Trans-Tasman Open Skies? Not yet...

 

It is a key piece of New Zealand aviation history and indeed Trans-Tasman international relations that Australia and New Zealand were negotiating an agreement to liberalise the airline markets in both countries, effectively creating a single aviation market, and Australia pulled the plug on it in 1994 - because of fears that it would undermine the sale price for Qantas as it was being privatised at the time.

This article from the Evening Post in 18 June 1992 was written by a former transport Minister at the time, Bill Jefferies (who was transport and civil aviation Minister during the second term of the Lange (then Palmer/Moore) Labour Government, at the time of the Bolger Government. 

The article notes the significance of bringing aviation under CER, with the intention of there being a single aviation market, and Australia choosing to undertake its own merger of Qantas with Australian Airlines (formerly TAA), which has parallels with the Air NZ/NAC merger in 1978.  The merged airline was to have 70% of it privatised.  Jefferies writes that this is all good for the public as he summarises the history of airline markets over the years.  He notes New Zealand liberalised before Australia, as Australia at the time still had only one permitted international carrier (Qantas) and two domestic airlines (Australian Airlines and Ansett) with protected status.  Although Ansett had permission to fly domestically in New Zealand, Air New Zealand could not do so in Australia.  

Jefferies expected the single aviation market would see Ansett integrating its New Zealand services into its Australian operations including being able to operate internationally, but also Air New Zealand could fly domestically in Australia, especially between east coast capitals.  He also noted the possibility of being able to market travel to Australia and New Zealand jointly into overseas markets.

In fact, it all fell apart in 1994.  The effects of this were wide ranging. Air New Zealand's only option to be involved domestically in Australia was to buy 50% of Ansett Australia (and later 100% which required Ansett to sell its New Zealand operations), which would prove to be ill-fated for a range of reasons.  An interim agreement in 1996 sought to take some steps towards a single market, which was concluded in 2000. 

 (I was in attendance as an official at the signing of the Memorandum of Understanding in 2000 between Ministers)

Air NZ - NAC Merger to end? (No)

In 1990 Evening Post transport reporter Shayne Currie wrote an article which claimed that the 1978 merger between state-owned domestic airline NAC (National Airways Corporation) and state-owned international airline Air New Zealand was about to be reversed on 1 January 1991. He was clearly mistaken. 

Some of the claims in the article were:

• Air NZ has excessive overcapacity on domestic routes, due to competition.
• Former NAC CEO Doug Patterson claimed that most benefits from the merger did not occur, and the "sole reason" behind the merger was to give Air NZ more sales offices to compete with overseas airlines.  The domestic and international airlines are "completely different types of businesses".
• Former Air NZ CEO Morrie Davis disputes that, saying it was cross utilisation of staff, aircraft and combined marketing and sales, and claims that had Air NZ's competitive culture not been introduced into NAC, NAC would have lost millions during the late 70s and early 80s due to an aviation industry recession and fuel price increases.
• In 1978 Air NZ had 5,200 staff and carried 910,000 passengers p.a. and NAC had 3,500 staff carrying 2.3m passengers p.a.  NAC made a $4m profit and Air NZ a $3.3m profit.
• The merger was meant to generate savings of $10m through rationalising staff, buildings and equipment, improve services, enable international aircraft to operate on busy domestic routes, infuse competitive attitudes in domestic services and increase domestic freight capacity.
• Doug Patterson claims that had NAC been separate it could have "convinced" government to stop Ansett starting Ansett New Zealand because it "would have been able to put to him in a more effective way the consequences of letting Ansett in".

Airlines split from unhappy marriage

Two long haul international flights in 1990 - a review of flying on the Boeing 747-400

 

It was September 1990 and Evening Post aviation journalist Martyn Gosling wrote about what it was like to make two long haul flights, his first on the then then Boeing 747-400. Notable because the 747-400 had range that enabled non-stop flights between New Zealand and the USA, and one-stop flights to Europe via Asia.  The photo of then Air NZ CEO Jim Scott in a first class seat is not the story of this article.

