Merged: Origin Pacific ceases flying
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"that money is theoretically untouchable"
Everything works in theory dude.
Hope thier going to use the cash from the "profitable" freight operation to sort out the passengers and staff left out of pocket. I remember last time it all went bad some staff had been eyeing up what the could sneak out the door in place of there holiday pay. Computers unplugged and ready to go.
Everything works in theory dude.
Hope thier going to use the cash from the "profitable" freight operation to sort out the passengers and staff left out of pocket. I remember last time it all went bad some staff had been eyeing up what the could sneak out the door in place of there holiday pay. Computers unplugged and ready to go.
Originally Posted by RevMan2
(I think someone at NZ's actually asleep at the switch - they haven't done this yet..)
The priceband just moved to $97/$261......
Increased marginal revenue of between $11 and $91 per seat in those buckets. Not bad!
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Ok, I have been out of the loop for a while - but here a a couple of genuine questions:
1. After the bail out in 2004 why was the company not more accountable to the shareholders with regard to profitability?
2. Now, prior to ceasing operations, more cash injections were requested to keep the company afloat. Why was this so sudden and the request made too late to save the company? Why was this lack of profitabilty not obvious to shareholders much earlier?
3. I saw in the Dominion Post today that Mike Pero was offering to buy the freight operation. It mentioned he had a 25% stake in the company. Why get burnt again and again? Surely he would have abandoned the ship long ago at the first sign of trouble? Or is he attempting to buy into the only profitable area of the business to recoup losses?
So many questions and so little bandwidth...from an outsider I can't see any logic in how it has all unfolded with 20/20 hindsight of course!!
1. After the bail out in 2004 why was the company not more accountable to the shareholders with regard to profitability?
2. Now, prior to ceasing operations, more cash injections were requested to keep the company afloat. Why was this so sudden and the request made too late to save the company? Why was this lack of profitabilty not obvious to shareholders much earlier?
3. I saw in the Dominion Post today that Mike Pero was offering to buy the freight operation. It mentioned he had a 25% stake in the company. Why get burnt again and again? Surely he would have abandoned the ship long ago at the first sign of trouble? Or is he attempting to buy into the only profitable area of the business to recoup losses?
So many questions and so little bandwidth...from an outsider I can't see any logic in how it has all unfolded with 20/20 hindsight of course!!
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You have to understand how Inglis operates. He is a sufficiently charismatic figure to be able to get away with his autocratic style of management, convince investors, and so forth. However, he isn't a particular clever businessman. This is well known, and his record confirms it. He managed to persuade everybody that he had the ability to turn it around, and the creditors badly wanted to believe that he could. The investors were way too excited about getting involved in an airline to see the risks - particularly Pero, a failed Mt Cook F/O who just wanted to get back into aviation, and saw investing in Origin as possibly his only chance to do so. He probably expected to get some flying out of it too.
I don't know about the Lower Hutt investors, but Pero very quickly discovered the true nature of a business relationship with Inglis, and was out almost before he was in. He claimed that the business was in safe hands and on the right track, which it clearly wasn't - in other words, there was almost certainly a boardroom bust-up which Inglis won.
Pero is not a very clever businessman either. He may have made a lot of money out of his mortgage business, but that sort of success doesn't make you a clever businessman per se, it just means you got lucky. Some of the investments he has made since moving out of the mortgage business have been very odd.
Time will tell, as it always does, but I doubt that Inglis can get out of this one intact, and I am sure that Pero is just trying to protect his investment.
What NZ badly needs now, is someone to start a new third-level carrier with a sensible business plan and some experienced, innovative and skilled managers. There is definitely room for another carrier, but it has to be done properly from the start - no fancy buildings, correct choice of aircraft, a proper low-cost model, and enough money to get past the first two years.
Any takers?
