This is more of what JH departures about
#
Air New Zealand is reviewing its regional network just as budget rival Pacific Blue unveils plans to expand its domestic services.
The airline is also warning that some smaller towns risk losing their air link if passenger numbers do not hold up.
Air New Zealand head of short haul airlines Bruce Parton said domestic passenger numbers were down about 3 per cent due to the slowing economy. "So it is at the margins, it's just that our game is at the margins. If in the end we can't get loads, we really do need to pull out of locations."
The review would look to improve synergies between subsidiary regional airlines Eagle Air, Air Nelson and Mount Cook Airline.
That could include a single, heavy maintenance base for the entire turbo-prop fleet, faster airport turnaround times, better matching aircraft types to routes, and streamlining operational functions such as flight planning.
Pacific Blue this week revealed plans to break Air New Zealand's regional monopoly by touring a new 104-seat Embraer 190 E-Jet around several provincial centres to test airport capability and community response.
A planned visit to Palmerston North on Thursday was cancelled after one of the jet's engines was damaged by a bird strike during an attempted takeoff from Hamilton.
Air New Zealand denied industry reports yesterday that it had summoned Embraer representatives to Auckland in response to Pacific Blue's move.
House of Travel retail director Brent Thomas said Pacific Blue's regional plans would lead to huge fare reductions, similar to what had occurred on the main trunk route and trans-Tasman market.
However, Air New Zealand would not necessarily respond by replacing some of its turbo-prop aircraft with jets.
Although jets were more comfortable, scheduling and frequency of services were more important, especially to the business market, Mr Thomas said.
Competition would make the market grow rather than lead to a switch from one airline to another, he said.
Also, with just three Embraers, Pacific Blue could not match Air New Zealand's regional schedule using 50 aircraft.
Mr Parton said the Embraer 190's operating costs were up to 30 per cent higher than the ATR72, making it unsustainable.
Pacific Blue's Adrian Hamilton-Manns countered that the airline had a 40 per cent cost advantage over Air New Zealand. "It works for us."
Mr Parton said a key plank of the review would be to bring maintenance of the three regional aircraft types under one roof to reduce costs and the amount of time aircraft spent on the ground.
Each of the airlines operates a different aircraft type and targets a specific market.
Eagle Air and Air Nelson maintain their own Beech 1900Ds and Bombardier Q300s. Mount Cook Airline's ATRs are maintained by one of Air New Zealand's main engineering facilities. There were several options for a new base outside of the existing maintenance facilities at Hamilton and Nelson. Air New Zealand also had engineering facilities in Blenheim, Dunedin and Invercargill, which could be expanded.
"It is really about marrying a work force and infrastructure and then working with the local communities that want to develop this because it is a huge employment opportunity."
The airlines would continue to be managed from the regions, with no plans to combine them in a single head office.
Mr Parton said no target for savings had been set for the review, which was not aimed at job cuts.
Air Nelson general manager John Hambleton has been appointed project director for the review starting July 1.
