Guest Post: NZ80

October 6th, 2015 at 12:00 pm by David Farrar

A guest post by Cheryl Parsons who was on NZ80 from Hong Kong on 3 October:

I was one of the unfortunate 311 aboard flight NZ80 from Hong Kong to Auckland on 2/3 October.   Newspaper reports have covered the flight reasonably well but I have a few comments of my own to add.

I was pretty surprised at the sloppy way AirNZ handled this flight.   Being cooped up in an aircraft for 2 hours while the technical people tried to sort out the problem (I gathered something cropped up in the flight check) was no excuse for the cabin crew to do nothing.   One and a half  hours into the delay we were still getting half hourly messages from the flight deck that a longer delay was imminent plus a rather crabby hostie telling off passengers at the rear of the plane that their cellphones must be switched while in the aircraft.  

Which we all did because we know what happened to Bob Jones when he broke the rules.   (And I doubt that any of us in cattle class could thumb our noses at AirNZ and buy our own plane for future travel.)

To her credit she did return shortly afterwards to apologise and tell us that using cellphones was OK but was it that unreasonable for people to start texting and phoning family members to tell them of the delay when there was nothing else to do?

During this time I was unaware of any service by cabin crew.   Shortly before the cancellation announcement two staff walked down the aisles with a water jug and plastic glasses but they were too fast for anyone in my row to get water even though we did respond positively to the offer.   Too fast and too late.   Nothing else was offered so I assume there must have been some regulation that prevented them serving us dinner while we waited.

After about two hours we were told that we weren’t going anywhere on that flight which was now officially cancelled and that we were to return to the departure gate following which we would be collecting our luggage and put up in hotels overnight.   Unfortunately this was not to be.

For almost two hours we sat in the departure lounge with little information.   Passengers who lived in HongKong were sent home for the night and told to return the next day.  Announcements made were in Chinese and English but were difficult to understand as they were competing with announcements for other boarding gates and general announcements about local health issues etc.   During this time some of the more savvy passengers got onto the internet and found their own accommodation and left.    Being a transit passenger I hung in there along with other hopefuls.

It was a shambles.   Travellers with young children were left to themselves and a couple of passengers looked quite unwell.   Eventually we were told that first and business class passengers were being put up in hotels, then they would deal with travellers with young children and the elderly.  

At one stage I approached the ground staff to ask that water and something to eat be made available to us but she indicated that she did not have authority to do this.  

At about 10.30 pm we were told that we could collect food vouchers for a meal but this turned out to be a list of airport restaurants with HK$80 scrawled on it and told that on presentation of our boarding pass we would get a meal.   For me this was not to be.   I tried two places with the “voucher” and ended up purchasing my own meal.   I did speak to two passengers who used their “vouchers” and several who did not get a meal as they were told that their “vouchers” were not acceptable.  

At about 11.30 pm when they got around to rooms for the elderly, I finally owned up to my age, told them that I am a pensioner and asked for one of the elderly/family rooms.   Ground staff found seven hotel rooms for us and 1-1/2 hours later after lengthy queues at immigration and the taxi rank, we were on our way.   A 36.1km taxi ride finally got us to our destination hotel at about 2.30 am.    Some of our group had no money on them as they were in transit and had not eaten since lunchtime Friday.   We all felt grizzly and tired.  

After a shower and about 3-4 hours sleep we were down to breakfast in the hotel and in taxis at 9 am (Sunday) on our way back to the airport to check-in for the new flight.   By this stage the hotel had delivered to each of us a written message from AirNZ advising that we were scheduled to depart at 1.50 pm that day.  

Check-in went well with staff on hand to reimburse us (on presentation of receipts) for our dinner the previous night and breakfast that morning.    Then it was back to the boarding gate, onto the aircraft and back in NZ just after 6 am this morning.  

I have absolutely no complaints about the ground staff at the airport.   They were mostly young and conscientious.   But there was no leadership and the staff didn’t seem to know what to do.   I don’t think they had any authority to make decisions and I am sure, from what I saw, that there was no procedure in place for such a situation.  

But there must be – accidents happen, planes break down, crew get sick.  It happens all the time.  In fact AirNZ had a delay with this same flight about a week ago when a pilot was sick and they had a lengthy delay.     They just didn’t appear to have a plan for this situation.

I left NZ on 8 September for a 3-1/2 week tour of Turkey.   I flew Auckland-Singapore on Singapore Airlines and then from Singapore to Frankfurt with Lufthansa.   I was then due to fly on Lufthansa from Frankfurt to Istanbul arriving on 9 September.   However, on arrival in Frankfurt I learnt that all Lufthansa pilots were on strike and all flights were cancelled.   But they had a plan…..

On arrival at the boarding gate for my Istanbul flight I was redirected to an area set aside for all affected Lufthansa customers.    They had about 15 staff at counters to handle onward bookings and we were given ticket numbers and asked to sit down and wait.   I remember I was No. 340 but they must have dealt with hundreds of people that day.   While I was waiting, trolleys with water, cold drinks, sandwiches, savoury snacks and chocolate were wheeled in for customers to help themselves.   After a wait of about two hours I was booked on a Turkish Airlines flight, directed to German immigration and downstairs to Turkish Airlines to pickup my boarding pass so I could be on my way.   I arrived in Istanbul that evening although my bag took a couple of days to catch up with me.  

