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Contrasting Airline Fortunes Lesson for Transport Sector

6 March 2014

Contrasting Airline Fortunes Lesson for Whole Transport Sector

Authoritative weekly transport report, NZ Transport Intelligence Business Alert, says the contrasting fortunes of Air NZ and Qantas offer sharp lessons in the transport industry. The publication's editors point out how Air NZ took its medicine a decade ago, restructured and became highly cost-efficient, while Qantas sheltered behind its statutory protection, and became progressively less competitive, dragged down by an overweight cost structure.

The weekly report's editorial notes while Air NZ sees the journey ahead as “incredibly exciting,” Qantas has had to run to its mother Govt with a plea for its debts to be guaranteed. This is what happens when an industry allows itself to grow flabby. A lot of pain lies ahead of Australia’s national flag carrier.

NZ Transport Intelligence Business Alert notes Air NZ stands to gain directly from the restructuring Qantas will have to undergo. It has a 25% stake in Virgin Australia, which has done extremely well in taking on what by comparison is an 800-lb gorilla.

The publication says the primary lesson to be absorbed in this era of the transport industry, is you’ve got to be fast and nimble. It’s a lesson being learnt not just by Qantas, but to a degree by state-owned KiwiRail here, which is having to talk to the Govt about another cash injection, after the outage of the Aratere interisland ferry weighed on earnings.

NZ Transport Intelligence Business Alert is a subscriber only weekly report for the Transport and Logistics sector.

ENDS

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