Air N.Z. challenged on profits

Press, 26 November 1979, Page 1

Air N.Z. challenged on profits

PA Auckland The president of the New Zealand Chambers of Commerce (Mr D. Fine) has challenged Air New Zealand to open up its books and prove its efficiency. The news that the airline might run at a loss this year, mainly because of soaring fuel costs and the DCIO grounding, would not come as any surprise, he said yesterday. But the public was entitled to be told • exactly how any losses had occurred. The airline’s chief executive (Mr M. R. Davis), said at the week-end that there were difficulties which were part of a world-wide trend in aviation. He declined to comment on whether the airline would break even.

Mr Fine said the public would not forget that Air New Zealand’s merger with the National Airways Corporation had promised savings estimated at $lO million.

But there had already been two air-fare increases on domestic services this year. It would be “unthinkable” for Air New Zealand to raise domestic fares to subsidise its overseas services and the public should be shown where any losses were occurring.

“Air New Zealand must show quite distinctly what costs are incurred by internal as against external operations.” An Air New Zealand spokesman said last evening that there was no question of the last domestic fare increases being related to overseas services. The first increase this year had stemmed from the imposition in the Budget of a sc-a-litre tax on jet fuel used locally. At the hearing of the second application for an increase, Air New Zealand had had to justify the rise on the basis of internalservices cost increases alone.