2 sobering posts from Airline Net:
Username: Tullamarine
Posted 2001-09-06 02:12:54 and read 16 times.
The problem with letting AN close down then trying to restart it is that apart from probably having to reapply to AOCs etc you would also be destroying a huge amount of goodwill meaning the market share on restart may be tiny. For example, on day 1 of any AN liquidation you could expect QF to come forward and announce it will honour all FF points and club memberships of AN Platinum and Diamond members who would naturally rush at the opportunity. These are the cream clients who pay full-fare and travel frequently. Without retaining these clients any airline Virgin tried to put up against QF would be always a bit-player.
You also risk losing leased assets which would be reclaimed by lessors meaning access to fleet, terminals etc maybe difficult particularly if another external party tried to take advantage of the situation and decided to commence a domestic airline in competition to QF and Virgin. In this situation the other competitor would have equal rights to purchase assets from a liquidator meaning whatever Virgin ended up may not be enough.
Topic: RE: Urgent:Skies Grow Dark For Air NZ
Username: Mx5_boy
Posted 2001-09-06 02:17:01 and read 13 times.
Scuttler,
I am sure the federal government on both sides of the Tasman are well aware of the financial strains AN / NZ are under. Most of the media reports we are hearing are pure heresay and unpredictable at best.
Given that we are currently under conservative leadership I still can not entertain the idea of the Howard government allowing the capacity of AN to fold overnight. This is not a onetel type debacle (minimal capacity) it is 47% capacity (capacity v's actual % of market share) of our domestic airline network. There is no airline in the region that would be able to step in immediately with that type of capacity.
When you think of the businesses that rely on that capacity, pax, freight, mail, regional areas, tourism and a whole host of others - it would be in the best interests of any government to keep it floating and sort the mess out post haste. A collapse would have Aust' wide ramifications both economically and politically.
I have stated before that this whole mess is about the carve up of the region. Every player has been keeping their cards close to their chests and spitting out spurious stories to a curious media on a constant basis.
What do I think will happen? We can go over the possible scenarios a hundred times and not get a clear answer but I beleive that the SQ and QF boards have been talking about this for quite a while and NZ has been scrambling to protect itself using AN as a shield / bargaining tool to keep itself in the trifecta.
If you have an equiring mind, remember when Impulse went to QF? Mysteriously Singapore Inc pulled funding (supposedly) from Gerry's little adventure. Barely a peep out of the federal government about the issue. Seems a bit odd?
As for AN returning to profitability, it's a cyclic business and one that is in the low part of the wave at the moment. Obviously most business keep cash reserves on hand for times like this and we don't really know what AN / NZ has, although I suspect the pollies do.
AN relies mostly on high yeild pax (like me) and needs to boost that part of it's business as well as keeping the back of the plane full too. If AN was to change it's cost structure to that of DJ it would certainly only end up being DJ - a low cost carrier ferrying tourists around the country. It's kind of inconceivable to imagine AN as simply a low cost carrier - AN has relied on it's innovation and superior service in the past and they are it's strong points.
Staff taking pay cuts are a novel idea, but it has to come from the top down for that scenario to work. AN staff have already been through the ringer and further demoralisation of staff through wage cutbacks probably wouldn't be a great idea in the short term.
Underpaid staff do not make for happy faces at the coal face - which would undermine so many things. You have to remember pay people peanuts and they will behave like monkeys. If you want good quality professional staff you have to pay for it, otherwise they walk. On the other hand, which is better 'a job' or 'no job'?
I can only remember one company that went down that road and suceeded - 'SPC' in the early nineties?
So it's back to reading the news reports.