Local Bodies For S.P.A.N.Z. Projects

Press, Volume CIV, Issue 30879, 12 October 1965, Page 1

Local Bodies For S.P.A.N.Z. Projects

(New Zealand Press Association) WELLINGTON, October 11. Five South Island local authorities came out in support of an application by South Pacific Airlines of New Zealand in Wellington today for the right to provide more air services. The expressions of support were made after a statement by a Civil Aviation Department officer that the five-year-old airline could not raise and service capital for proposed operations. S.P.A.N.Z. wants exclusive rights in and out of Rotorua, as the main part of its stage 1 expansion. As the main part of its stage 2 expansion, it wants exclusive rights on the New Plymouth-Nelson-Christchurch service from the time it starts running two Hawker-Siddeley 748 turbo-prop aircraft on the route in January, 1967.

It also wants rights on the Christchurch to Invercargill service, and exclusive charter rights to Taupo. The S.P.A.N.Z. proposed expansion is based on three routes:— Route 1: Auckland, Rotorua. Taupo, Masterton, Wellington, Christchurch. Route 2: Auckland, Hamilton, New Plymouth, Nelson, Christchurch. Route 3: Christchurch, Timaru, Oamaru, Alexandra, Gore, Invercargill. Mr J. M. Weaver, for the Alexandra Borough Council and the Vincent County Council, said the bodies strongly

supported the applications by S.P.A.N.Z. The survival of the company and the continuation of air services for the community depended on the outcome of the application. The Alexandra-Clyde Aerodrome Committee had invested £B5OO in developing the airport. The local authorities concerned would write off airport dues if this meant the survival of S.P.A.N.Z. and the air service. The S.P.A.N.Z. service was important to children at boarding schools, and elderly people flying north for the winter, said Mr Weaver. Southern Support Mr Weaver read a letter from the Gore airport committee asking him “vigorously to oppose any attempt to cancel or curtail the present service.” Capital expenditure at the Gore aerodrome exceeded £25.000 all subscribed by residents of the Clutha and Southland counties and the Gore and Mataura boroughs. “S.P.A.N.Z. operations have been entirely satisfactory and the company enjoys the confidence and support of the community,” said the letter. Cancellation of the service or its curtailment would seriously affect the finances of the aerodrome. Questioned by the chairman of the authority (Mr E. D. Blundell), Mr Weaver said the people he represented want S.P.A.N.Z. or a service equal to it. Mr E. M. Freeman, representing the Oamaru Borough Council and the Oamaru Airport Committee, said the local Trans-Island Airways service to Timaru was wrecked when N.A.C. was granted a licence. Lost £30,000 The company went into liquidation and Oamaru residents lost about £30,000 said Mr Freeman. S.P.A.N.Z. had carried 3048 passengers out of Oamaru in the last 15 months, said Mr Freeman. S.P.A.N.Z. also provided air-mail and freight services.

“We strongly support the application, which we believe will give the company a chance to consolidate and to retain the service to Oamaru as it appears that N.A.C. is not interested in providing the service." said Mr Freeman. A Waimea county councillor, Mr A. T. Sloane, said the Waimea council and the Nelson City Council passed resolutions supporting S.P.A.N.Z.’s application. S.P.A.N.Z. had pioneered the services from Nelson to Christchurch. “We want to see S.P.A.N.Z. keep in being,” he said. “It has served us wonderfully. It pioneered services for us and we give it our full support.” > Mr Blundell: You already have a service by N.A.C. to Christchurch and Auckland. Did anyone think of that? Mr Sloane: I don’t think we did. Department’s View Mr D. F. Toms, a Civil Aviation Department official, said S.P.A.N.Z. expansion plans would result in modest profits, “but I can’t imagine how the necessary capital can be raised and repaid with interest on this budget.” He said the expansion plans

would result in a 250 per cent increase in S.P.A.N.Z. business by January, 1967. Mr Toms has been chairman of a committee, with N.A.C. and S.P.A.N.Z. representation, which has been investigating the S.P.A.N.Z. proposals, at the request of the authority at an earlier hearing.

He reported to the authority today that S.P.A.N.Z.’s stage 1 plan would result in a small operating profit, £B9OO, next year, but this did not allow for any reserves or repayment of past debts. In stage 2 additional capital required for the two turboprops, plus spares and new hangar, would be close to £1 million. The operating profit for 1967 should be about £42,933, but there was an unknown element of engineering costs for the turbo-props and increased staff salaries which could affect this figure. He said he could not see how sufficient profits could be achieved to service the new capital debt, which could require annual payments of more than £lOO.OOO. Public Interest Mr Toms said his department, in investigating S.P.A.N.Z.’s future, had followed the policy that it would be in the public interest if S.P.A.N.Z. was kept operating, as long as this was done economically. The secretary of S.P.A.N.Z., Mr N. C. Wiseley, disagreed with the N.A.C. estimates of increased staffing and staff costs required by the S.P.A.N.Z. expansion, which were still in dispute in Mr Toms’ figures. He also disagreed with N.A.C.’s estimate of the engineering costs for the HawkerSiddeley aircraft.