Filling the hole in our skies

Travellers fearing a return to the dark days of monopoly air travel can take heart from a surge of competition for local air routes. MATHEW DEARNALEY reports.

Out of the wreck of Qantas NZ (not to be confused with Qantas in general) comes a stark reminder of the basic aviation business principle: winged flight needs bums on seats to sustain financial liftoff.

The collapse of this domestic competitor of Air NZ five weeks ago sent tremors up the spine of our long, thin country. Travellers feared becoming trapped again in a stifling monopoly, such as the one broken in 1987 with the arrival of a brash Ansett NZ.

This airline brought a service-oriented ethos to compete with an Air NZ which excelled internationally but was found wanting on its home beat.

But travellers' fears of a few weeks ago have been allayed as others jostle to fill the gap left by Ansett NZ's failed successor, Qantas NZ, run by a consortium of New Zealand and overseas businessmen.

In any case, the public expectations raised by Ansett NZ, which spurred the construction of air bridges and new terminals as well as the introduction of meals and price competition, would probably deter a return to the dark ages of monopoly.

Australian Qantas, despite refusing to bail out its namesake, rushed to protect its brand by bringing over a Boeing 767 to clear a backlog of passengers on the main trunk Auckland-Wellington-Christchurch route.

It has since committed itself to staying here, if only on main routes, while preparing to take feeder traffic under a deal with Nelson-based regional airline Origin Pacific.

Qantas intends using four Boeing 737s from July for a healthy 10 round trips a day between Auckland and Wellington, and eight from Auckland to Christchurch. Origin Pacific plans to add Queenstown, Rotorua, Dunedin and Blenheim to its nine-centre network.

British-owned budget airline Virgin Blue is also keeping an eye out for openings here, but it is good old Air NZ, the former state monopoly turned creature of market forces, that has been quickest to respond to provincial New Zealand's pleas to plug gaps left by Qantas NZ's demise.

Senior executives have been touring provincial centres to check the pulse of regional economies, a precursor to clinical business decisions to get the biggest possible number of people into aircraft seats.

What gaps did Qantas NZ leave?

Qantas NZ served 11 cities and towns on main trunk, tourist and provincial routes, accounting for 30 to 35 per cent cent of the domestic market, or 143,000 passengers in its last calendar month.

The old Ansett NZ lost market share of 5 to 10 per cent after a crippling dispute in which it locked out its pilots in 1999 dented its credibility.

The local Qantas NZ consortium inherited leases to eight 90-seater BAe 146 "Whisper" jets - easy on the ear but costly to run - for routes between Auckland, Wellington, Christchurch and Dunedin, and the tourist centres of Rotorua and Queenstown.

It also used a mix of 38-seater and 50-seater Dash-8 turboprop craft and 19-seater Jetstreams on provincial routes serving Palmerston North, Hamilton, Invercargill, Nelson and Blenheim.

The tourism industry was particularly aghast at the Qantas NZ collapse, but has been soothed by an Air NZ promise to more than compensate for lost services to Rotorua and Queenstown.

Civic leaders in Hamilton, Dunedin, Invercargill and Palmerston North, however, are not so happy.

Has the Qantas NZ collapse hurt tourism?

Luckily, the April 21 collapse came at the end of a bumper tourist season so the fallout has been fairly light, says Rotorua Agrodome managing director Warren Harford.

Mr Harford, who is also vice-president of the Inbound Tour Operators' Council, says the Air NZ announcement has given time for tour promoters in countries such as the United States to market holiday itineraries for a new season starting on September 1.

ROTORUA: Mr Harford has seen some impact from the temporary loss of the daily Qantas Whisper jet flight between Rotorua and Christchurch, which means large groups of tourists have to fly from Canterbury to Auckland before tracking back to the Rotorua district by bus.

But Air NZ intends putting three daily Whisper flights into Rotorua from Christchurch in coming weeks. These are among the former Ansett Australia Whisper jets which were leased to Qantas NZ. Air NZ ended up owning eight through its takeover of Ansett Australia.

QUEENSTOWN: In Queenstown, leaders have fretted over lost landing fees after spending $3 million re-sealing their runway to strengthen it for Boeing 737s from Australia and pledging to fork out a further $6 million this year for a new terminal.

They are hugely relieved that Air NZ will more than make up for lost Qantas NZ seats. But sources point to Air NZ's vested interest in protecting its investments in three South Island skifields, as well as the flow of tourist traffic from its international flights.

Dunedin and Invercargill also note their growing role as gateways to such tourist destinations as Fiordland and the proposed new Rakiura national park on Stewart Island.

Civic leaders welcome an Air NZ decision to put more carrying capacity their way, but are concerned about a lack of detail on the Qantas Airways-Origin Pacific partnership.

