Forum Archive Index - March 2000

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

> 
> - Warren Buffetts criticism of airlines...has any of you ever flown
> in the states? Its a totally different market, a bit like bus travel
> with a million different operators, very different to NZ.
>
>
And airports and customer expectations are different too.   In large 
US airports, airlines have their own stand alone terminals.  
Effectively mini-airports within airports.   And customers expect to 
have to walk long distances to seek out different airlines.

In New Zealand people expect everything to be in one terminal, and 
you can be sure that if a third domestic airline did start the Ansett 
and Air NZ counters would not just be 'shifted over' to make way for 
the newcomer.   Compass airlines had real problems competing in 
Australia because their 'terminals' (if a prefabricated shed down the 
wrong end of the airport property counts as such) were such a hassle 
to get to for the public.   Establishing a new airline is easy.  But 
establishing a *successful* new airline is far more difficult.

Then there is the matter of Landing rights.    You can't just start 
up an international airline and expect to fly into any overseas 
airport that you choose.   Hence all the fuss about AIRVA and AIRVB 
shares.   If landing rights weren't a valuable asset there would be 
no need for such a division.   In the USA  domestic airfares have 
tended to be high and international air fares low (the opposite of 
NZ)  so the landing rights issue do not impact profitability as 
much with US based airlines.

>
> Also - nearly all good investments have competitors, (the likes of
> AIA is an exception).
>
>
You are joking aren't you?  There are other international airports in 
New Zealand you know, and not everybody wants or needs to go to 
Auckland.    Ports of Auckland thought they had a monopoly on trade 
into Auckland, but look what the Port of Tauranga did to them.
 SNOOPY





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