Milford Sound sub venture to close

The company made the announcement as it posted a $521,000 loss for the six months ended December compared to a $58,000 interim loss the year before.

Sales revenue for the first half was just $21,000 but that included only a few weeks income from the Milford Sound business, which began operating commercially only on December 8 last year.

The company says that despite an extensive marketing programme and strong initial interest from tourists, it has not achieved the anticipated passenger numbers and bookings have been well short of expectation.

"Demand has been adversely affected by the events of 11 September 2001, the frequently poor weather that has disrupted passengers flying in and out of Milford resulting in numerous cancellations, and the fatal aircraft accident in mid-January.

"While the number of tourists visiting New Zealand has been maintained in the last six months, there has been a distinct change in the make-up of these tourists. High yield American tourist numbers (targeted Submarine clients) in particular are significantly down on last year's numbers."

The company says its submarine Antipodes is a high capital, high staffing-level operation relative to its capacity to carry four passengers per voyage.

"This means targeting a small number of relatively high-spending "free independent travellers". The changes in tourist type have thus not been favourable to the business."

The directors of the business have decided that the current business model is not sustainable and have decided to stop operating the venture at Milford Sound after Easter, on April 7.

Alternatives for the company are now being considered and the directors say one obvious option is the business case for a deep-dive submarine operation in Queenstown, where it has consent to operate up to three deep-dive submarines capable of holding between four to eight passengers.

SUB is a New Capital Market company which floated on the exchange in November 2000 at 50 cents per share, with around 450 investors.

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.