I was never meant to be in HongKong on 2 October.   I only got there because my return journey from Istanbul to Frankfurt on Lufthansa due to leave at 1 pm on 2 October was delayed which meant that I missed my connecting flight from Frankfurt to Shanghai on Lufthansa later that afternoon.    Again, the delay was handled quickly and without fuss.  A visit to the Lufthansa Service Centre at the airport saw me booked on a Lufthansa flight from Frankfurt to HongKong to connect with the AirNZ flight from HongKong to Auckland.   They also gave me three things – E5 voucher for refreshments, E10 voucher for food and a pamphlet setting out my rights as a passenger when things go wrong.   They got it right.

If only Air New Zealand could be so efficient.

Cheryl Parsons is semi-retired and lives in Auckland.   She ran a small business for a number of years and is involved in the National Party in Maungakiekie Electorate.   She doesn’t like owning up to being a pensioner but sometimes you gotta do what you gotta do…..

UPDATE: A response from Air New Zealand:

The disruption of NZ80 occurred at the same time as a national holiday in Hong Kong as well as bad weather in the region which caused other carriers to cancel flights out of Hong Kong and this resulted in very little accommodation being available in the city.

We did manage to find whatever rooms we could across three hotels for 25 passengers, with priority given to those who were either elderly, in wheelchairs, feeling unwell or with an infant. A number of Hong Kong locals returned to their own homes for the evening but unfortunately around 80 customers who we were unable to accommodate remained in the terminal overnight. We provided them with blankets and pillows as well as water and snacks and have also offered them a cash payment as a gesture of goodwill for their inconvenience.

This year we have invested in additional systems and people to enable us to provide better and more timely communication to our customers. While this was a reasonably unique set of circumstances for a disruption we appreciate there was room for improvement on this occasion and we apologise to our customers for the inconvenience caused to them. We will be reviewing all elements of the event including the feedback received from customers to ensure we can address and refine our processes where required.  

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Great tech ideas from Air NZ

August 27th, 2015 at 2:00 pm by David Farrar

Regan Schoultz reports:

An app will allow travellers to check in, receive flight information, order coffees and enter flight lounges using their Apple watch.

Okay that’s just a watch version of their smartphone app (which is great).

The self-service baggage drop will allow passengers to process and drop off their own baggage manually.

The service will use a biometric camera – the same technology that immigration staff use at the Smart Gate – which will match biometric information, contained inside a passport, with the person’s physical identity to verify they are the same person.

A customer will then be able to weigh and load their luggage on to the belt themselves.

This process is at present carried out by airline staff at a baggage drop-off counter.


That’s pretty cool.

A permanent tag attached to luggage will display bag information and a barcode for any flight.

Passengers input their details using Bluetooth technology which will update the barcode and flight information on the tag.

Also cool.

The airline is also looking to create electronic departure cards that can be filled out by passengers on their mobile phone or home computers before checking in.

The online service will remember personal details of someone if they have previously flown and will automatically fill those out on the departure card.

This is the one that really excites me. I hate filling out those stupid forms, and have often said that surely the airline could provide you with one filled in when you check in, as they have all your details.  So all you’ll really need to do is check it, and sign it.


Best Air New Zealand safety video to date

August 14th, 2015 at 12:00 pm by David Farrar

Love the Men in Black theme.


Sir Bob Jones putting the record straight

June 4th, 2015 at 11:00 am by David Farrar

For those who haven’t seen it, the below is from Sir Bob Jones on what happened on that Air NZ flight:


Twice in successive weeks recently, I slammed the New Zealand media’s ludicrous behaviour in two New Zealand Herald satirical columns, over their infantile excesses following the ponytail incident.  How ironic then that a few weeks later I should be the subject of their obsession with trivia.  Here’s what happened.

I shot up to Auckland for a Vice-Chancellor’s university function, in my honour.  As I’ve done countless times I gave my ticket to the always helpful Koru Club ladies who set about re-organising me into the big leg room emergency seat and if possible, and as indeed in that case, with no-one besides me.  On the flight I was greeted by one of Air New Zealand’s most charming chief stewards, a Chinese chap, took my seat, donned my air phones to avoid the unbelievably childish safety claptrap, and had a pleasant 50 minutes read. 

The following day at Auckland saw a repetition, marked by one of the X-ray machine officers shaking hands with me, saying he hadn’t seen me for a while.  Such is the usual friendly conduct I and doubtless other regular Auckland-Wellington are accustomed to.  Once again, I took my seat, donned my earphones and settled into my book, of which more shortly.  There was a tap on my shoulder.  I looked up to see a young hostess frowning at me and assuming it was the usual seat forward silliness, pushed the side button and returned to reading.  She tapped again.  I took off the headphones. 

“You’re in the emergency seat”


“Do you know you’re in the emergency seat?”


“Do you want to change seats?”