I don't know about the Lower Hutt investors, but Pero very quickly discovered the true nature of a business relationship with Inglis, and was out almost before he was in. He claimed that the business was in safe hands and on the right track, which it clearly wasn't - in other words, there was almost certainly a boardroom bust-up which Inglis won.
Pero is not a very clever businessman either. He may have made a lot of money out of his mortgage business, but that sort of success doesn't make you a clever businessman per se, it just means you got lucky. Some of the investments he has made since moving out of the mortgage business have been very odd.
Time will tell, as it always does, but I doubt that Inglis can get out of this one intact, and I am sure that Pero is just trying to protect his investment.
What NZ badly needs now, is someone to start a new third-level carrier with a sensible business plan and some experienced, innovative and skilled managers. There is definitely room for another carrier, but it has to be done properly from the start - no fancy buildings, correct choice of aircraft, a proper low-cost model, and enough money to get past the first two years.
Any takers?
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MOR - I suggest you have a crack at running an airline (or indeed a mortgage lending business) yourself before passing judegment on someone's skills as a businessman. There is nothing "lucky" about making money from Air Nelson or from a mortgage lending business. Running an airline is an extremely difficult proposition at best let alone an independent regional airline competing against a government owned entity.
I don't doubt RI made some significant errors that contributed to the situation OP is now in. I don't know the guy but it would seem his personal style isn't conducive to team building. However everyone should balance this against the realities of operating an airline in the current economic environment (read fuel prices). To paraphrase Geoff Dixon who may not be very popular on these pages but does know a bit about airlines; an airline is a business where it is possible to operate in a monopoly, do everything right and still lose money. Anyone who doesn't understand that shouldn't be in the business.
I don't doubt RI made some significant errors that contributed to the situation OP is now in. I don't know the guy but it would seem his personal style isn't conducive to team building. However everyone should balance this against the realities of operating an airline in the current economic environment (read fuel prices). To paraphrase Geoff Dixon who may not be very popular on these pages but does know a bit about airlines; an airline is a business where it is possible to operate in a monopoly, do everything right and still lose money. Anyone who doesn't understand that shouldn't be in the business.
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Revman2
I'm in!!!
JetA_OK
I have run several businesses (I still run two), and I have had a few business dealings with Mr Pero. I ave also been involved in airline management at a senior level (not in NZ).
In the case of Inglis, his first two attempts (Mot Air and Air Nelson) were dismal failures. Once Air NZ had taken Air Nelson from him, it was virtually impossible to fail, as he only had to manage a feeder that had (at the time) virtually no competition. He had Air NZ's money and backing, what more did he need? Even a mediocre manager could have done that job.
When he started Origin, he had a lot of money behind him, but instead of using it to get the airline profitable, he wasted it building unnecessary buildings and buying/leasing the wrong aircraft. It was a downward spiral from there, his only skill was in convincing creditors and investors to part with their dosh. In a business sense, Origin was never run properly. One example would be fuel hedging - the way Euro airlines buy their fuel to avoid price spikes - I doubt that Inglis even knows what it is. Origin don't seem to have ever done it.
In the case of Pero, he was lucky enough to tap into a market just as it was taking off. He was clever in the way he exploited it, but if you examine his recent business decisions, they are very poor. A successful businessman is one who can take any company, regardless of the industry it is in, and make it profitable. Starting one successful business doesn't prove much at all, many people with marginal skills have done it - you just have to be at the right place at the right time.
In my own businesses, I often have to deal with companies run by their founder, that have been successful despite their principal being a shocking businessman. It often is luck rather than good management - that saying exists for a reason!
I'm in!!!
JetA_OK
I have run several businesses (I still run two), and I have had a few business dealings with Mr Pero. I ave also been involved in airline management at a senior level (not in NZ).
In the case of Inglis, his first two attempts (Mot Air and Air Nelson) were dismal failures. Once Air NZ had taken Air Nelson from him, it was virtually impossible to fail, as he only had to manage a feeder that had (at the time) virtually no competition. He had Air NZ's money and backing, what more did he need? Even a mediocre manager could have done that job.
