Norfolk Air Tender

[ringbinder]

WRONG, 17 Floors.

Went to a foreign airline.

[GreggP]

NZ the winner

Its official Air New Zealand are the new Australian domestic carrier...

[down3gr33ns]

Better check your sources, 17, 'cos I believe that Virgin weren't even a contender.


What a "great" decision by the current Australian government, paying a subsidy to a foreign carrier - defies any semblance of logic!!! My sources advise me that several Aussie operators put their hats in the ring - a proper response to which which would have meant job security for Aussies, &c etc. Will also potentially mean less jobs for the NLK'ians currently employed under the existing arrangement.

But, remember, this is the same government that single-handedly ruined the live meat export industry (you can't tell me that the Indo's cutback on quotas isn't "payback"), have stuffed the refugee situation, couldn't organise a p1ss-up in a brewery - OH! where do I stop - but have rewarded themselves by accepting massive pay rises (of the order generally larger than the average wage) in the belief they are doing a good job. FFS!!!!

I hope ANZ lifts their game. They have a history of not even launching from AKL if the forecast is bad. Their current weekly AKL-NLK v.v. can run several days late on the strength of a forecast. E.g. only recently there was a weekend where the encumbent operated at least 4 sectors successfully into the island whilst ANZ sat on the ground - all on the strength of forecasts which turned out to be far worse than the actual conditions throughout the weekend. They eventually turned up 4 days later!!!! I feel for the Islanders of whom many are friends - your reliable service (to the west) is about to be a thing of the past, have no doubt.

My taxes at work. At least I don't vote for them so am in no way responsible for yet another far cup!!!!!

[down3gr33ns]

Here it is:

Media Releases > 2011 > December > Norfolk Island airline contract awarded
Norfolk Island airline contract awarded




21 December 2011
SC153/2011
Regional Australia Minister Simon Crean today announced Air New Zealand has been awarded the contract to operate regular return airline services to Norfolk Island from Brisbane and Sydney.
The Federal Government awarded the contract following a tender process for an underwritten air service to the Island.
Air New Zealand will commence services in March 2012 using a 168-seat A320 aircraft.
Minister Crean said the announcement was a great outcome and natural fit for the airline.
"Air New Zealand has operated into Norfolk Island since 1947 and has significant presence in the Tasman market,"
Mr Crean said.
"The airline currently operates a weekly service between Auckland and Norfolk Island.
"Attracting a carrier of this size and experience will kick-start Norfolk Island tourism activity and provide greater economic opportunities for the community.
"The contract means the Norfolk Island Government will no longer have to carry the huge financial cost of running an airline.
"Those funds can now be directed towards other important community services and infrastructure.
"The Federal Governments commitment to underwriting an air service to Norfolk Island is part of the broader strategy to achieve a sustainable future for the Norfolk Island community."

----------------------------------------

"an underwritten air service to the Island." Give some more money away like they're good at.

"was a great outcome". Yes, for ANZ. Hard to see for whom else.

The new operator does not have to market things, they are going to get paid at any time the revenue falls below a nominated threshhold - their nominated threshold - and of which you can be sure represented a viable operation anyway and, as such, they have no incentive to spend money promoting things. In fact, the emptier they can fly an aeroplane, the better, because it costs less than a partially filled aeroplane and they get the subsidy up to their threshold NO MATTER WHAT!!! The pipe dream that it " will kick-start Norfolk Island tourism activity and provide greater economic opportunities" is just that, a pipe dream 'cos ANZ have no incentive to do anything other than collect the subsidy on a regular basis. Simple, just like our politicians.

[Skystar320]

I'm glad I wasn't the only one! Absurd!!!!!!!!!!!!!

[ringbinder]

17 Floors - you changed your post from "rumours on the Island and Virgin" to now nominating ANZ as the winner - and all 8 hours or so before the official announcement!!!

Somewhat misleading or opportunist, don't you think?

[apacau]

I imagine DJ will codeshare on the route? So maybe you might at the very least see a DJ flight number on the flights ex AUS!

[jarden]

So no more MEL-NLK and NTL-NLK runs as no mention of them in media release
Has NZ got an A320 spare 4 days a week to operate it?
What will happen to Our Airline's 733 its now made redundant going back to INU?
Will be shame to loose their distinctive green livery from our airports and less flight routing options. I wonder how much this new deal is saving the Norfolk Government on the old one?

Yes I know too many Questions...

[slamer.]

So TP & S320 .. please explain ... why will they live to regret it ......................

____________________________________________________________ ___________________________________


Air NZ to offer Australia-Norfolk Island flights


1:33 PM Thursday Dec 22,


Air New Zealand has won an Australian Government to operate flights between the Australian cities of Sydney and Brisbane and Norfolk Island.

