Shotover Jet weathers choppy water after ownership change

Friday 4th May 2001

By Chris Hutching

Shotover Jet's acting chief executive Brian Kennedy yesterday downplayed the departure of the company's top salesmen and problems with the company's new prototype boats.

Mr Kennedy has taken over as chief executive temporarily pending a permanent appointment following Ngai Tahu's purchase of the stake owned by former managing director Jim Boult. The shares have been steady at 50c for the past few weeks.

With full control at 80%, Ngai Tahu has inherited a company that is attracting record visitor numbers at Queenstown but faces several operational challenges.

Its competitor, Kawarau Jet, has been invigorated with two new shareholders who are taking an active role in management.

Mr Kennedy denied that the difficulties facing Shotover Jet would adversely affect profits in the company's current financial year ending June 30.

In the weeks before Ngai Tahu lifted its stake the company was finalising testing of two prototype boats believed to cost $200,000 each. Before he left the company at the end of March, Mr Boult signaled that things were going well with testing the boats.

But when Mr Kennedy took at the beginning of April one of his first jobs was to axe the new prototype boat.

This was because early in April the Queenstown harbourmaster, Marty Black, with delegated responsibility from Maritime Safety Authority, wrote to the boat manufacturers with concerns about stability, weight, steering and seat design. It was clear Mr Black would be unlikely to certify the boats as they were.

As a result Shotover shelved the new design and Mr Kennedy this week said many of the design issues were yet to be resolved with the builder.

He also downplayed the resignation of Shotover's top salesmen, Steve Lyndsay and Brendan Quill, who have gone over to the opposition and now work for rival Kawarau Jet. Mr Kennedy said replacement salespeople were not being sought.

Although comparisons are difficult, Shotover is understood to provide about 110,000 passenger rides compared with Kawarau's 40,000.

The shareholding of Kawarau Jet changed recently when one of the founding brothers, Neill Kelly, sold his 50% share to Lakes District millionaire and developer John Martin and partner Andrew Brinsley. Mr Brinsley is a Queenstown businessman who sold the Pipeline Bungey business to Ngai Tahu about three years ago. Those close to the deal were surprised at the lack of due diligence carried out at the time. A J Hackett opened a bigger site a few months later and Pipeline failed to take off.

Shotover Jet and Kawarau Jet co-operate in some areas such as the marketing relationship to operate a subsidiary called Helijet and it has been often rumoured in Queenstown circles that the two might merge under a new owner. But Ngai Tahu passed up the opportunity to buy into Kawarau, focusing instead on Shotover Jet where it already had a stake. In recent times Kawarau has sought to widen the kind of product it offers and has innovated with a combined wine trail and jet boat experience.

It has also developed new twin-engined boast with roll bars that provide greater protection against steerage and power failure following a major review by the Maritime Safety Authority.

Meanwhile, Mr Boult declined to comment about Shotover Jet's boats problem. He has moved on to other projects - the Christchurch Tramway and the Christchurch gondola which he is buying from New Zealand Experience for $1.4 million. This compares with the $12 million it cost to build in 1992.

Mr Boult said that for the price he is paying the earnings of the gondola are "acceptable" and he has plans to introduce new attractions and step up dual marketing with the Tramway. Both the gondola and tramway will be managed by Martin Mongan who has 25% of Armada Tourism, the holding company for the two operations.

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