What extra capacity will Air NZ put on?

Air NZ will repatriate four of the Whisper jets to Australia, but has decided to press the remainder back into service on domestic routes, even though they cost 25 per cent to 30 per cent more to run than 737s.

The airline intends putting an extra return jet flight a day on each of five routes, including four from Auckland - to Wellington, to Christchurch, and also to Dunedin and to Queenstown.

Air NZ will also run three flights daily on each of three routes from Christchurch: to Wellington, Rotorua and Queenstown and a Whisper flight from Christchurch to Dunedin.

Routes between Hamilton and Wellington, Christchurch and Dunedin, and Christchurch and Dunedin, will each gain an extra daily return flight by a 66-seater ATR turboprop.

Hamilton now has five return ATR flights a day to Wellington and two services using 33-seat Saab turboprops.

Air NZ intends putting another daily Saab service on the route.

But Rotorua and Queenstown will lose a return ATR flight each, at the same time as gaining the Whisper jets, the first of which will start work in about three weeks.

Air NZ intends hiring 100 flight and cabin crew, as well as more engineering staff, drawing heavily from redundant Qantas workers.

HAMILTON: Hamilton is miffed that Air NZ did not see the Qantas NZ collapse as reason to restore its Boeing 737 service to Wellington. Its withdrawal in October led to loud protests that the country's fourth-largest centre deserves jet-set status.

However, Air NZ says it is open to persuasion over a bid by Hamilton for a direct 737 link to Sydney, if passenger demand stacks up.

DUNEDIN: Dunedin leaders are pleased Air NZ has accelerated plans to begin a new direct service from Auckland, but disappointed it is not adding to its two daily direct flights from their city to Wellington.

PALMERSTON NORTH: Palmerston North, once serviced by Ansett Dash-8s, has to pin its hopes on the Qantas-Origin axis as Air NZ has offered no new services.

What about the Qantas-Origin partnership?

This has yet to be consummated, and a consequent lack of detail is frustrating provincial New Zealand.

Origin is believed have secured leasing rights to Qantas NZ's five Dash-8 turboprop aircraft for use on Queenstown, Rotorua, and Wellington to Christchurch routes, although it denies making firm decisions.

It also wants to add Blenheim and Dunedin to its network, which businessman Robert Inglis began three years ago with the expiry of a restraint-of-trade agreement with Air New Zealand, buyers of his remaining half-share of Air Nelson.

The existing network is serviced by Jetstreams and Metroliners and spans Auckland, Hamilton, Tauranga, New Plymouth, Napier, Palmerston North, Wellington, Nelson and Christchurch.

Dunedin airport chief executive John McCall, who also heads the Aviation Industry Association, contrasts Air NZ's positive response to the south's impressive economic growth with silence from Qantas.

While Dunedin is keen to find out what the Qantas-Origin partnership has to offer, he says the region has made it clear a direct jet service to Wellington is essential for its continued business growth.

How did places like Dunedin cope in pre-Ansett days?

Mr McCall recounts difficulties getting to and from Dunedin when Air NZ was Government-owned and state-ordained price controls gave it no incentive to add aircraft capacity.

"It certainly held back the economy and tourism was based on land transport in the days when people went on three-week coach tours."

Business was not so fast then, he recalls, and people wanting to fly had time to book ahead for scarce seats rather than having to make decisions at the shorter notice dictated by today's commercial world.

Mr McCall says the Qantas NZ collapse has led to a reduction in the number of discount aircraft seats, which means fewer people can afford to fly to and from Dunedin.

What about places where Ansett NZ never touched down?

NORTHLAND, BAY OF PLENTY, EAST COAST: Provinces such as Northland and the East Coast, which were untouched by recent competition between the big players, will gain a small service upgrade when Air NZ subsidiary Eagle Air receives 16 new Beech 1900D aircraft.

The 19-seaters will hold no more passengers than Eagle's Metroliners but will be larger than its 15-seater Bandeirantes and fly faster and higher with enough headroom to stand in the cabin.

Eagle uses the Metroliners and Bandeirantes for 50 return flights a week between Tauranga and Auckland, while Saabs of Air NZ subsidiary Air Nelson operate 24 flights from Tauranga to Wellington.

Kaitaia and Gisborne will always be costly places to get to and from, but the competitive spirit stirs even there, with modest new services starting in both places.

Air Napier has begun a rival service to Sun Aviation from Hawkes Bay to Gisborne in a seven-seat Piper Navajo, while Mountain Air of Taumarunui has spread its wings to the Far North, offering early morning and late afternoon Auckland-Whangarei-Kaitaia return flights in a six-seat Piper Aztec.

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