“Not particularly”

She then disappeared and I resumed reading.  Then came another tap.  This time a grim-faced woman of about 60 was glaring at me.  We went through the same rigmarole only she then commanded me, the first such occasion in countless times in that seat, and I’ll wager, the first such time ever, to turn to the wall and read the instructions.  I did so, and turned back and with another glare she started to walk away.  “Childish,” I remarked to the chap beside me.  She heard me, spun around and snapped, “I’ll get the captain.” “OK,” I said and resumed reading.  20 minutes later a couple of security guards appeared so I left with them.

There was a smattering of applause, I assume from people frustrated at the delay, this predictably, subsequently reported as mass cheering.  I’m told the captain then announced that safety was their foremost concern.  The only safety threat, once the doors closed, was of everyone drowning in his extreme wetness. 

What then happened was an abrupt reversal.  I was greeted by a certain senior ground official, plainly disgusted at what had occurred, who took my ticket and said they’ll have me on another flight in a flash.  Half an hour later I boarded again for the usual trouble-free, head-phoned trip south, there absurdly to encounter the camera crew half-wits en masse.

People assumed I’d made a fuss.  Not so, for a very good reason.  In Auckland I’d purchased a recently published Epicurus book, this written by a classicist unconvincingly arguing that financial collapses would become a standard event in future and that unless we adopt Epicurean principles, we’re doomed.  In particular he honed in on what he considered the real victims of the hard-driven market economy; the unskilled underclass who in the highly stratified modern economy, were reduced to utterly tedious repetitious work.  I was musing over that when the grim-faced 60 year old arrived and I realised she epitomised the author’s point.  Decades of mindlessly pouring tea and coffee, but a uniform and by God she was bent on using it and taking her misery out on me.  Even if not very bright she should have worked harder at school back in the 1960s.  Perhaps she realised that and the sight of me engrossed in a book incensed her.  

That afternoon in the Wellington office the manager came in.  He’d just had an email from our managing director, then in New York.  “That puts paid to it,” he wrote.  “We’ll definitely buy a private jet,” this something we’ve been considering.  And so we shall.  I’ve had enough of Air New Zealand’s infantilism.

POSTSCRIPT – I’ve had numerous calls from senior journalist friends saying that someone called Patrick Smellie claimed I made a fuss.  Their uniform response was that if Smellie said that, then I must have been in a coma.  Take heed of the nearby passenger who commented publicly that all I wanted was to read my book and I was being deliberately pestered.

I suspect you can read your book in peace on a private jet!

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Air NZ and WiFi

February 14th, 2015 at 2:00 pm by David Farrar

Stuff reports:

The ability to board a plane and shut off from the world is a luxury in an always-on world of technology. Or so it used to be. Airlines across the world are increasingly offering free on-board wi-fi, or at somewhat affordable prices.

Domestically, it was once an offering on Air New Zealand flights when it launched its Rugby World Cup branded A320s in 2011 (at a trial rate of a whopping $20 per megabyte). Quietly, and presumably because the trial was a flop, in-flight wi-fi disappeared within months and has never returned – not even on the new international 787-9 Dreamliners.

How surprising that people don’t want to pay $20,000 a GB!!!

Qantas in Australia experienced similar disappointment. In 2012 it conducted trials of wi-fi (at prices ranging between $14 and $43, depending on pre-purchased data allowance), but less than 5 per cent of customers used the service. It seems now, though, that New Zealand and Australia’s national airlines are falling behind.

In late 2014, Emirates launched free on-board wi-fi for the first 10MB (enough to check emails and social media accounts), with a nominal US$1 (NZ$1.35) fee for the next 600MB. This includes some flights in and out of New Zealand, such as the daily Auckland-Sydney A380 flights.

That’s not bad.

Eventually, Emirates will offer wi-fi as a free and standard in-flight service, much like its on-board entertainment selection.


Emirates reported a daily average of 3500 global connections across all of its flights last October, with the highest number of users on a single flight being 153 passengers.

Shows there is demand for it at the right price.

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Opt out charges

February 3rd, 2015 at 11:00 am by David Farrar

Stuff reports:

The Commerce Commission’s investigation into Air New Zealand’s “opt-out” charges could be expanded to include other companies using the sales tactic.

The commission confirmed yesterday that it was investigating the national airline over travel insurance contracts on domestic flights that are automatically added unless customers choose to opt out of them.

However, Consumer New Zealand chief executive Sue Chetwin said Air New Zealand was not the only airline that added opt-out charges during the booking process.

“Jetstar aren’t very good and they may be marginally worse than Air New Zealand,” she said.

Jetstar’s website shows several opt-out charges during the booking process for a typical domestic flight between Auckland and Wellington.

These include:

Opting out of a 20kg extra baggage allowance: $11

Opting out of seat select: $5

Opting out of insurance: $10.95

Jetstar has been asked for comment on its opt-out charges.

Opt out charges are a rort. They make money by hoping people will forget to deselect them. I’ve travelled probably 500 times with Air NZ. Not once have I ever had a situation where their flight insurance would have been beneficial. Yet if I did not opt out each time they would have had $5,000 more money from me.

