoming a major thorn in Air NZ's side, his passion made a slight detour.

Although as a young man he was "captured by flight", it's a love of the industry itself that motivates Inglis now. That and a devotion to serving regional New Zealand.

Given that he was born and bred in the small Tasman town of Motueka - and still lives there - it's not surprising he has made it his goal to connect regional centres with the world.

"It has always seemed to me that if competition developed, then regional New Zealand would have many more opportunities to develop," he says. "During the past decade, regional New Zealand has developed so many exciting attractions for international visitors. It's such a shame if there is a tourniquet in terms of seat capacity and pricing so the regions can't be visited."

First-hand experience

Inglis has first-hand experience of the isolation having just one state-owned airline can create.

When he was growing up, National Airways (subsumed now in Air NZ) ran just one flight a day from Nelson to Christchurch with a take-it-or-leave-it approach.

"Now with two services, there is goodness knows how many services."

Before deregulation in 1984, Inglis started running a few passenger flights to Wellington out of his Motueka flying school.

"With the deregulation, we exported the model to Nelson where we also had a flying school and then grew services out of Nelson."

Air Nelson was successful enough to be approached by Air NZ in 1988.

A business arrangement developed with the national airline taking a 50 per cent shareholding, which was upped to 100 per cent in 1995 when Air Nelson had grown to about 500 staff and 20 aeroplanes.

At the same time, Air NZ bought Mt Cook, Eagle Air and many other smaller regional carriers. Inglis won't say what he and partner Nicki Smith made but it was enough that they didn't plan on running an airline again.

"I didn't expect to get back into the business," he says.

"I did purchase four British Aerospace Jetstream aircraft with a view to becoming a leasing company."

But then he was approached by Qantas, which was looking at entering the local market, and that was a big influence in Origin Pacific being formed in April 1997.

Nearly 10 years (and one near total collapse) later, the business is developing traction once more.

The Air NZ bailout and Origin's restructuring had essentially stymied expansion - not helped by the national carrier's aggressive pricing and large increase in capacity.

The new business model means growth is driven from the ground up.

"We're finding now that a number of regional areas that don't have the benefit of competition are approaching us and asking for help because they feel their areas are being disadvantaged," Inglis says.

The airline is launching a Tauranga-Christchurch route this month after being approached directly by that city's business leaders.

"We certainly wouldn't take any expansionary steps against a dominant Government-owned competitor unless those regions were holding our hands and encouraging us."

Origin is already in talks with other regional centres such as Taupo.

But the risk of Air NZ jumping in on new routes that Origin picks up is a constant threat.

Origin took the national carrier to the Commerce Commission on the belief it had unfairly started a Hamilton-Christchurch route just to squash competition.

"We announced a service that hadn't been operated before - lobbied by the good folks of Hamilton wanting a direct service to Christchurch - and no sooner had we announced it Air NZ responded with a larger aircraft at exactly the same time."

The commission process proved to be long, costly and essentially fruitless with Air NZ's move deemed to be within the bounds of fair competition.

But Inglis won't rule out going to the commission again if a similar situation arises.

He believes parallels exist with the telco sector and Telecom's position.

"There is no doubt that we wouldn't have founded Origin if we thought in our wildest dreams that we'd have a state competitor again because that slants the playing field."

Inglis concedes that there will eventually come a time when he looks for an exit strategy and floating part of the company may be an option.

He speaks enthusiastically about Regional Air Express in Australia - a small airline which also ran into trouble after the Ansett collapse.

It was bought by a Singaporean company, rebuilt and has just been through a successful public float.

"The public issue allowed it to buy its own aircraft which assisted profitability," he says.

So that's a possibility in the future - but for now Inglis is too focused on short and medium-term plans to worry about his final destination.

Robert Inglis

Age: 60.

Born: Motueka, Tasman.

Lives: In Motueka with business and life partner Nicki Smith.

Qualifications: Commercial pilot and qualified flight instructor.