In a week of company reports, the vast majority contained good news. Air New Zealand was a glaring exception.
A national airline losing money in an industry that is booming doesn’t make sense.
They have engine issues – that is real and it's not over.
They have eight grounded planes and planes that don’t fly don’t make money.
They have issues getting planes, but that has been applicable to everyone.
So it's a perfect storm of sorts. But if you read the report the engine compensation was $55 million, but the bottom line would have been $90 million if the engines were on the plane.
But add $90 million to the loss and you still aren't making a lot of profit.
They blame domestic demand, or lack of it.
They blame increased charges and they are real. The cost-plus-accounting of landing charges and so on is not only material, but criminal, and the Government as a main shareholder needs to do more.
Then enter David Seymour in election year who says we should sell the thing. "Go woke, go broke" and "they are too politically motivated," says Seymour.
Seymour is wrong. We need a national airline. Just imagine the sale to a private operator and the thing tanks. A country needs an air network and Jetstar isn't it. The Government has saved Air New Zealand before, they could do it again as a country with no airline is not a country.
But that doesn’t mean Seymour is completely wrong; Air New Zealand is woke and it does have reputational issues.
It has focused on uniforms and departure videos to a degree that is laughable. The great airlines like Emirates, Singapore, and Qatar have ordinary uniforms and ordinary videos, but world class product and a shedload of profit. That is where Air New Zealand is badly missing.
Too often they charge first-world prices for budget services and domestically the services are not reliable enough.
There is a line between their genuine issues and their brand issues. They do have problems, but they also don’t look like all they could be and haven't for years.
Some of it is a small country with a small population. Some of it is too much purple and too much PR around Cassava crisps and $800 flights to small towns.
The CEO has a hell of a job. The turnaround, they say, is coming.
If you read this week's report, I don’t see it yet.
Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings - where this article was sourced.
They have eight grounded planes and planes that don’t fly don’t make money.
They have issues getting planes, but that has been applicable to everyone.
So it's a perfect storm of sorts. But if you read the report the engine compensation was $55 million, but the bottom line would have been $90 million if the engines were on the plane.
But add $90 million to the loss and you still aren't making a lot of profit.
They blame domestic demand, or lack of it.
They blame increased charges and they are real. The cost-plus-accounting of landing charges and so on is not only material, but criminal, and the Government as a main shareholder needs to do more.
Then enter David Seymour in election year who says we should sell the thing. "Go woke, go broke" and "they are too politically motivated," says Seymour.
Seymour is wrong. We need a national airline. Just imagine the sale to a private operator and the thing tanks. A country needs an air network and Jetstar isn't it. The Government has saved Air New Zealand before, they could do it again as a country with no airline is not a country.
But that doesn’t mean Seymour is completely wrong; Air New Zealand is woke and it does have reputational issues.
It has focused on uniforms and departure videos to a degree that is laughable. The great airlines like Emirates, Singapore, and Qatar have ordinary uniforms and ordinary videos, but world class product and a shedload of profit. That is where Air New Zealand is badly missing.
Too often they charge first-world prices for budget services and domestically the services are not reliable enough.
There is a line between their genuine issues and their brand issues. They do have problems, but they also don’t look like all they could be and haven't for years.
Some of it is a small country with a small population. Some of it is too much purple and too much PR around Cassava crisps and $800 flights to small towns.
The CEO has a hell of a job. The turnaround, they say, is coming.
If you read this week's report, I don’t see it yet.
Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings - where this article was sourced.
3 comments:
Air NZ should make a profit when opposition airlines are stifled by Air NZ tactics .
The fuel, maintenance and airport charges are standard costs for all airlines .
That leaves wasted employee expenses or unproductive tiers of management and the endless costs of Air NZ employees.
The management questions have to be asked weekly to employees ; WHAT DID YOU DO this week? How many were DOING the same task?
Last week my wife and I needed to spend time with family in New Plymouth (we live in Auckland). To fly it was going to be around $200 ea to NP, and a Sunday return was $400 ea. We drove.
What did you do this week ???
Good question, because I live in Napier. Going to the shop I have to cross a busy intersection where Napier council found the need for a roundabout.
That in itself might be a good idea, however trafiic light would solve the problem.
Now, for a whole week I passed there ( on my bike ) about 4 times, seeing 6 people attending of which 2 did do something and the other 4 were on their mobile phone, playing ?? games ??
That is 4 times 8 hours times 4 days what rate payers had to for out for.
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