Cargo rethink by Air N.Z.

Press, 27 February 1980, Page 12

Cargo rethink by Air N.Z.

By

MARTIN FREETH

New Zealand businessmen can look forward to a better ■ air freight deal from their national airline — in terms of cargo handling. if nut cost. Air New Zealand is rethinking its approach to freight carriage against a backdrop of soaring costs and changing demands. Revised plans for conversion .of a DCS to a cargo-only aircraft, extra storage, capacity at Auckland. and new systems for tracing and handling consignments were described when Air New Zealand s cargo director (Mr M. J, Neville) met Canterbury manufacturers.

The meeting had been sought to discuss South Island transport problems, particularly delays in trans-shipping through Auckland and limitations on Tasman cargo space.

High on the agenda was the DCS conversion, pushed back after the DC 10 disaster last November. Air New Zealand now expects to have the DCB back from the McDonnell Douglas plant early in May next year. Mr Neville said that the cargo-only jet should not be regarded as a solution to all problems.

The DCS, with its average payload of 23 tonnes, would simply be an “addon” to the airline’s total overseas freight capacity, he said. The bulk of the converted aircraft’s flying

would be scheduled, but up to 1500 hours a year would be on non-sched-uled. charter runs. This would enable Air New Zealand to handle some of the occasional cargoes, mainly ... livestock, now carried out of New Zealand by foreign “ad hoc” operators. ...

Mr Neville emphasised the uncertainty of planning future • activities, soaring fuel costs and difficulties in matching cargoes with aircraft move--ment could disrupt the economics of an international service ver_v quickly. Such factors could overtake the DCB conversion before it was completed, he said.

Mr Neville, who became, the airline’s first cargo; director last October, wanted to see international cargo handling on a ‘'zero cost basis.” “We want to know exactly what it costs us to move a kilogram of cargo,” he said. In the past, air freighting had suffered from a “by-product image.”

Air New Zealand would seek greater flexibility in the future. Mr Neville said that it might be best for up to 30 per cent of the total international cargo volume to be carried outside scheduled passenger services.

Chartered jets could be used more by Air New Zealand as “a provingground to meet particular needs,”

He said that better communication should be established with businesses in New Zealand. These could help informally to match cargoes with available aircraft. In tne meantime airfreight charges would continue to .spiral, in line with fuel costs. Since last August, for example, domestic charges had risen 44 per cent. ;

However. Mr Neville compared this with a 50 per cent increase in the United States over the same period. The cost of freighting by air was such,, he .said, that some producers had to -rely Un Government export ” incentive payouts to make exporting profitable. -

In addition ..to- fuel costs, the .future, viability of Air New Zealand freight , services depended on the ability to “backload,” to ensure cargoes were available for an aircraft's return flight to New Zealand.

Mr Neville pointed to the' airline's present Tasman trade. While freight holds were full on thesouthward flight, they were always only twothirds full on the way back from Australia. It was a continuing process to boost cargo flow back to New Zealand and this year Air New Zealand would “beef up” its sales force across the Tasman, he said.

Asked abvout the possibility of bringing more

international flights through Christchurch. Mr Neville said that while it was technically feasible, the demand would not justifv it.

"If the demand was there. Air Pacific. Continental. and others would •have been in here like nobody's business,!’ he said. Mr Neville also ruled out the economics of scheduling more Air NevZealand flights between Christchurch and Brisbane, to cater • for perishable exports.

However, South Island businesses would benefit from huge extensions- to Auckland Airport's overstretched cargo storage shed. These . would be opened in late August or September.

“Congestion at Auckland is almost impossible,” he said. However, Air New Zealand was- sometimes blamed, when in fact it was only acting as agent fctr another airline.

A cargo tracking system called "Access.” used now overseas, would be introduced in two years by Air New Zealand.

“It will improve transshipment time simply because cargo will pop up in a computer programme if it is not moving,’’ said Mr Neville. . Air New Zealand ctfuld lift, the over-all freight rate . for South Islanders having to export via Auckland, he said. This would be preferable to paying one domestic rale and one international.

The domestic freight programme, which included Bristol and Argosy freighters, was "ticking over reasonably well." said Mr Neville. However, there was imbalance in the flow of cargo from south to north. Discounts of up to 70 per cent were given selectively on high density cargoes in a bid to attract more freight on northbound routes, he said.

A semi-mechanical cargo sorting system to be introduced on domestic services at Christchurch Airport would improve freight flow and handling costs, said Mr Neville.

The system, to be installed in June, would be evaluated for extension to Auckland and Wellington.