When he started Origin, he had a lot of money behind him, but instead of using it to get the airline profitable, he wasted it building unnecessary buildings and buying/leasing the wrong aircraft. It was a downward spiral from there, his only skill was in convincing creditors and investors to part with their dosh. In a business sense, Origin was never run properly. One example would be fuel hedging - the way Euro airlines buy their fuel to avoid price spikes - I doubt that Inglis even knows what it is. Origin don't seem to have ever done it.
In the case of Pero, he was lucky enough to tap into a market just as it was taking off. He was clever in the way he exploited it, but if you examine his recent business decisions, they are very poor. A successful businessman is one who can take any company, regardless of the industry it is in, and make it profitable. Starting one successful business doesn't prove much at all, many people with marginal skills have done it - you just have to be at the right place at the right time.
In my own businesses, I often have to deal with companies run by their founder, that have been successful despite their principal being a shocking businessman. It often is luck rather than good management - that saying exists for a reason!
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Originally Posted by JetA_OK
MOR - I suggest you have a crack at running an airline (or indeed a mortgage lending business) yourself before passing judegment on someone's skills as a businessman. There is nothing "lucky" about making money from Air Nelson or from a mortgage lending business. Running an airline is an extremely difficult proposition at best let alone an independent regional airline competing against a government owned entity.
I don't doubt RI made some significant errors that contributed to the situation OP is now in. I don't know the guy but it would seem his personal style isn't conducive to team building. However everyone should balance this against the realities of operating an airline in the current economic environment (read fuel prices). To paraphrase Geoff Dixon who may not be very popular on these pages but does know a bit about airlines; an airline is a business where it is possible to operate in a monopoly, do everything right and still lose money. Anyone who doesn't understand that shouldn't be in the business.
I don't doubt RI made some significant errors that contributed to the situation OP is now in. I don't know the guy but it would seem his personal style isn't conducive to team building. However everyone should balance this against the realities of operating an airline in the current economic environment (read fuel prices). To paraphrase Geoff Dixon who may not be very popular on these pages but does know a bit about airlines; an airline is a business where it is possible to operate in a monopoly, do everything right and still lose money. Anyone who doesn't understand that shouldn't be in the business.
You would have to be a complete moron to lose money with a monopoly, you only have to price your product to cover expenses and make some money. Which is what Air NSN did and they operated as part of the Air New Zealand monopoly very successfully. Inglis got a lucky break, back then pre 1990's Air NZ was a state run inefficient entity and no-one at the time involved with it was interested in setting up a proper domestic operation with appropriate aircraft, so when the Friendships left it was handed to Inglis on a plate. The rest is history.
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[quote=MOR] He had Air NZ's money and backing, what more did he need? Even a mediocre manager could have done that job.
I agree.... and would take that idea a little further.
Without wanting to sound too melodramatic.....I believe, RI dreamed he was destined to be a major player in the NZ airline scene with or without Air NZ 's help. In other words, he never really recognized the "hand that fed him" was Air NZ's.... without them he was destined for mediocrity!
However, one must have some business skills to survive (especially) in aviation. RI's... "skill"... was rubbing shoulders with the right people, hence his close association in the 80's/90's with the Brierly pirates..... sever that connection/influence and it all slowly came unravelled. Combine a healthy ego and enough knowledge of "piloting" to be liability and you end up with Origin Pacific story..... which I'm sure isnt finished yet.
Interestingly, the Brierly code of business ethics was well learnt and applied along the way.
I agree.... and would take that idea a little further.
Without wanting to sound too melodramatic.....I believe, RI dreamed he was destined to be a major player in the NZ airline scene with or without Air NZ 's help. In other words, he never really recognized the "hand that fed him" was Air NZ's.... without them he was destined for mediocrity!
