Wilson bails out as familiar headwinds strike

By MONIQUE DEVEREUX South Island correspondent

For Ewan Wilson it's deja vu - an airline negotiating financial turbulence in a competitive market.

Last time it was his own budget airline, Kiwi Air, which collapsed owing $8 million and stranding hundreds of passengers. He blamed predatory pricing by other airlines.

Today, Mr Wilson leaves New Zealand's second-largest carrier, Origin Pacific, which is also feeling the financial pinch. But this time he is confident the airline will survive.

Origin's troubles began when Qantas pulled out of a code-share agreement four weeks ago - Origin took Qantas passengers where the Australian airline's own domestic service did not reach. The arrangement was one suggested by Qantas to Origin Pacific founder Robert Inglis after Ansett collapsed, and much of the expansion of his Nelson-based airline over the past few years was due to the partnership.

Since Qantas pulled out, Origin Pacific has established links with other international carriers and Pacific Blue is considering joining them. But so far it is not enough to plug the hole and cost-cutting is now the only way for Origin to survive.

The airline owes more than $11 million to creditors and has a plan to stave off bankruptcy.

But jobs will be lost - Origin cannot say how many until the rescue package is agreed on or dismissed.

Origin has offered to pay some 50 major creditors 40c in the dollar in the next five years.

Air New Zealand said yesterday that it would accept the repayment offer for an estimated $600,000 of engineering work on Origin planes.

Mr Wilson had been Origin's sales and marketing manager but left today to concentrate on his bid for Hamilton's mayoralty. He says Origin has the best airline management in New Zealand but its problems have a familiar ring.

"Air New Zealand are very tough, unforgiving characters. Qantas have always been much worse. I think they did betray Origin this time.

"Robert was very vocal at the Commerce Commission hearing against the Air New Zealand-Qantas merger. I think this is Qantas simply paying one back."

Mr Inglis is one of New Zealand aviation's veterans.

The former Motueka hops farmer established the Associated Aviation Motueka flight school in 1978. He bought a small fleet of single-engined aircraft and started scheduled flights between Motueka and Wellington.

The service grew so popular he soon had three five-seater planes flying seven days a week, and even paid for a sealed runway at the Motueka airport.

He began flying from Nelson with a 10-seater plane, calling the new business Air Nelson. After adding flights to Palmerston North he collaborated with Hamilton's Eagle Air, a successful business that attracted Air New Zealand's attention.

The national carrier bought a 50 per cent share but in 1995 it decided the Air Nelson regional services should be based out of Auckland. Mr Inglis disagreed and sold up.

In April 1997, he and partner Nicki Smith formed charter airline Origin Pacific Airlines.

After two years that became a scheduled service and the couple now employ 450 staff and fly to 13 destinations.

Mr Inglis is regarded by his peers as a conservative, smart operator.

Mr Wilson is confident Origin will survive its financial problems.

Hamilton student Clare Ryan is one of thousands who flew Origin Pacific in the past few months to Christchurch, Wellington and Nelson.

"I hope they survive," she said.

"If they weren't there to offer competitive flights I don't suppose I would have the option of going anywhere cheaply."