Non-compulsory charges should be opt in.

Wellington lawyer Michael Wigley, who triggered the Commerce Commission inquiry with articles criticising Air New Zealand, said people who bought insurance accidentally should have it refunded, even if they had already had their flight.

“You don’t get any benefit from the insurance if you don’t even know you’ve paid for it.” 



The Press on regional air services

November 13th, 2014 at 11:00 am by David Farrar

The Press editorial:

Air New Zealand’s announcement this week that it will next year end services to Westport, Kaitaia and Whakatane will be a blow to those places. All three are small towns. Whakatane has a population of 15,000, Kaitaia 5000 and Westport 4000. Serving towns of that size in a financially sustainable way is difficult anywhere in the world. Air NZ says it has been losing money on the fleet it has serving those towns. But an air service can be considered nowadays to be as essential as roads and should be judged by more than purely financial criteria.


It is an easy assertion to make but what is the rational case for saying a town of 4,000 people must have air access?

Do all towns in Australia with 4,000 population have air access?

The airline has often been under pressure about its regional services. An University of Auckland study of air services in similar-sized countries to New Zealand last year found that Air NZ had the most coverage of centres with populations of 20,000 or more and the cheapest fares.

Air services should be on a user pays basis. If enough people in a town are willing to pay enough for air service, then a company will provide it. But I see no case for a subsidy.

But an air service is an essential service nowadays. The Government spends billions providing roads and underwriting the railways. Support for air services, even if unprofitable, to places that need them would not be a big step further.

Roads are funded primarily by petrol tax, on a roughly user pays basis. No case has been made for taxpayers to subsidise air services to small towns.

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Air NZ does it again

October 24th, 2014 at 3:00 pm by David Farrar

Another viral smash video from Air New Zealand. Really well done.


Air NZ fares

September 1st, 2014 at 3:00 pm by David Farrar

The Herald reports:

Kiwis wanting to travel to some regional centres are faced with an 18-hour bus ride – or forking out hundreds of dollars for an Air New Zealand flight. And, in some centres, it is cheaper to drive a car-load of people than buy a single airfare.

The Herald has compared the cost of Air New Zealand, Naked Bus and private car prices between North Island regional centres and Auckland or Wellington after Air NZ faced criticism this week for the price of its regional airfares. It found travellers could be paying more than 10 times more for the convenience of flying.

Let’s look at their data.

The Herald comparisons were for travellers trying to fly after, or as close to, 5pm on Friday September 12 and returning on Sunday afternoon.

Flying from Auckland to Tauranga return would cost $438 or $1.07/km, while taking a bus would be just $47.97 or 12c/km, according to prices listed on the companies’ websites.

Those times are basically peak times. Yes they cost $438 at peak times. But leave earlier each day, and the cost is only $238.

Personally I would drive Auckland to Tauranga as the drive time is around the same as fly and airport time.

A return flight between Wellington and Palmerston North was $326 or $1.15/km while the same trip on a bus was just $33.97 or 11c/km.

Again if you avoid peak times can be as cheap as $178 return.

But time is money. If your time is not valuable, then a bus is a good idea.

An Air NZ spokeswoman said the business offered close to a million regional seats for under $100 each year, up 400,000 seats in the past five years.

If you want cheap fares, then don’t fly at peak times.


About time Air NZ

July 5th, 2014 at 9:00 am by David Farrar

Air NZ reports:

Air New Zealand customers will be some of the first in the Asia Pacific region to be able to use their handheld portable electronic devices in non-transmitting mode for the entire duration of their flights following approval from the New Zealand Civil Aviation Authority.

From 16 July the airline will allow the use of handheld portable electronic devices including tablets, smartphones, e-readers and mp3 players during all phases of flight provided the devices are in flight mode. Previously customers could not use their devices during the taxi, take-off and landing phases of flight.

Yay. No more having the Kindle off for almost half the flight.


Abbott’s Qantas dilemma

February 28th, 2014 at 12:00 pm by David Farrar

The Herald reports:

The disastrous results and huge job-shedding announced by Qantas yesterday is battering at the door of Australian Prime Minister Tony Abbott, who must decide what the Government will do for the ailing national airline.

The decision will test his resolve and the Government’s mantra that “the age of entitlement is over” as he comes under furious fire from Labor, the Greens and unions, which have accused him of plans to tie federal assistance to an attack on wages and awards.

I guess they just think taxpayers should subsidise Qantas.

The airline’s A$252 million ($270.5 million) pre-tax half-year loss, and its plans to shed the equivalent of 5000 jobs – meaning the final tally of sacked employees will be even higher – add to the series of Australian corporate icons hammered since Abbott won power in September last year.

These include the end of the local automotive industry with the loss of Holden, Ford and Toyota. The Government has repeatedly said companies must stand or fall on their own.

He’s right.

“We’re determined to help Qantas,” Abbott told Parliament. “We’ll help Qantas by guaranteeing a level playing field [and] by saving Qantas some A$270 million in carbon tax costs over two years … This is a Government which is determined to keep faith with businesses which have made investment decisions honestly and fairly on the basis of government policy. Second, this is a Government which will do its best to ensure, as far as is humanly possible, a level playing field between the domestically produced and the imported product.”

