AirNZ: considering low-cost option
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AirNZ: considering low-cost option
WELLINGTON (Dow Jones)--Air New Zealand is mulling introducing more cut-price services to help it return to profitability, its chief executive Ralph Norris told National Radio on Friday. . .. .But even the suggestion the airline might adopt a low cost business model has provoked opposition from trade unions who fear the Air New Zealand brand will lose its value. . .. .Norris said Air New Zealand has to make sure it doesn't end up in a situation like its collapsed Australian airline Ansett, which was locked into a high cost structure. . .. ."We have been considering a range of options and certainly the low cost option is one that has been under consideration. . .. ."This is not an easy decision to make. There's a lot of complexity and no decision has been made. . .. ."In regard to the strategy going forward, we are very much building the airline, not destroying it," he said. . .. .The airline, dismissed as small and weak by Standard & Poor's Corp. in a recent report, is 82%-government owned after being rescued earlier this year with a NZ$885 million bailout. . .. .The company is facing strong competition in its domestic market from Qantas Airways, and following the collapse of Ansett, lacks a partner in the Australia domestic market to feed travelers into its trans-Tasman and international routes. . .. .Air New Zealand and discount Australian carrier Virgin Blue are in talks to establish a partnership. . .. .Norris said the company doesn't want to give away its strategy to competitors but wouldn't rule out integrating its existing discount carrier, Freedom Air, with the parent's operations. . .. ."Ansett was not able to move very quickly because of its union arrangements, etcetera, that saw it unable to move its cost base down fast enough to compete in a very competitive environment. . .. ."We have to make sure that Air New Zealand going forward has the flexibility to enable it to respond to competition because as we saw with Ansett, an airline can unravel very quickly," he said. . .. .Norris indicated that another option under consideration is running its domestic operations on a discount basis while maintaining a full service international airline. . .. .Demand for air travel is beginning to recover from the slump induced by the Sept. 11 terrorist attacks, Norris said, but at the same time capacity will also grow. . .. ."The recovery will be quicker than anybody anticipated but there is this issue that a lot more capacity is suddenly coming back into the market place and putting more pressure on fare levels," he said.
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ALPHA 41 - Basically, it will never be in the interests of any sovereign country to be in a position of having its inbound tourism/freight etc controlled by a foreign power - hence Air Vanuatu, Air Pacific, Royal Tongan, Polynesian, etc etc - that is why ANZ may rebrand, reform, rethink - but not disappear, and why QF will not ever be allowed a significant stake - a % maybe, but no biggie, they have had a % in the past - as to being a joke, well, ANZ may be embattled @ the moment, but continues to provide a high std of service/transportation - it is unfortunate thet you along with a few other regular contributors in here are so blinkered/blinded by hatred you react mindlessly to any given opportunity to slag ANZ or NZ - I have asked before - WHAT IS YOUR PROBLEM??? - Like my Mum used to say, if you can't say anything nice, don't say anything at all.
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....................(silence). .. .Oh ****** it.. .. .Nationalism is no argument for commercial viability. If Austrailan Taxpayers had bailed QF out to the same extent (pro rata population)as ANZ it would have cost the Australian taxpayer AU.19 Billion.. .. .Somehow I do not think our perocialism extends that far.. .. .With DJ and QF biting at ANZ's heels in New Zealand, combined with ANZ's own ineptitude, it is onl a matter of time before ANZ either goes the way of AN or subjects itself to being a regional carrier owned by either QF or DJ.. .. .Maybe they could call it TEAL............
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Was it not the members of the National Business Council of New Zealand that was up in arms recently about certain increase in import/export charges levelled squarely on all transactions by the NZ govt to help recoup funds from their massive capital injection?. .. .The head of the council was reported as saying that if Air NZ cant afford to be run on its own back then it should be shut down in favour of someone that can!. .. .To make matters even worse they suggested that with respect to increases in freight fees at Air NZ that they are strongly urging their members to use other airlines for freight work who charge less.. .. .A big call in a small country but at least its realistic!
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It would seem to me that Air NZ are running along as normal with little to no plan in place and policy changes on the run. The usual screams of indignity aside Air NZ is not in the best of positions and the Government will have to continue funding them to allow survival. They will of course survive but they will never be a big player in the overall scheme of things. With DJ most likely staring trans Tasman sevices and Qantas operating domestically with good load factors , Air NZ's cashflow projections would make interesting reading. Personally I don't think QANTAS are interested in buying into Air NZ as there is little benefit to them and lets face it Dixon isn't going to do anything that will cost him money in the short to medium term. Anyway there are other more commercially viable solutions to QANTAS's long term aims of reducing crewing costs etc.. The following statement though sums up NZ management to a T.. ."This is not an easy decision to make. There's a lot of complexity and no decision has been made. . .. .Sounds familiar.
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Once again you all seem to magnificently miss the point being made and descend into school yard invective - and while the word one of you was looking for is "parochialism", you confuse my reference to "national interest" with "nationalism" - quite a different thing - as again, is "parochialism". I was not intending to be either 'parochial" or "nationalistic" but to broadly express the global concept of "national interest" and that airlines, while "businesses" are also instruments of "national interest". If this is to hard for you guys, then I suggest you refrain from any response, rather than an unreasoned one.
