Please Let Air New Zealand Go Under

Import News from the Importers Institute 21 December 2001 - Please let Air New Zealand go under

The government has sunk hundreds of millions of taxpayers' dollars trying to keep failed airline Air New Zealand afloat. It should let it go under. It is not too late.

British Airways said, "Following the recent fall in the price of fuel, British Airways World Cargo is pleased to announce that it will remove its fuel surcharge worldwide with effect from 23 December 2001." Qantas said, "Effective 1 January 2002, the remaining fuel surcharge on all Qantas freight will be removed."

Air New Zealand said, "When Air New Zealand Cargo introduced a fuel surcharge in February 2000 after fuel prices had surged to record heights in the previous eight months, we indicated that we would remove the surcharge if and when prices fell."

But they have now changed their minds. While acknowledging that "fuel prices have fallen significantly in recent weeks," the airline said, "we must re-capitalise our business, reduce its costs and increase its revenue." The 'fuel surcharge' will be incorporated into the airline's standard pricing schedules from 1 February. The letter from Air New Zealand concludes, "we hope [...] that we will be able to count on your continuing support."

As a matter of fact, they can't. The Importers Institute does not support businesses that lie to their clients. We recommend to our members that they divert their freight to competing airlines. For our part, we have already joined the Qantas Club, as we are not particularly keen to see our Air New Zealand airpoints vanish, like those of their former subsidiary, Ansett.

In addition to this general price increase, Air New Zealand has also announced a new fee of $22.50 on each import and export that it handles. This is in addition to the new Anderton tax of $18 on all imports. The airline says that it needs the money to "enable sustained future investment in terminal development."

Air New Zealand managers must now think that they are secure in their jobs, regardless of how much business they lose to their competition. They must figure that the government can always be relied upon to come up with another billion, and another, and another. This may explain the high-handedness of their recent price increases.

We say that it is not too late to let this failed airline collapse. The pieces will, without a doubt, be picked up by someone who knows how to run an airline. New Zealand importers and exporters are beginning to pay heavily for the dubious benefit of the State owning a commercial airline. We urge the government to stop throwing (our) good money after bad.

ENDS

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