Transport Minister Warren Truss blamed much of the airline’s problems on the carbon and mining taxes, high wages and award conditions, and said fewer jobs were needed with new technology.

Air New Zealand uses technology well. The check in system is almost entirely automated, and the number of staff they have there now is probably 20% of what it used to be – and with far fewer queues.

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Qantas to shed 5,000 jobs

February 26th, 2014 at 7:00 am by David Farrar reports:

QANTAS is gearing up to axe 5000 jobs and sell its terminal at MelbourneAirport to prove to the Abbott Government it can make the tough business decisions required to obtain federal assistance.

The airline may also take the razor to its budget offshoot Jetstar, slashing jobs and routes, as it lobbies the Government to provide it with a lifesaving debt guarantee.

Job cuts, previously forecast to be 2000, are now expected to be closer to 5000.

They have around 33,000 employees so that is a massive one in seven or so to go.

With the airline already forecasting a loss of $300 million, a radical overhaul of operations is being finalised, with the company determined to show real reform in order to secure the debt guarantee it has been seeking from Treasurer Joe Hockey.

Their revenue is $16 billion so the loss is only around 2% of revenue. However many of their costs such as depreciation and fuel can’t be reduced. They have 50 million passengers a year so to break even need to reduce the cost per passenger by at least $6.

Air NZ in 2012 made a $70 million profit on $4.5b revenue so close to a 2% profit on revenue. With 12 million passengers that is a profit of around $6 a passenger.

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Half the passengers will definitely pay attention to the safety video!

February 13th, 2014 at 2:00 pm by David Farrar

The controversial new safety video from Air New Zealand. I predict around 60% of passengers will pay close attention to the safety video!


Air NZ and Singapore Air

January 17th, 2014 at 10:00 am by David Farrar

The Herald reports:

Kiwis can expect cheaper flights and more choices as a result of a deal between Air New Zealand and Singapore Airlines, which is also expected to boost local tourism.

The deal announced yesterday, which is subject to regulatory approval, will enable Air NZ to resume flights to Singapore for the first time in eight years.

It will also have access to the Singaporean carrier’s huge regional market and much of its worldwide network.

It will take more than half of the flights operated by Singapore Airlines to New Zealand and revenue would be shared between the airlines from all flights on the route.

Singapore Airlines will operate its larger Airbus A380 on flights to New Zealand for the first time.

A good agreement for both airlines. It is noticeable that Air New Zealand is doing so well, while Qantas is struggling so badly that it is looking at selling its airpoints scheme.


Labour’s privatisation history with Air New Zealand

November 20th, 2013 at 4:00 pm by David Farrar

Labour are insisting the exact right share of Air New Zealand for the Government to own is 73%. Or alternatively they are saying it is only acceptable for the Government to increase their shareholding in Air New Zealand, not dilute it.

Well consider their history with Air New Zealand.

  1. Labour privatized it in 1989 – selling it to Singapore owned Brierleys and Singapore Airlines.
  2. Labour bought 80% of it in 2001.
  3. Labour agreed to sell 22.5% to Qantas in 2002 – 2004
  4. Labour never reinvested the dividends so that’s why the share is down to 73% in 2013. It has been a creeping privatization since 2001. 

National has sold 20% to New Zealanders. The Clark Government tried to sell 22.5% to Qantas, who are not only foreigners (not that I care about that) but would have destroyed trans-Tasman competition!

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Air NZ airpoint changes

November 20th, 2013 at 11:00 am by David Farrar

Stuff reports:

Air New Zealand has revamped its Airpoints loyalty scheme making it more attractive for shorter flights, while also adding an exclusive by-invitation-only membership tier for its highest spending passengers.

Air New Zealand’s head of customer loyalty Mark Street said many fares will earn higher points, particularly on short routes. But fewer points will be earned on some cheaper fares.

“But overall we expect Airpoints members to earn several million more Airpoints Dollars each year,” Street said.

I’m suspicious. Almost without exception in the past, any changes to their airpoints scheme has resulted in frequent flyers getting done over and losing value.

It will be nice if this is not the case this time, but I remain suspicious until we see exact details.

There’s also good news for members of the renamed Elite membership tier (previously Gold Elite) who will receive an additional complimentary upgrade each membership year for use specifically on short haul routes across the Tasman and to the Pacific Islands.

This is in addition to the existing two free ”recognition upgrades” redeemable across the whole Air New Zealand international network.

Now that is useful, and welcome. Probably makes commercial sense for Air NZ also as they probably get very few people using upgrades on the shorter routes, so giving some complimentary ones away to elite flyers probably is almost no revenue cost – but some extra good will.

The airline’s top spending passengers will be invited to receive an exclusive Elite Priority One annual membership which will come with additional benefits to be revealed in the New Year.

The programme update follows a nine month review and a marketing push by rival Qantas in New Zealand, using a replica Mars Rover to entice travellers to join its Frequent Flyer programme.

