Blame For Loss “Absurd”

Press, Volume CII, Issue 30190, 23 July 1963, Page 16

Blame For Loss “Absurd”

(N2 Preu Association) AUCKLAND, July 22. That the National Airways Corporation should blame South Pacific Airlines of New Zealand for a major part of its £151,722 loss last financial year was termed absurd by the S.P.A.N.Z. chairman of directors, Mr J. F. Johnston, today. Mr Johnston agreed that it would appear virtually impossible for any aircraft operator to make a profit under the present heavy airways and airport dues. But he was indignant that the director of N.A.C. should name S.P.A.N.Z. as one of the major factors in bringing about the loss. N.A.C had a fleet of four Viscounts, eight Friendships, 13 DC3’s on passenger routes, six DC3*s on freight routes and several smaller aircraft S.P.A.N.Z had three DC3’s.

“If our three aircraft have caused such havoc to the accounts of the corporation, then they are truly amazing aircraft," be said.

The N.A.C. loss on secondary routes was £302,000. said Mr Johnston, which would indicate that the trunk routes turned in a profit of £116.000 “1 should point out,” Mr Johnston said, “that while S.P.A.N.Z. provides a very limited degree of competition, its basic services operate only on three days a week and its general route alignment is completely different from that followed by FAX.”

SJ*XN2. was the only scheduled carrier to provide important links between centres such as Hamilton and New Plymouth, and to provide services to Masterton, Oamaru, Alexandra and Gore. N.A.C had obtained a licence to compete with S.P.A.NZ. along the NelsonChristchurch route which S.PA.N.Z. pioneered. "The effect of our operations 0.. secondary routes is to feed into the N.A.C. trunk services a large number of passengers—far more than we would ever take from the

corporation,” said Mr Johnston.

The charge became more absurd when it was said that the annual revenue of S.P.A.NX was considerably less than the £302.000 N.A.C. loss on it ssecondary routes, “and we have been spending up to £2090 a month with N.A.C on engine overhauls and maintenance."

The blame the director* of NAC, placed on S.P.A.N Z for contributing to their losses seemed to be far out of proportion to some more fundamental causes The airports at Wanganui and Blenheim had been regraded to take Friendship* but they had been replaced with DC3’*. “The question is whether the Friendship la a true replacement for the DC3 in relation to available traffic,” said Mr Johnston “Pro Hems created by a heavy capital outlay in a reequipment programme involving eight Friendship* which might not have been justified would appear to be much more real cause* than the relatively small amount of competition offered by

S.PA..N.Z.”