AIR - Air NZ.

[Beagle]

Its all good. We can all sleep safely tonight content in the knowledge that our Raz would have sorted out Jones and reminded him that since the bailout due over 15 years ago AIR trading as a stand alone commercial enterprise free of socialist responsibility has literally contributed many billions of dollars in tax and dividends and billions more in PAYE from its 11,000 staff and those same billions have been very useful in helping establish Jones regional development lollie scramble fund as well as funding schools, hospitals, police and other social services throughout N.Z. including guess where.. yes that's right you guessed correctly,.the REGIONS !!!! Ain't free market capitalism grand. Everyone benefits.

[peat]

Its all good. We can all sleep safely tonight content in the knowledge that our Raz would have sorted out Jones and reminded him that since the bailout due over 15 years ago AIR trading as a stand alone commercial enterprise free of socialist responsibility has literally contributed many billions of dollars in tax and dividends and billions more in PAYE from its 11,000 staff and those same billions have been very useful in helping establish Jones regional development lollie scramble fund as well as funding schools, hospitals, police and other social services throughout N.Z. including guess where.. yes that's right you guessed correctly,.the REGIONS !!!! Ain't free market capitalism grand. Everyone benefits.

Lets not forget there would be no Air NZ today with true free market capitalism.

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Most likely it would have failed or possibly been rescued (and then consumed?) by Singapore Airlines. However public money was used by the NZ Labour govt (Clarke and CUllen ) to purchase and recapitalise and from those ashes it has risen to its current glory as a well-run entity. .

But my point is that SOE's have certain advantages over fully private ones such as access to large and cheaper funding either from the major shareholder or even as cheaper costs of finance in general arising from the implicit govt guarantee. This provides them with greater resilience and hence increases their chances of survival.

Also, the National Flag Carrier status has often protected them from takeover by foreign corporations, so again not free market.
Countries usually choose (unless they're the US ) to have a flag carrier to ensure domestic transportation isn't foreign owned so as to ensure sovereignty. The wiki definition of flag carrier mostly focuses on the benefits the airlines receive from their government

So just as the country needs Air NZ the company gains many protections and assurances from its country, it is a symbiotic relationship.

I totally agree that Air NZ must make commercial decisions but they are supported in more ways than one by the government and the people of NZ . And they should recognise that within their decision making, whatever that means.

More on topic
I was seriously considering buying in, in need of some good yield , but my mind went back to those P+L's I used to print out when I ran the GL. Oh so touchy they were. No, even if Buffets changed his mind about airlines I havent.

[iceman]

Twyford on The Nation this morning basically confirmed Jones' view is the Government's view and confirmed he, as Transport Minister, will be asking Luxon to clarify reasoning for regional decisions at their next meeting happening soon.
Whatever we think is right or wrong, it is clear that this Government wants more "social responsibility" from AIR and a change in direction. Up to us a SH what we do with that knowledge. I would not be surprised if we will see some high powered resignations from AIR.

[minimoke]

Twyford on The Nation this morning basically confirmed Jones' view is the Government's view and confirmed he, as Transport Minister, will be asking Luxon to clarify reasoning for regional decisions at their next meeting happening soon.
Whatever we think is right or wrong, it is clear that this Government wants more "social responsibility" from AIR and a change in direction. Up to us a SH what we do with that knowledge. I would not be surprised if we will see some high powered resignations from AIR.

Intersting call by Twyford. I reckon he will remind the Board the Govt is Major Shareholder and as Major Shareholder govt wants to see flight to regions.

Two options:
AirNZ continues with current dividend and then Govt pays subsidies to regions to maintain local air services. In which case taxpayer loses.
AirNZ subsidised regional flight and cuts dividends in which case shareholders loose.

Hence why govt should not interfere in commercial operations and should sell their stakeholding.

(Disc not an AIR holder and woudlnt want to be at the moment.)

[Raz]

Twyford on The Nation this morning basically confirmed Jones' view is the Government's view and confirmed he, as Transport Minister, will be asking Luxon to clarify reasoning for regional decisions at their next meeting happening soon.
Whatever we think is right or wrong, it is clear that this Government wants more "social responsibility" from AIR and a change in direction. Up to us a SH what we do with that knowledge. I would not be surprised if we will see some high powered resignations from AIR.

I did hear that as well, the other point that is not such common knowledge, my understanding is that AIR has dropped routes at times for expected higher growth routes or routes with a higher ROR rather than just dropping non profitable routes. How this government will see this given their commercial reality intransigence may be telling.

[iceman]

I did hear that as well, the other point that is not such common knowledge, my understanding is that AIR has dropped routes at times for expected higher growth routes or routes with a higher ROR rather than just dropping non profitable routes. How this government will see this given their commercial reality intransigence may be telling.

Interesting. They are also managing routes with short supply of pilots and other aircrew, which are in short supply worldwide, a problem shared by most airlines.

[winner69]

Quick economic benefit study done for AIR probably shows a 15 to 20 times return on the millions spent on sponsoring the Obama visit

That’s just the direct returns for AIR .....unquantifiable benefit to NZ Inc on top of that.

[minimoke]

Quick economic benefit study done for AIR probably shows a 15 to 20 times return on the millions spent on sponsoring the Obama visit

That’s just the direct returns for AIR .....unquantifiable benefit to NZ Inc on top of that.

Given Obama had to catch a helicopter to Matauri Bay reinforces the argument theri needs to be better regional servicing.

[Beagle]

If the rumors are true we have a problem with lack of supply of pilots. Rumor's are that AIR have dropped the intake experience requirement from 1500 hours commercial to 600 hours which is a pretty significant move. Government may need to look at funding more flight training...they could do it at regional flight schools.

Glad they have John Key on the board now. No doubt if there are talks down the track with the Govt he'll be telling these Johnny come lately armatures a thing or three.
Hope he gets promoted to Chairman soon, not that I think Tony Carter is doing a bad job, actually I thought the letter he sent the other day to Grant Robertson was spot on the mark.

I will reiterate my point. AIR have through their taxes, dividends and the PAYE of their 11,000 staff through the highly successful opoeration of their business paid the Govt BILLIONS of dollars in revenue over the last 15 years since the bailout. In addition the Gov't stake is worth just on $2b at present.
Those billions of dollars have helped fund regional hospitals, police, schools, plunket and so on.

Saddling the golden goose with a socialist agenda when private enterprise can easily take over marginal regional routes doesn't make sense for anyone.
What's next if we go down that slippery slope, free power for some people because of ancient historical grievances ?

Worth noting that the Government owns 100% of Kiwirail but is not interested in expanding into unprofitable regional routes.

What's next on this slippery slope of socialism. Do people is west and north Auckland deserve their own airport because it takes them longer to get to Auckland airport than Kapiti coast residents ? Shall we nationalize Whenunapai airport then and force AIR to run flights out of there ?

[BlackPeter]

If the rumors are true we have a problem with lack of supply of pilots. Rumor's are that AIR have dropped the intake experience requirement from 1500 hours commercial to 600 hours which is a pretty significant move. Government may need to look at funding more flight training...they could do it at [B][U]regional flight schools.

More funding for flight training? Any funding at all for pilot training would be good.

I remember - one of our boys showed (some 15 years ago) an interest in becoming a pilot. At that stage this would have meant for him to take on more than $100k debt to pay for the training, with no guarantee at all for getting afterwards a job. There had been little vacancies for pilots around, and the ones available paid a pitiful salary - something like 25 or 30 k a year for a junior).

Frankly - I am not surprised we have these days a pilot shortage - and glad to report that our son used his grey matter and is now a successful (and well paid) SW Engineer ...