Buzz from the Beehive: Clark toughens competition law – but can an illegal activity be made more illegal

The government – or, more specially, David Clark – has us wondering about the effect(s) of a  “prohibition”.

No, not Prohibition (with a capital P), the word applied to the 1920-1933 era when the manufacture, sale, and transportation of alcoholic beverages was illegal in the USA and gangsters flourished.

We refer to “prohibition” as in “ban”, meaning something has been forbidden, outlawed, disallowed or made illegal.

Once something has been  prohibited, banned, forbidden, outlawed, disallowed or otherwise made illegal – murder, for example – what more can a government do?

It could toughen the penalties, certainly.  But it can’t make murder any more illegal – can it?

Our thinking on this question was triggered by a statement from Commerce Minister David Clark which emerged from the Beehive along with news of

  • The arrival this week of the first batch of the 60,000 courses of Paxlovid coming this year to be used from next week.
  • The Government’s support for Air New Zealand (as the majority shareholder)  by committing to participate in the national carrier’s proposal to raise capital and accelerate the recovery for the airline
  • The appointment of Karl Le Quesne as the new Chief Electoral Officer of the Electoral Commission.
  • Grants totalling $154,000 for rural communities in the Waikato, Otago and the West Coast “to develop and drive solutions to local challenges”.

Continue reading “Buzz from the Beehive: Clark toughens competition law – but can an illegal activity be made more illegal”

The case for Air NZ focusing more on its freight operations

New Zealand’s vulnerability in terms of air and shipping services has been among the ominous consequences of the Covid-19 pandemic.  Air NZ has parked its fleet of eight Boeing 777-200 and seven Boeing 777-300 and reckons they will never fly them again. All its international services are based on its Boeing 787-9 with the -10 on order. These are providing limited passenger and freight services.

Pure freighter services are provided by Qantas with its cargo Boeing 767s while other carriers offer ad hoc Boeing 747-400 cargo flights.

Shipping is even more compromised with limited and increasingly expensive services to North America and Asia.

In the US the situation is more dire because of the notoriously inefficient and slow-moving container ports on the US west coast.  The east coast is much better but the shipping times via the Panama raise costs for shippers. Continue reading “The case for Air NZ focusing more on its freight operations”

Govt funding for Air NZ is among the big issues around future of our tourism industry

As  reports pile  up on the success of  vaccines against  Covid 19, is  it  time  for  New Zealand  to think of how  it  will  return  to   normal?

The  vaccines  will  not  simply eradicate  the virus, so governments will need to  start thinking about  how  to live with it.

The London “ Economist”  last week pointed  up the problem for NZ, a country which it  said had  sought to be  Covid-free by bolting its  doors  against the  world.

“ In this  way it has kept registered deaths to just 25, but such a draconian policy makes no sense as a permanent defence.   NZ is  not  North Korea. As vulnerable Kiwis  are vaccinated , their  country will come  under growing pressure to open its  borders—and  hence to  start to tolerate endemic Covid-19 infections and deaths.”

The task  for  governments is  to  work out  when  and how  to switch from emergency  measures to policies that are  economically  and socially  sustainable indefinitely.  The  Economist reckons the  transition  will  be  politically  hard   in  places  that have invested  a  lot  in being covid-free. Continue reading “Govt funding for Air NZ is among the big issues around future of our tourism industry”

As Air NZ is buffeted by turbulence, let’s think about returning it to public ownership

Air NZ is in a parlous state. Its long-haul Boeing 777 fleet is in storage in the US and few people in the company expect them to return to service. They are heavy, less fuel-efficient than the 787 Dreamliners. The company has been hammered by the Covid-19 pandemic with international tourism decimated.

There has been a wholesale change at senior management with the loss of decades of experience.  Now many of NZ’s international connections are hanging by a thread. Is it time to rethink our whole airline strategy?

One driver has become obvious: the airline is a strategic asset. Without it, NZ would be isolated.

Should Air NZ return to public ownership? Continue reading “As Air NZ is buffeted by turbulence, let’s think about returning it to public ownership”

How Covid is working through markets: British Airways edition

Because markets clear supply and demand, abrupt shocks often lead to surprising outcomes.  Covid is a big market shock.  

An early example of the ‘I didn’t think of that’ genre comes from world aviation. British Airways is taking advantage of the collapse of air traffic to restructure its workforce. Continue reading “How Covid is working through markets: British Airways edition”

A former big-shot at Walmart gives the PM and her team a lesson in leadership and personal sacrifice

The country’s national   airline, Air New Zealand, has scrapped its financial forecasts for the current year because of the uncertainty caused by the Covid-19 virus, as it cuts more services  and  freezes hiring,  Radio  NZ  reported  today.