This might explain the changes, and why perhaps this time they are actually beneficial to frequent flyers. Competition is good.


Herald on Air NZ sale

November 19th, 2013 at 2:00 pm by David Farrar

The NZ Herald editorial:

According to the Labour Party leader, David Cunliffe, the timing of the Government’s selldown of shares in Air New Zealand is arrogant. Describing it as astute would have been far closer to the mark. Shares in the airline have been trading at a five-year high and investment advisers have voiced their enthusiasm for them. What better time could there be for the Government to reduce its holding in the national carrier from 73 per cent to 53 per cent?

That is a good question. Unless you believe that 73% is the exact right amount of shares for the Government to hold. Which is like believing in astrology.

One can make a principled case for 100% or for 51% (or for 0%) but to insist it must be 73% is daft.

The selldown has been criticised because it is being done just before a referendum on the part-sale of state assets. That complaint is misplaced. The focus of the Government’s mixed-ownership model strategy and, therefore, the referendum has always been the part-sale of the state’s three power companies, not an airline that the government acquired essentially by accident. Air New Zealand is very much an ancillary part of that strategy.

The referendum question also includes Solid Energy. It is a very badly worded question. Because if you think the Government should sell off the power companies and Air NZ, but should not sell off Solid Energy (because we won’t get 10 cents for it) then you should vote no I guess. Likewise if you think the Govt should sell more than 49% of any of the five companies, then again you arguably should vote no.

Green co-leader Russel Norman has gone so far as to suggest the selldown could lead to reduced regional services or higher fares.

I wish there was a competition for the most financially illiterate comment of the year, so I could nominate it.

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Dann on Air NZ sell down

November 19th, 2013 at 7:00 am by David Farrar

NZ Herald Business Editor Liam Dann writes:

The sale of the Government’s Air New Zealand shares shouldn’t be lumped in with the political scrap over the sale of state owned enterprises (SOEs) as it has been by opposition parties.

Air New Zealand is already a private company. It is publicly listed which means anyone can buy shares and the company must abide by NZX market regulations around disclosure.

Air New Zealand, in its current form, was never a state owned enterprise. The Government investment was a bailout which came about of necessity when the company went to the brink of collapse in 2001.

However much you feel the blame for that failure can be attributed to its private ownership structure at the time, that structure is not being copied here.

This is not, as the opposition says, history repeating.

Today we own a 73 per cent stake by the end of tomorrow we’ll own 53 per cent. So what? The numerical change doesn’t alter the control that Government has as majority shareholder.

Why is 73% the magically correct number? If Labour is against selling down to 51% then why don’t they announce a policy to buy 100% of Air NZ?

The taxpayer has done well from the investment – but when you look around the world at the performance of airlines you’d have to say this is a rare bonus.

Airlines are highly competitive risky businesses. There is no compelling reason for that risk to be all or mainly state owned.

Claims that the airline may now charge higher prices and neglect regional routes are ludicrous. 

Bat shit crazy.


Stupid claims

November 18th, 2013 at 9:00 am by David Farrar

The Herald reports:

Opposition parties are warning of damage to the national interest, higher fares and even a second taxpayer bailout after the Government put another slice of Air New Zealand on the block.

Higher fares because the Government will own 53% instead of 73%? No one with a shred of financial knowledge could make such a claim. It’s financial illiteracy at its worse.

Green co-leader Russel Norman said it could lead to reduced regional services or higher fares.

Won’t he be a great Minister of Finance!

Air New Zealand already is a mixed ownership model. Labour and Greens are the worst sort of conservative – they claim the status quo is preferable despite any rational basis for it.

According to Labour and the Greens 73% is the exact right proportion of Air New Zealand to own. Not 82% (or they would have policies to increase it) or 64% or 51%. It must be 73%.

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Air NZ and Team NZ

August 8th, 2013 at 11:00 am by David Farrar

The Herald reports:

Air New Zealand is a supplier to New Zealand’s America’s Cup arch-rivals Oracle.

The airline is listed on the United States yachting syndicate’s website as a supplier with 28 other companies, some of them international firms but most from America.

Why wouldn’t they be? I expect Air NZ to supply services to anyone willing to pay.

Emirates Team New Zealand are on course to race Oracle for the Auld Mug and support for a rival outfit by the airline – which is mainly taxpayer-owned – is puzzling an avid fan of New Zealand’s challenge.

“It’s strange to think that the national carrier of New Zealand is helping the competition, let alone the New Zealand Government holding a majority stake in the company,” said supporter Kurt Bennett.

So we have a story based on one fan’s puzzlement?

Air NZ is not helping the competition. They are not training the crew up. they are providing seats on planes.

The Government also owns about 73 per cent of Air NZ, which because of exclusivity arrangements would be prevented from joining Emirates in backing the New Zealand challenge.

Exactly. So how is this a story?

Mr Bennett said he understood that but did not think it was appropriate for a company such as Air NZ to support another country, let alone the direct competition to Team NZ.

They are not supporting another country. They are providing a service.