However, one must have some business skills to survive (especially) in aviation. RI's... "skill"... was rubbing shoulders with the right people, hence his close association in the 80's/90's with the Brierly pirates..... sever that connection/influence and it all slowly came unravelled. Combine a healthy ego and enough knowledge of "piloting" to be liability and you end up with Origin Pacific story..... which I'm sure isnt finished yet.
Interestingly, the Brierly code of business ethics was well learnt and applied along the way.
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Originally Posted by ZK-NSN
"that money is theoretically untouchable"
Everything works in theory dude.
Hope thier going to use the cash from the "profitable" freight operation to sort out the passengers and staff left out of pocket. I remember last time it all went bad some staff had been eyeing up what the could sneak out the door in place of there holiday pay. Computers unplugged and ready to go.
Everything works in theory dude.
Hope thier going to use the cash from the "profitable" freight operation to sort out the passengers and staff left out of pocket. I remember last time it all went bad some staff had been eyeing up what the could sneak out the door in place of there holiday pay. Computers unplugged and ready to go.
If the remaining freight operation is sold (e.g. to Pero), are those debts still payable by the new owner?
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origin cont>?
maybe a misleading title there guys, but i couldnt seem to reply the the last thread on origin...
Im no expert, but at the recent time they did / have got J41'S, J31'S and had on leased a metro to chats- which i believe is also heading home now!
im wondering whats going own behind the scenes there...
Anyway in true pprune tradition why dont we try to help out our fellow conrades ( hope u can take exception woomera) and tell these guy's who are operating these type(s) around the world+ any possible leads to work we can stear them towards..
This is not the first time this has happened in nz .. and whether or not we could see it comming, its a damm shame to see families etc effected!.I sure as hell wouldnt want to be in their shoes.
my 2 cents.
already outbound.
I've merged your original thread into the Origin one.
Woomera (Eastern States)
Im no expert, but at the recent time they did / have got J41'S, J31'S and had on leased a metro to chats- which i believe is also heading home now!
im wondering whats going own behind the scenes there...
Anyway in true pprune tradition why dont we try to help out our fellow conrades ( hope u can take exception woomera) and tell these guy's who are operating these type(s) around the world+ any possible leads to work we can stear them towards..
This is not the first time this has happened in nz .. and whether or not we could see it comming, its a damm shame to see families etc effected!.I sure as hell wouldnt want to be in their shoes.
my 2 cents.
already outbound.
I've merged your original thread into the Origin one.
Woomera (Eastern States)
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Heya Skystar320
Origin operated BaE Jetstream 31/32 and Jetstream 41 aircrafts.
The Airline NELSON based. Origin Pacific Airways operated to the following ports in 2006: Nelson, Christchurch, Blenhiem, Wellington, Palmerston North, Wanganui, Napier, Tauranga, Hamilton and Auckland. A few years back they operated in/out of Invercargill, Dunedin and also did Rotorua and Queenstown (QF Code Share operating with ATR-72 aircrafts) - I hope this helps :-)
P.S I wish all QO staff the best of luck with the future and hope they all move on to bigger and better opportunities. Robert definately had an awesome bunch of dedicated, loyal, professional, fun and hardworking employees and they all will be sadly missed!!!!!!
Origin operated BaE Jetstream 31/32 and Jetstream 41 aircrafts.
The Airline NELSON based. Origin Pacific Airways operated to the following ports in 2006: Nelson, Christchurch, Blenhiem, Wellington, Palmerston North, Wanganui, Napier, Tauranga, Hamilton and Auckland. A few years back they operated in/out of Invercargill, Dunedin and also did Rotorua and Queenstown (QF Code Share operating with ATR-72 aircrafts) - I hope this helps :-)
P.S I wish all QO staff the best of luck with the future and hope they all move on to bigger and better opportunities. Robert definately had an awesome bunch of dedicated, loyal, professional, fun and hardworking employees and they all will be sadly missed!!!!!!
Last edited by Fly_GAL; 21st Aug 2006 at 13:16.