I am associated with people in-the-know on Norfolk Island, have been in touch with them in the last few hours and the reception to this decision, in the main, is less than favourable.
Why?
* At least 20 Norfolk Air jobs lost - cabin crew, engineering, reservation staff, office staff, catering contractor, some ground staff. There is no dole on Norfolk Island so this is a severe blow to those affected.
* A history of poor service by Air New Zealand - lots of cancelled services (a previous poster alluded to this) often taking days and days to be re-scheduled.
* No real or worthwhile promotion in the past by Air New Zealand directed towards tourism. No expectation that things will change.
* Reduction in both service frequency and destinations - Melbourne, according to many accommodation operators, was growing steadily. Now, that's been arbitrarily eliminated - except as an "add-on" fare to get from Melbourne to Sydney to connect to Norfolk Island. This is not considered to be an attractive option for tourists by many of the tourism operators and represents a consequent loss of a developing market.
* Concern about potential job losses at Tourism Norfolk as the Norfolk Island Administration puts all their (blind) faith into the tourism promotion that Air New Zealand will allegedly embark upon.
* A cynical awareness that whomever was awarded the contract has to virtually do nothing to ensure their revenue is at a satisfactory level - if it falls short, never mind, the Australian government will top it up to a profitable level. In other words, no incentive to "make it work" like previous operators had to do.
My contacts tell me that Norfolk Air was running at some $1 - 1.5 million/year loss for a number of reasons - GFC, better $ value going to Bali, Honolulu &c. This new contract will potentially see subsidies of the same order, no change there except Australian taxes (and ultimately taxes from Norfolk workers) will now pay for that. However, there is the question of terminating the current contract with Our Airline seeing it had some time still to run. Figures as high as $5 million have been mentioned on the Island - and where's that amount coming from, Australian taxpayers or the Norfolk Island Administration? Either way, the general opinion on Norfolk Island is that it would have been better value to keep the encumbent with a subsidy (from Australia) such that allowed Norfolk Air to break even (as against a subsidy which bolsters revenue to a profitable level for Air New Zealand otherwise they wouldn't be involved) and to spend the possible $5 million on tourism.
It is a total act of disregard/disloyalty to Australian workers and Australian companies by the Australian Government, particularly a Labor government. The notion of subsidising other than an Australian carrier is unbelievable and I would love to hear the Australian Government's justification for such treachery.
I'm not holding my breath ...........................
Last edited by zanzibar; 22nd Dec 2011 at 10:15.
Reason: spelling, clarification