Air New Zealand will begin operating twice-weekly services between two Australian cities and Norfolk Island from March next year.
The airline won an Australian Government tender to run the flights, which will complement its existing weekly services between Auckland and Norfolk Island, a tiny external territory of Australia which lies around 800km northwest of New Zealand.
Air New Zealand Group General Manager Australasia, Bruce Parton, said the airline had a "long and well-established relationship with the people of Norfolk Island, having been a trusted air service provider to customers there since 1947".
The new services, which will run between Sydney and Norfolk Island on Mondays and Fridays and Brisbane and Norfolk Island on Tuesdays and Saturdays, will utilise a 168-seat A320 aircraft.
Parton said in addition to boosting tourism to Norfolk Island, the additional flights would enable "dual destination travel - for example, Australian travellers will now be able to choose to visit both Norfolk Island and New Zealand on the same itinerary".

Air New Zealand will offer four fare classes on its Australia-Norfolk Island flights: seat only, a seat and a checked bag, The Works (which includes inflight entertainment, meals and drinks) and Works Deluxe, which adds in premium check in, priority baggage, lounge access where available, an additional checked bag, and a guaranteed empty seat next to you in the air.
Bookings for the new services, which will commence on Friday, March 2, will be available from tomorrow.
- NZ HERALD STAFF

[ozbiggles]

I guess its only fair
If Qantas had won it they would have used Jetconnect to do it.
What another classic moment in Aussie Aviation history.
Good to see yet more outsourcing from this incompetent government.

[TBM-Legend]

Overseas jobs and foreign aid to NZ...all on Australian public $$$$$

[Qantas 787]

Just another typical government blunder.....

- Now there are less services per week, MEL and NTL are forgotten. Great for tourism isn't it?
- NZ don't have to do anything now - they can charge what they want, they don't have to 'promote tourism'. Norfolk Air and the island did a lot of promotion, I can't see how NZ will do anything more to add to that.
- The people employed by Our Airline at NLK are out of a job - great lead up to Christmas not knowing what your future holds. And don't assume they will be employed by NZ.......
- Our Airline wasn't a first class airline by any stretch but I just wonder how much 'cheaper' the fares are on a superior competitor? The seat only might be comparable, what about the other options?
- At least if it went to DJ, there is an Australian carrier servicing the destination.

[reubee]

Norfolks closer to NZ then Australia. It should be a NZ territory anyway!

[zanzibar]

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 ...........................

[cavemanzk]

- At least if it went to DJ, there is an Australian carrier servicing the destination.

You are aware that DJ is only around 30% Australian owned now?

[belowMDA]

The accusation that Air NZ won't touch the place when the weather is forecast to be poor is not historically accurate in my opinion. Personally I have launched there many a time where the forecast indicated minimal, if no chance of getting in. In these cases despatch has been contacted and, while leaving the decision to the PIC, have expressed the companies desire for us to give it a shot. I have been pulled in off call/reserve to operate a recovery flight the day following a failed attempt to get in. So it is also not a policy to muck people around with cancelled services, more likely the fact we don't often have spare aircraft sitting around to be able to send off to pick up the pieces at the drop of a hat.
As to the accusation that Air NZ will do nothing to market the place or ensure a successfull commercial operation is also lacking in facts. I see plenty of marketing here in NZ for Norfolk so there's no obvious reason why they wouldn't in Oz too. They are going to do what they can to make money out of the place. The federal government is unlikely to subsidise the place to the extent that Air NZ can make a profit from the subsidy, more likely just not lose barrow loads.
In summary I really do think they are going to do what they can to make this a success.

[porch monkey]

How'd you come up with 30%?

[cavemanzk]

How'd you come up with 30%?

Virgin Group - 49%
Air New Zealand Group - 20%

Total foreign ownership 69%

Roughly only leave 31% in Australian ownership.

[porch monkey]

Best you check your numbers again, dude. Since when has the "virgin group" necessarily been all foreign ownership? In fact, apart from ANZ and Branson, (combined at about 40%), I'd bet most that is left is private and institutional investors. Remember Toll owned most of them untill relatively recently. Bit more homework required mate.

[witwiw]

plenty of marketing here in NZ for Norfolk

Things must have changed quite a lot then as I recall very little on all of my trips to NZ. And what I saw was from Travel Agents and not the airline.

I think, MDA, you are a little naive if you believe:

government is unlikely to subsidise the place to the extent that Air NZ can make a profit from the subsidy, more likely just not lose barrow loads.

My understanding of the RFT provided for an operator to declare a nominated revenue return (I forget the actual terminology) and below which there would be a subsidy if that return fell short. You don't honestly believe an operator would nominate a figure that didn't see better than break even, but a profit. Even if "break even", however, is all the Australian governement will subsidise to, I find it incomprehensible that an operator would even consider such an arrangement where it (subsidy) simply minimises the loss - that would be economic madness and a poor utilisation of assets to commit them to a loss making exercise.

Time will tell if this exercise works. I have my doubts.