S.P.A.N.Z. REFUSED SOLE RIGHTS

Press, Volume CIV, Issue 30882, 15 October 1965, Page 1

S.P.A.N.Z. REFUSED SOLE RIGHTS

(N’etr Zealand Press Association) WELLINGTON, October 14. The Air Services Licensing Authority today refused the application of South Pacific Airlines of New Zealand for exclusive rights to Rotorua airport.

The application was based on a plan to use two new HawkerSiddeley 748 turbo-prop aircraft after 1967.

S.P.A.N.Z. also lost its application for the “control of aircraft capacity to be offered between New Plymouth and Auckland so that the timetables of N.A.C. and S.P.A.N.Z. shall not, in the opinion of the authority, result in uneconomic paralleling of service.’’

The airline was granted an extension of its economy fares between Auckland, Wellington and Christchurch till November, when the licence will be reviewed.

The decision was given after four days’ submissions. Mr G. H. Lusk, of Palmerston North, presided.

In his final address tn the Authority, Mr M. F. Chilwell, for S.P.A.N.Z., said if S.P.A.N.Z. were not granted exclusive rights to Rotorua, the result would be an N.A.C. monopoly. If S.P.A.N.Z. were allowed to continue in business, the whole of New Zealand would benefit, especially smaller areas like Alexandra, Gore and Timaru. These places would otherwise be struck off the N.A.C. schedule. Support Given The creditors and shareholders were fully in support of the company, said Mr Chilwell. The public considered there was a future for S.P.A.N.Z. in civil aviation in New Zealand.

The work put in by the Department of Civil Aviation indicated that it had some faith in the airline.

If N.A.C. brought a further hearing (indicated if S.P.A.N.Z. won its application), S.P.A.N.Z. would present definite plans for finance The total revenue loss to N.A.C. by moving out of Rotorua could not be £150.000. as said by an earlier witness. Mr L. L. Ford, deputy-general manager and treasurer of N.A.C., Mr Chilwell said. Part of this £150.000 was already taken by S.PA.NZ. at Rotorua, he said. Much had been made of de-

ipriving N.A.C. of one of its main routes. A comparison !of the 1959 and 1965 balance ■sheets of N.A.C. showed that I assets in 1959 were £5.3 miljlion and in 1965 were £ll million.

S.P.A.N.Z. made no apology for changing its policy and asking for rights to Rotorua, a more economical route.

The change of policy came [about because S.P.A.N.Z. had [not been able to operate economically. Any business which allowed itself to run uneconomically should not be in business at all. Protection Asked “S.P.A.N.Z. asked for a defined and proper economic role in civil aviation in this country,” Mr Chilwell said. “We are entitled to be protected in a share of the market.

“N.A.C. has had a protected share of the main trunk over a long period. “S.P.A.N.Z. has little or no access to the main trunk. It has sought to give a service to the uneconomic, secondary routes of this country. “One of the reasons they are uneconomic is because of the operation of N.A.C.,” he said.

S.P.A.N.Z. was not seeking inroads into N.A.C.’s main trunk, Mr Chilwell said. It had never sought great inroads into the corporation s activities.

The National Airways Corporation abandoned Rotorua some years ago. The day S.P.A.N.Z. started a service to Rotorua, so did the corporation. he said. N.A.C. might not have otherwise reintroduced the service to Rotorua. The corporation had to be told in no uncertain terms that S.P.A.N.Z. had the right to provide a service to the oublic and the right to defined air routes in New Zea land.

S.P.A.N.Z. had the right to go to a hearing of the Auth-

ority as long as it had the support of the public. As long as the public had faith in the airline and as long as the public wanted a second airline, the Authority should let th public have one. N.A.C. had deprived S.P.A.N.Z. of its charter work

and flown parallel to S.P.A.N.Z.

Til] secondary air routes were rationalised there could not be an economic service on those routes. Mr Chilwell said. Upset Public

The public of Rotorua would be extremely upset if that town was dropped from the N.A.C. network, said counsel for N.A.C., Mr E. D. Blundell.

Mr Blundell said S.P.A.N.Z had not shown cause why

N.A.C. should be called on to go to the expense of presenting a case.

He said that at least part ot the subsequent hearing would have to be at Rotorua where it could better be proved that it certainly was not in Rotorua’s public interest to exclude it from N.A.C. service.

Mr Blundell said S.P.A.N.Z had had a succession of failures since it started in 1959 allhough many had tried to help it. S.P.A.N.Z. had brought one ; scheme after another to the i authority and had been given i what it wanted in attempts to save it. . Object Changed ! In the meantime, the orginal object of S.P.A.N.Z.— to provide sendees complementary to N.A.C.’s and to help promote tourist traffic—had changed to -the point where it was now trying to supplant N.A.C. from long established services. Mr Blundell said that if the people of Rotorua thought there was really some danger of Rotorua being dropped from the N.A.C. network they would be up in arms. Even if S.P.A.N.Z. again got what it wanted there was considerable doubt whether it would be able to get itself out of financial trouble rather than get deeper into trouble. He questioned whether a company with S.P.A.N.Z.’s record could raise nearly a million pounds for the new' aircraft it wanted. Mr Blundell asked the Authority to turn down S.P.A.N.Z.’s application without letting the matter go any further. Earlier, evidence was given by N.A.C. and S.P.A.N.Z. on engineering and maintenance costs of the S.P.A.N.Z. proposals. Mr H. B. Smith, a member of the Authority, said the evidence, on maintenance and engineering costs, showed that a Rolls Royce Dart-en-gined Friendship was similar in operation to the Hawker Siddeley 748. This was denied by the managing director of S.P.A.N.Z., Captain R. D. Daniell.

“The aircraft may be similar under N.A.C. operation, but it has been proved by many smaller operations that operating costs could be less,” he said.