Air NZ said it was not a sponsor of Oracle, just a supplier, but did not provide details of the nature of the deal. “It’s worth noting that Emirates Team NZ and Oracle are both users of Air NZ services. Oracle and Emirates have people based in New Zealand and Air NZ is the only carrier to offer direct services between New Zealand and San Francisco,” a spokeswoman said.

Maybe Mr Bennett thinks Air NZ should ban all foreigners from their flights, in case any of them are sportsmen or sportswomen who compete against NZ atheletes?

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Rodney writing at his best

June 2nd, 2013 at 1:00 pm by David Farrar

Rodney gets better week after week as a writer. Today in the HoS:

Air New Zealand’s rejection of would-be cabin crew member Claire Nathan because of the ta moko on her forearm highlights how New Zealand is developing and unfolding in new and exciting ways.

No longer must we think through the consequences of our actions. This is very liberating. For Nathan, her dream was to work serving the diverse customers who fly Air NZ. In the past she would have had to think through personal decisions that might affect her chances of a job. Like having a tattoo on her arm.

Not any more. She can have her tattoo and Air NZ is wrong to object.

The second great development is that you don’t have to suffer the consequences of your decisions in embarrassed silence. You can trumpet poor treatment in the media and instantly become the victim.

The third is that we are quick to spot any hint of racism. Nathan is Maori. Maori traditionally had tattoos. Therefore, Air NZ is discriminatory and racist. We have yet another opportunity to prove again that we are ever-vigilant in battling the scourge of racism.

As I said choices have consequences.

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NZ Herald on tattoos

May 30th, 2013 at 12:00 pm by David Farrar

The NZ Herald editorial:

Air New Zealand has been widely criticised for turning away an aspiring stewardess with a moko in the skin of her forearm. In response the airline says it is reviewing its policy. It will be weighing up whether the woman’s complaint has done more harm to its public image than tattooed cabin attendants might do to its business. In other words, it must assess whether the tolerance people profess in public truly represents their feelings. …

Nobody outside Air New Zealand is in a position to question its commercial judgment. Critics do not depend for their salaries on the airline’s success in a competitive international market. Air New Zealand managers have the best incentive to assess the true reaction of most people to tattoos and the company’s decision on whether to maintain its ban on visible tattoos will be a reliable indicator of how society really regards this fashion among younger people today.

Many of their critics have accused the company of hypocrisy since the rejected tattoo was a Maori motif and Air New Zealand brands itself with a koru. They missed the point. The aversion of many people to tattoos goes deeper than the subject drawn, it is the act of deliberate and permanent disfigurement as they see it, that they find appalling.

I think this is the key issue. It is nothing to do with the design. People have every right to get a tattoo, but it may affect the sort of jobs you can get. It’s the same with hair styles. If you like to have a mohawk, don’t be too surprised if you don’t get employed as a receptionist or air hostess. Likewise, if you like facial piercings, then again don’t be surprised if some jobs do not come your way.

Now the difference is you can change your hair style, and remove piercings. But tattoos are not easily removable. True. But that is not the fault of the employer. That is a decision the person with the tattoo made.

Around 20 years ago I probably found tattoos off-putting, but now actually like really cool body art. One friend has probably quarter of her body covered with amazingly lovely art. Definitely not something I’d ever ever do though.

Maori and Pasifika patterns are more attractive than most of the insignia commonly carved into skin and Maori motifs are now often imitated in other parts of the world, not always to the pleasure of their cultural proprietors. It may be that faux ta moko already help promote New Zealand in other places. If so it could be greatly to the advantage of Air New Zealand to have genuine examples of the art on some of its front-line staff.

But the company has not seen it that way, or not until this week. Its reassessment, when it comes, ought to be doubly respected because Air New Zealand not only has the incentive to make the right decision, it is not a conservative company. It is more adventurous than most in its presentation of itself, notably with pre-flight safety films that are not afraid to challenge passengers’ expectations and sense of humour, not to mention their patience

It is an issue for them. I reject that it is a race issue. It is not about the design. As for Miss Nathan, I see Jetstar has offered her a job, so she can still fufill her dreams of being an air hostess.

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Tattoos not suitable for some jobs

May 28th, 2013 at 12:00 pm by David Farrar

The Herald reports:

Claire Nathan says she had her dreams of being an air hostess dashed after Air New Zealand turned her away because of her ta moko.

Ms Nathan applied for her dream job in January, but last month, the national flag carrier terminated an interview when she declared the traditional Maori motif on her lower arm.

Last night, she told Maori TV show Native Affairs how the interview initially went well, until it came to filling out a form that asked if she had any visible tattoos.

“I thought, ‘This is interesting. I wonder why they are asking me that. Maybe it’s because they want to know if I have a ta moko.’

“I thought that they would be quite proud to have someone with a ta moko working and representing New Zealand. [But it’s] not the case. [It] was the total opposite.”

Ms Nathan said she was told tattoos that could not be covered by the uniform were unacceptable.

People make a choice whether to get tattoos. I think many tattoos look cool, but if you want a job in certain roles you need to think about whether having a visible tattoo will be hinder you in that.