He noted that although Boeing leads, the Airbus A340 would be available from 1992. He notes that the Economy Class seats of Boeing 707s in 1960 had similar seat widths as the 747-400 in 1990, of 43.6cm, but there is less leg-room and reduced padding.  He also described the conditions on a long-haul flight that affect health, such as the 10% humidity seen in a desert. 

He flew Singapore to Europe on Qantas, and returned on UTA (a now-defunct French airline that was absorbed by Air France fully by 1992) in business class (which at the time would have been only slightly more comfortable than today's premium economy). He preferred Qantas. 

The article notes that Virgin Atlantic apparently wanted a 100-seat Airbus A340 to fly non-stop London-Perth (which like so many statements by Richard Branson, didn't happen).   Finally it notes tests underway for a new entertainment system with personal video screens!

Air Nelson in 1993: Small airline makes smart moves

 

Dominion 14 April 1993

This article from the Dominion in 1993 by Martyn Gosling charts the success of Air Nelson to that date, noting it had just ordered four Saab SF340 aircraft and was leasing another two. The airline at the time was 50% owned by Air New Zealand.  By June 1993 it was expected the airline would have eight Saabs and nine Fairchild Metroliners and was described as one of the fastest growing airlines in the world. Noting it had only a handful of aircraft five years earlier.

After Air NZ took a 50% shareholding it more than doubled its staff to 70 and opened its own maintenance base.  By 1990 it had expanded to 300 staff after Air NZ gave up flying Fokker Friendships in favour of leaving most regional routes to Air Nelson, Eagle Airways and Mount Cook Airline. 

The article noted the NZ market had shrunk by about 20% since 1991, surviving only due to cost reductions and Air NZ withdrawing Boeing 737s from some regional routes.  CEO Robert Inglis noted the main rival was not other airlines but people choosing to drive instead.

It noted that whilst Ansett New Zealand lost $30m in the previous year, Air Nelson broke even and was expecting a profit in the 1993/1994 year.  It was then considering ordering the BAe Jetstream 41, the Embraer Brasilia 120 and more of the Saab SF340B. It choose the Sabbs because of performance , internal space and commonality with existing fleet. It noted that a worldwide downturn in the airline industry was positive for airlines ordering new aircraft due to many cancellations.  

The article noted strong growth in New Plymouth as it considered replacing Metroliners with Saabs, and also that Air Nelson was taking over what were then Boeing 737 services to Napier, due to heavy maintenance for Air NZ's 737 (200s) and a "strong feeling it won't be giving back" those services.  That is exactly what happened. Napier Airport had Boeing 737 services for just over three years with Air NZ, but has not seen regular jet airliner services since.

In 1995 Air New Zealand bought the remaining 50% of Air Nelson, and wound up the airline incorporating its fleet and staff fully into the airline in 2019.

NAC Air Freight

 

Are you 'light-headed' about Air Freight?

Think Big Think Heavy

Argosy

NAC Air Freight System

This leaflet was published by the National Airways Corporation before the merger in 1978, promoting air freight, with a big focus on its Safe Air division, for the haulage of larger freight consignments.  The Armstrong Whitworth Argosy aircraft (of which there were only two operated by Safe Air) were able to haul 12,000 kgs and operated between Christchurch, Wellington and Auckland.  

NAC focused not just on speed, but also the need for much less packaging and savings on pilferage (a known issue with railways in the 1970s), insurance and warehousing.  The leaflet ends with a complex depiction of the NAC air freight network, which is almost entirely passenger routes (including those by Mount Cook Airlines and Stewart Island Air Services).  Unfortunately for anyone picking up this leaflet, there are no contact details for an NAC Air Freight Representative, so presumably it is for those that are already NAC Air Freight customers?