Last month it cut its forecast of underlying earnings to be  in  the range of $300m-$350m from $350m-$450m, estimating that the virus might cost it as much as $75m.

CEO Greg Foran says the airline is now facing an unprecedented situation and it is difficult to predict future demand.

“We have been continuously monitoring bookings and in recent days have seen a further decline which coincides with media coverage of the spread of Covid-19 to most countries on our network as well as here in NZ” Continue reading “A former big-shot at Walmart gives the PM and her team a lesson in leadership and personal sacrifice”

The troubles with regional air services hark back to reforms which fuelled rising charges

The analysts and number-crunchers are hard at work at the Ministry of Transport trying to figure out what’s wrong with NZ’s regional air services.  The answer isn’t too hard to find.

It begins with the economic revolution of the 1980s and the Lange Labour Government.  The deregulation of air services launched by his transport minister Richard Prebble brought  gains on the main trunk routes (Auckland-Wellington-Christchurch and possibly Dunedin).

Ansett New Zealand, backed by the  empires of News Corporation and TNT, vastly improved those services with upper-class services and frequent flier lounges. In those heady days Ansett NZ’s “Chairman’s” lounges were packed with ministers, MPs and captains of industry. All at great cost, but Ansett was looking to integrate its Australian and NZ networks, which proved to be a bridge too far.

There was a similar and less-appreciated revolution under way in regional NZ. Till then, airports were joint ventures between the local authority and the Crown, administered by the Ministry of Transport.  All were meant to be public utilities, offering a modicum of comfort for passengers, at reasonable cost to the airlines (in effect National Airways Corporation, then Air NZ from 1978). Continue reading “The troubles with regional air services hark back to reforms which fuelled rising charges”

Mt Erebus revisited – Chippendale’s findings, Mahon’s deductions and the overlooked Privy Council judgement

There’s nothing sadder than a nation immersed in remorse.

We have been constrained from entering into the endless debate about the Air NZ DC-10 crash into Mt Erebus 40 years ago. It is a circular and irreconcilable argument. Who was to blame? At this distance, does it matter?

Facts are elusive. The only hard ones are those disclosed in the report of the then Chief Inspector of Air Accidents, the late Ron Chippindale. It was he and his expert staff who conducted the forensic dissection of the flight, working from the only hard evidence: the cockpit voice recorder, the flight recorder data and grisly, heart-wrenching examination of the wreckage on the ice. It was he who consulted widely among veteran pilots and polar experts before submitting his report.

Even Justice Peter Mahon had to conclude that “in his opinion” the crew were not responsible. Chippindale found otherwise: the crew had deliberately deviated from the programmed flight plan which called for them to fly to the ice, descend over Mt Erebus at a height of 30,000 ft then descend into clear air beyond. Continue reading “Mt Erebus revisited – Chippendale’s findings, Mahon’s deductions and the overlooked Privy Council judgement”

Air NZ flies high with airline of the year award – but Rolls-Royce engines are a drag

Air New Zealand has reclaimed the title of airline of the year in the annual Airline Excellence Awards, judged by seven editors from AirlineRatings.com.

The airline  won the title five times before losing out to Singapore Airlines last year.

The awards combine safety ratings with factors such as fleet age, passenger reviews, profitability, product offerings and staff relations.

If Air New Zealand’s patience with engine-maker Rolls-Royce comes into judging considerations, it should score high points.

Yet again the airline is cancelling flights, rescheduling passengers over a busy holiday season and struggling to find suitable temporary fleet replacements for grounded Boeing 787s. Continue reading “Air NZ flies high with airline of the year award – but Rolls-Royce engines are a drag”

Non-stop Air NZ flights to New York reflect changes in the aviation market

What do we make of the Air New Zealand decision to quit the Auckland-Los Angeles-London route?  Nothing much as it simply reflects the changing dynamics of the airline industry.

Gone are the days when Air NZ took the McDonnell Douglas DC-10-30 into the fleet and began flying Los Angeles, then the UK.  Most New Zealanders heading offshore had London as their destination.

To circumvent awkward international air services agreements, Air NZ was obliged to code-share with British Airways on the route to London, which in those days meant Gatwick Airport.

Then  Air NZ bought the Boeing 747-200 and Prime Minister Robert Muldoon over-rode strong Air NZ opposition to require the new 747s to be fitted with Rolls Royce RB211 engines. Continue reading “Non-stop Air NZ flights to New York reflect changes in the aviation market”