If someone was covered with skull and crossbones tattoos, then you would not expect to see them in certain frontline roles.

Now of course a ta moko is very different to the above example. But here’s where I have sympathy for Air NZ.

Do they become the tattoo police and decide on an individual basis which tattoos are allowable, and which are not? I’d guess that would land them in even more trouble.

She said it was a double standard from an airline whose logo is a koru.

Heavily tattooed singer Gin Wigmore has appeared in Air NZ ads, as have numerous inked All Blacks.

There’s a world of difference between someone appearing in a television advertisement, and someone being in a customer service role.

I’m sure Air NZ do not mind how many tattoos staff in non front line roles have.

Ms Nathan said she never thought her ta moko – depicting her heritage and her two children – would limit her career choices.

Well of course it would. She made a choice.

Air New Zealand said last night that tattoos were seen as “frightening or intimidating” in many cultures.

“Naturally we want all of our customers to feel comfortable and happy … and this has been a key driver of our grooming standard which, like many other international airlines, prevents customer-facing staff from having visible tattoos.”

As I said, I think many tattoos look great if done well (would never have one myself though). But Air NZ is a company that lives or dies on customer service, and their rule isn’t an anti moko rule – it is an anti visible tattoo rule.

You can argue that they should show some flexibility, but then they have to start inspecting individual tattoos and telling prospective staff whether they approve of their individual designs. Imagine the nightmare that would cause!

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Herald says good time to sell Air NZ shares

April 29th, 2013 at 3:00 pm by David Farrar

The Herald editorial:

Air New Zealand’s soaring fortunes were confirmed last week when it flagged that its annual earnings would more than double this year. Normalised pre-tax earnings would be between $235 million and $260 million if current market conditions and the trading environment persisted, it said. Air New Zealand’s share price immediately shot up 8c to $1.52, signifying a 10 per cent rise this year. …

As it is, Air New Zealand may well hold more appeal, especially for the mum-and-dad investors the Government aims to attract. The airline industry has always had an allure despite the vast sums of money that have been lost in it, and the national flag carrier has a special place in the hearts of New Zealanders.

It has faced a multitude of problems in the past few years, including high fuel prices, landing fee increases, earthquakes in Christchurch and Japan, and discount competition. Yet it has managed to not only survive but to achieve a profitability more commonly associated with budget operators while maintaining a high standard of customer service.

A strong management team, headed by new chief executive Christopher Luxton, provides reason for confidence in the future, including a strong response to the challenge that will arise from the transtasman alliance between Qantas and Emirates, which awaits only the Transport Minister’s go-ahead. Jetstar is also talking of expanding its domestic network to regional centres, flying routes that it says are a “big profit play” by Air New Zealand. Balancing these threats to some extent is the benefit that the national carrier will undoubtedly gain from the Government’s $158 million boost for promoting tourism.

There are also practical reasons to encourage the Government to promote Air New Zealand. It is already listed on the stock exchange, so a prospectus will not be required. The selldown of the Government’s 73.4 per cent stake to 51 per cent will be more straightforward than those of the power companies. There will be no repeat of the late rewriting of Mighty River’s documentation.

If ever there is a time to sell shares in Air New Zealand, this appears to be it. Investors wary of the unpredictability of the airline industry may not touch it, but there is considerable appeal for mum-and-dad investors. It could offer succour as the Government licks its wounds.

I agree. The Government doesn’t even have to do it in one go. They can just release parcels of shares when the price is high.

I look forward to hearing intelligent arguments from opponents as to why the Government should own exactly 73.4% of Air New Zealand – not a share less or a share more. Tell us why it should not be 51% or why it shouldn’t be 95%?

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Air NZ looking at South China visa scheme

December 6th, 2012 at 10:00 am by David Farrar

Grant Bradley at NZ Herald reports:

The Government says its fast-track visa scheme will be considered for other airlines besides China Southern, which already uses it, and Air New Zealand, which is in discussions to use it.

It isn’t actually a fast track. There is no priority given for processing. There are no different requirements. The only change is the sort of document you have to attach to prove you are not a penniless who has less than $4,000 cash is a frequent flyer status showing you have flown 40,000 kms in the last year rather than a bank statement.

A spokesman for Immigration Minister Nathan Guy yesterday said the discussions between Air New Zealand and Immigration New Zealand were in their early stages.

“Similar arrangements with other airlines will be considered to increase tourism and trade with China.”

Excellent. South China took the initiative and proposed the arrangement, as they saw it as a good way to get more wealthy tourists flying here on their airline. Of course you’d allow any other airline that sees benefit to do the same.

China Southern Airlines gold and silver frequent flyer card holders no longer have to produce evidence of sufficient funds to support themselves, as long as they can show their flight records over the previous two years.

They would still need to get a visa, and still need to meet health and good character checks.

A minor and trivial change.

It is worth recalling that this is about getting more tourists to NZ, not immigrants. Tourists are great for our economy. They incur almost no expenses in terms of health, education or welfare and spend considerable amounts of money boosting the tourism sector economy, and tax from both corporate profits and GST. The more (especially) high spending tourists we get, the better for the economy and jobs.

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