Pero looms as threat to air freight bid

Freightways says it intends to expand its estimated half share of the $7 million domestic same-day air freight market after securing a Qantas contract held before by failed regional airline Origin Pacific.

But the listed express delivery company, and its rival for domestic air freight, Air New Zealand, may yet find their share of the same-day market under threat from mortgage broking millionaire and Origin Pacific investor Mike Pero, who said he hoped to reveal plans for a new air freight service at the end of this month.

Pero, who lost more than $3 million in Nelson-based Origin Pacific, which folded last month, said his plans for a new air freight service were still very much alive.

Freightways' managing director, Dean Bracewell, said: "It's [same-day freight service] very small compared to our core business, but it provides a complementary fit and one we can add value to and grow."

Origin, which Pero helped rescue from collapse in 2004, grounded its passenger services in early August, saying it needed a cash injection of about $5 million to $7 million. It said it was trying to find a "buyer" for its successful air freight business.

But on September 15 the airline said it had failed to find a buyer and was winding up.

Freightways was reported as having been given "exclusive" due diligence rights, while Pero also wanted to buy the freight business.

It now seems Origin did not have a freight business to sell. A source said Origin's contract with Qantas - to load freight on the main Auckland-Wellington-Christchurch route, and a nightly Qantas 767 freighter between Auckland and Christchurch - was by then week by week, and any goodwill it may have hoped to cash in on was gone.

Bracewell said Freightways had bought nothing from Origin's receiver but "some tools to do the job". But it had employed 20 Origin freight staff in Auckland, Wellington and Christchurch.

Freightways, which has five cargo aircraft of its own and moves about 40 tonnes of freight on a standard night, had partnered with cool store providers to be able to carry perishables such as seafood and flowers, a significant part of Origin's same-day business.

Bracewell said Freightways would expand the Qantas contract business.

"We have a fairly significant on-the-ground capability, door to door, whereas the Qantas airfreight capacity was an airport-to-airport service, so potentially we can link in road capability. Also having our own additional aircraft introduces ... more capacity."

With businesses holding less and less stock these days, Bracewell expected just-in-time delivery to drive growth in its new same-day service as well as its core courier business.

David Ballard, managing director of exporter New Zealand Bloom, which has annual revenues of $17.5 million, said it was a big relief when Freightways took over as otherwise Air New Zealand would be the only service.

Air New Zealand has only managed cargo on its domestic network since April. For seven years it contracted the job to New Zealand Post joint venture Pace.

Ballard said Origin carried 10 per cent of his company's flower supply, bringing flowers from Christchurch to Auckland, where most export flowers leave the country.

During South Island seasonal peaks, the Qantas space was vital because freighters got overloaded.

Shares in Freightways closed up 3c at $3.68 on Friday.