S.P.A.N.Z. CASE CONTINUES

Press, Volume CIV, Issue 30880, 13 October 1965, Page 1

S.P.A.N.Z. CASE CONTINUES

(N’etr Zealand Presi Association>

WELLINGTON, October 12.

South Pacific Airlines of New Zealand had not yet made out a case that it was in the public interest to exclude the National Airways Corporation from Rotorua and also restrict it in other ways, the Air Services Licensing /Authority decided today.

The authority decided to hear further evidence on the question from S.PA.N.Z. witnesses.

S.P.A.N.Z. is asking the authority to consider amending N.A.C. schedules, and if the authority agrees, it will then have to give N.A.C. seven days’ notice and hold another hearing.

S.P.A.N.Z. wants to embark on £1 million expansion scheme —involving the purchase of two Hawker-Siddeley turbo-prop planes. The authority was told today that despite S.P.A.N.Z’s. oresent debts including £95,000 to the Government —it hoped that new licences from the authority would help its expansion and enable it to get out of debt.

The hearing today was temporarily adjourned while the authority decided whether it had heard enough from S.PA.N.Z. to justify calling the subsequent hearing to amend licences.

Mr M. F. Chilwell, for S.P.A.N.Z., submitted that figures before the authority showed that S.P.A.N.Z. could be made to survive—and profitably—so long as there was co-operation between S.P.A.N.Z. and N.A.C. on the rationalisation of services.

Figures Queried He said N.A.C. was querying the figures S.P.A.N.Z. put forward as to the cost of its proposed development and expected revenues. But there were various changes that could be made to schedules which might or might not bring higher revenues. He said the rationalisation of air services between the two airlines was a necessity, and he thought there should be legislation to remove this factor from authority hearings and place it under some sort of committee.

Mr E. D. Blundell, for N.A.C., said S.P.A.N.Z. had changed its case before the authority more than once

since the first hearing in August. When one set of prospective earnings were queried, S.P.A.N.Z. put forward different proposed schedules with different possible revenues. The drawn-out case was wasting people’s time, and some finality should be reached, he said. Mr D. F. Toms, of the Civil Aviation Department, said his department had been working for many months on S.P.A.N.Z’s. problems and other important work had been deferred. He also hoped the authority could reach a decision. Authority's View The authority chairman (Mr G. H. Lusk) then called an adjournment and afterwards said it would be wrong to give a decision on the S.P.A.N.Z. application “at this stage, considering the importance of the matter." He said S.PA.N.Z. should continue its case to show that it was in the public interest to exclude N.A.C. from Rotorua and make other licence changes to enable S.P.A.N.Z. to operate economically. Continuing his evidence, S.P.A.N.Z.’s secretary, Mr N C. Wiseley, was questioned by Mr Blundell on the company’s ability to raise the extra capital it would need for development. Capital Plan Mr Wiseley said the company was satisfied it could raise the money if it got the licences it wanted from the authority. The company intended to raise £300,000 in share capital, £600,000 in loans secured on the two new aircraft, and £50,000 in guaranteed bank overdraft. The budget called for capital repayment in 10 years, plus repayment of existing debts in that time, and loan interest and dividends to shareholders. He disagreed with Mr Blundell that this budget was too too optimistic.