Airline Envisages Improved Image

Press, Volume CIV, Issue 30822, 6 August 1965, Page 12

Airline Envisages Improved Image

(New Zealand Press Association)

WELLINGTON, August 5.

The improved public image of S.P.A.N.Z. through the introduction of modern airliners would justify the growth figures produced for projected passengercarrying potential of a planned new service, the airline’s counsel said at a hearing in Wellington today.

Mr R. Wisely made this statement for S.P.A.N.Z. during an Air Licensing Authority hearing on S.P.A.N.Z.’s application for licences for three new air routes.

S.P.A.N.Z. has applied for exclusive rights to services using Rotorua and Taupo airports and between Nelson and Christchurch, with the intention of serving these centres with Hawker Siddeley 748 airliners. The application is opposed by N.A.C. and the Rotorua, Taupo and Nelson City Councils. Mr Wisely was replying to questions from Mr E. D. Blundell, for N.A.C., about the feasibility of S.P.A.N.Z.’s twostage plan. Mr Wisely said the improved public image of the

I company through the int rodue of the modem airliners would justify the growth figures he had produced for projected passenger carrying potential of the new service. He told Mr Blundell that the £750,000 needed for the new service could be raised through interested organisations in New Zealand. They had told S.P.A.N.Z.: “You get the licence and we 'will talk business.” I Further questioned by Mr Blundell, Mr Wisely said that the company was considering raising some of the money for the 784’s from public shareholders. The whole budget of the two-year plan depended on the licence being granted, he said. He had no doubt that the losses over past years would then be halted. GOVERNMENT POLICY The Government welcomed the establishment, and continued operation, of private enterprise air services in New’ Zealand, said a divisional controller of the Civil Aviation Department, Mr D. F. Toms. He said the Minister of Aviation , had authorised him to make this statement to the authority.

The proviso was that the service met a demonstrable public demand, that it could be run economically, and it did not cause‘dismemberment of an existing service catering to public demand. The Government expected, however, that private enterprise air services here should be run by New Zealanders. Mr Toms said he wanted to make it clear that the Civil Aviation Department was neither supporting nor opposing the S.P.A.N.Z. application. The department, he said, had been approached by S.P.A.N.Z. for its help in the application, and had given it because of these reasons. The Government was a substantial creditor of the airline and therefore had an interest

in its future, the department had an obligation to present relevant data before the Authority, and the department had a responsibility to promote and encourage orderly development of civil aviation in the country. He said the department had very limited powers under its act, but it did hope to influence the Government, and the Authority, on decisions. “EARLY DEMISE” The first scheme for expansion outlined to the department by S.P.A.N.Z., he said, would in the department’s opinion, with knowledge of S.P.A.N.Z.’s pattern of activities and its liabilities, have led the company to an early demise. The proposal involved the expenditure of £750,000 on two turbo-prop planes, and the department considered it could have led to more financial loss by people, mainly because it involved the continued operation of three DC3 services, which appeared to be uneconomical. A second scheme was discussed, and the department’s view was that this also would be uneconomical unless N.A.C. was excluded from the services at certain points. MODEST PROFITS If these certain restraints on N.A.C. were acceptable to the Authority, then modest profits seemed assured for S.P.A.N.Z. The department did not consider that the application laid the seeds for rapid expansion into a second major airline, with calls on overseas funds, otherwise the department would oppose the application, on the ground that the country was not yet ready for two major lines. The department was only concerned that any further expansion of S.P.A.N.Z. should be guaranteed to be economic in view of its present liabilities.

The Mayors of Taupo, Mr M. J. E. Story and Nelson, Mr D. N. Strawbridge, gave evidence opposing S.P.A.N.Z. being given monopoly rights on services to those towns, but Mr Story said a one-year trial, in respect of Taupo, could be acceptable. The hearing will continue tomorrow.