www.viewpoint.net.nz - NZ Transport, Aviation, Logistics & Supply Chain Blog

Another Airline! What do they put in the water in Nelson?

Maori Trust, Ngati Koata has decided to set up a small air charter and freight service. They will lease two 18 seat Jetstream aircraft for the venture (old Origin planes I suspect). The trust is looking for companies that want to use its freight service in the Nelson area.

Recently another Nelson man claimed he was going to set up an Air Charter business but nothing came of it. In this case the Trust has applied for an Air Operators License.

How many regional airlines can a place like Nelson create? NZ is a very small market and some pretty clever and well-backed businesses have tried to enter the regional freight and passenger service. Unfortunately the airways are littered with their wreckage, metaphorically of course. I suspect this will be another one that last 12 – 18 months.

Hamilton Airport is too taxing

I travelled to Christchurch the other day and now have to pay a $5 departure tax from Hamilton Airport for Domestic Travel. The tax^ is required to pay for the interest charges on the new terminal.

Here are my issues with it:

• The Hamilton airport is a regional airport and is the gateway to the region. The terminal needed upgrading because it was by far the most butt ugly terminal for the size of the region it services. In my view the shareholders (being Hamilton City Council 50% and the other regional councils) should have seen this coming, as the business case either always included this or was so far wrong somebody should go. The value of the airport company jumped $22 million in just one year (69%), slightly more than the $600k in interest payments.
• They are charging me a departure tax for a new terminal that won’t be finished for another 18 months. In the meantime it’s portable toilets outside.
• They have twice increased the car parking charges as well. It was $8 a day, then went to $10 a day and is now $20 a day. I am being taxed twice!
• I really really dislike queuing as it is. Now I have to queue twice once for my ticket and the other time to pay departure tax. No four times. I queue to check in, queue for departure tax, queue to handover more tax to get to the gate, queue to get on the plane.

The board and management team lack the ability to think in an ingenious way. Taxing the departing visitor is dumb. I thought the purpose of the airport increase visitors to the region.

A final note. It takes me 30 mins from home to the airport. To get to Christchurch direct is 1:50. If I drive to Auckland it will take me 1 hour and I get a 1:20 flight time, cheaper flights in bigger planes with more leg space, more frequency and better services and lounges. Hamilton Airport assumes people like me won’t do that.

They are wrong.

Ingenious Rating : 0

One person makes all the difference!

Just one person in any one company can make it or blow it. One person can sent you away feeling like the most important person in the world or make you feel like they don’t value your business.

[Read the whole article here] about a less than remarkable service on a flight to Christchurch.

What Origin Pacific lacked

It has been said 'The best way to make a small fortune in aviation is to start with a huge one'. I am sure that Mike Pero might have personally learnt this lesson after sinking $10 million into Origin Pacific. The full-blown disintegration of Origin Pacific last week, confirmed New Zealand’s domestic aviation market has become fully mature.

No one, other than a huge multi-national, has the resources to compete with Air NZ. They, along with Qantas who choose not to do regional, are the Super Powers [see previous post] in the domestic market and there is simply no room for ‘secondary [ugly] powers’, like Origin.  In the ‘business guerrillas’ camp we have small niche operators like Air2there, Sunair and Sounds Air. Each has very niche markets that Air NZ simply doesn’t care about or is too small to enter.

BIG question - Can you become BIG without directly competing with the Super Powers?

Short answer - No!; but the road of business is littered with companies that tried.

There is a place for specialists with a niche market, but ultimately they have to be prepared to stay as “guerillas”.

If you are not happy being a guerilla, then sooner or later you are going end up in the middle ground. To stay there and grow to be BIG, you will have to take it to the Super Powers. Once you reach the never never land of the Secondary Powers, you now must compete in price, service and features. If you can’t compete in that position for a prolonged period of time and if you can’t continue to grow month on month, you are near stuffed!

Now here’s the challenge if you want to be big, somehow you need to grow and yet maintain the nature of guerilla warfare. Making very strategic decisions about the markets, even specific customers you want, the service you will offer and the prices you will charge. If you can continually move the battle front, the Super Powers will struggle to fully understand what you are up to. They will respond with a defense that is already irrelevant as you have move to the next battle field and target.

In my opinion Origin was doomed to failure before their first flight left the ground. They tried to behave and act like super powers, then align themselves with super powers like Qantas, rather than establishing profitable niche markets and attacking and growing through guerrilla warfare.

Agree, disagree, have a question? - Post a comment now.