Forum Archive Index - May 2001

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

Thanks Brian, Greg, Andrew and Peter for your useful comments on this 
topic.

Greg, perusing 800 articles and coming up with the reasoned 
conclusions you did would put many pro analysts to shame, so you 
need not apologize for not being one.  I was interested in your 
bracketed comment

"(the SAAB is a reliable work horse on existing
routes but they could do with 2 more, also more ATRs
and focus on the shorter main trunk routes, and focus
the Beech 1900s on the short provincial routes)."

Now it seems to me that you are suggesting larger planes are needed.  
Yet back in the early Air New Zealand domestic days, did they not run 
Fokker Friendships (around SAAB capacity) on these routes, a plane it 
would seem in hindsight was too big to be economic?   So I am curious 
at your reasoning behind this statement.

Further, I am also curious about the situation with code sharing and 
international landing rights.  Now I understand the usefulness of Air 
New Zealand using a star alliance partner to fly into London, rather 
than a half full plane of their own.  But this doesn't mean they have 
given up their landing rights into Heathrow, London does it?   Or did 
they never have landing rights there, was it only to Gatwick the 
other London Airport?  But if Air New Zealand aren't actually flying 
any of their own planes to London, and have no future intention of 
doing so, just what rights is Helen Clark talking about negotiating 
with the British government.  I guess I'm a little confused as to how 
this landing rights system works.

Andrew, I see the point about Virgin Blue being an Australian 
Airline.  I suppose you mean it is registered as a company in 
Australia.  But it is still British *owned* by the Virgin Group in 
the UK, so in that sense it is British.   And it would seem that it 
is the ultimate ownership, rather than where the airline company is 
incorporated, that is the key issue as regards trading off 
international landing rights.

I know that Virgin Blue has nothing to do with the 
European operations of Virgin Atlantic.   While technically correct, 
both airlines still both enjoy the support of the same shareholder. 
It is hard to imagine that Richard Branson regards them as 
completely separate, even though legally, they are.

I don't see Singapore Airlines getting too concerned about the short 
term performance of Air New Zealand.  In fact I would suggest it 
rather suits them that Air New Zealand has a couple of bad financial 
years.  If Air NZ/Ansett don't meet certain profit targets, then no 
top up payments to Brierley Investments are required, thus saving SIA 
millions of dollars!  In fact it wouldn't be beyond the bounds of 
possibility that two years out SIA might use their influence on 
Branson to engineer a merger between Ansett and Virgin Blue.  Air 
NZ/Ansett CEO Toomey is jumping up and down about the Impulse/Qantas 
merger at the moment.  I don't think that is going to be called off. 
But by getting the Australian commerce commission to officially 
sanction that, how could the Commerce Commission not sanction a 
merger between Ansett and Virgin Blue down the track?   How is that 
for a grand conspiracy theory?

And now to Peter's latest 'rave' on the subject ;-)

"I cannot agree with you with Air New Zealand is
currently demonstrating any reasons why they should be
treated as a 'best in breed'."

Well, I didn't exactly say that.   I said that if you were to invest 
in airlines you should invest in the best ones.  Unfortunately for 
Air NZ both Qantas and Singapore airlines (the direct 
competition) fall into that category!   

Personally I think Air New Zealand are well managed.  They have to be 
to 'hang in there' with the competition!  It seems to be a series of 
factors (intense competition in Australia, downturn because of the 
olympics, digesting the different culture of Ansett, a spike in fuel 
prices and the weak New Zealand dollar) any one of which they could 
have coped with, but when all 5 hit together, well, it hurts!  I 
regard myself as slightly 'underweight' in Air New Zealand but won't 
be buying any more of them until I have a clearer picture as to how 
they will fund the 5 billion dollar fleet upgrade for Ansett. SNOOPY

(disc: Hold AIR)



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Message sent by Snoopy 
e-mail  tennyson@caverock.net.nz
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"You can tell me I'm wrong twice, 
but that still only makes me wrong once."


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