Skybus hopes and warnings

Press, 8 March 1982, Page 18

Skybus hopes and warnings

Thousands of New Zealanders who were persuaded to join the Aqua Avia Society by the promise of cheap air fares are being asked to provide $200,000 in subscription fees in what appears to be a last-ditch attempt to avert the collapse of the Skybus venture. Members have been told that the society has only $7OOO in cash to see it through to the end of the month, a very much diminished amount compared with the $1 million which the chairman, Sir Reginald Barnewall, claimed was “surplus” at the beginning of October. This, together with the additional money sought, would be enough to buy about 10,000 full-fare tickets on Air New Zealand flights ' between •Christchurch and Auckland.

Skybus was offered to the public by its original promoters as a scheme whereby members would be able to fly between New Zealand’s main cities at rates substantially cheaper than those offered by Air New Zealand. The failure to get the venture off the ground was not caused, as has been suggested, by any obstructive tactics by either the Government or Air New Zealand. The Government did nothing to assist the society to compete with the airline that, under law, it is bound to back in the interests of the shareholding public. This however, was not an obstruction to the society, which proclaimed its commitment to private enterprise and competition. The promoters, could never have expected active support' from Air New Zealand’s owner — the State.

Instead, the promoters saw a chance to do something other than set up an airline under the usual rules. They believed, and persuaded many others to believe, that a full-scale commercial airline service could be arranged under the exemption that enables aero clubs to put their aircraft up for hire by passengers.

The public was also attracted by the society’s promise of cut-rate international air fares: 85 per cent of its members are reported to have been interested in those benefits. In fact, the society cannot legally offer its members international air fares at rates any cheaper than those already offered by travel agents in general, or travel clubs such as Link, Friends of the Lion, Settlers, and St Christopher’s, to mention but some of those organisations with special rates. The membership fees of these organisations are also much lower than those of Skybus.

New Zealand’s International Air Tariff Regulations lay down the boundaries within which any organisation or agent in this country can offer or promote the sale of international air travel. To be fair to its membership the society cannot raise false hopes and cannot make promises that, by law, cannot be kept. Members who probably see Little- hope of obtaining all, if

any, of the benefits promised, cannot complain that they were not warned by the Government. Over the last 15 months, the Prime Minister and Ministers of Transport, Justice, Tourism, and Immigration have all issued statements expressing concern about the scheme.

As early as November, 1980, the Prime Minister,. Mr Muldoon, urged a “buyer beware” attitude. Six weeks later the Minister of Justice, Mr McLay, warned that anyone contemplating joining the society should first take- legal advice. He said in Parliament that, because the society was advertising widely for money and membership, the Government would be failing in its duty If ’ it did nbt draw attention to “particular areas of concern.” More recently, in August last year, the Associate Minister of Civil,,Aviation, Mr Malcolm, warned that the proposed Skybus domestic service might not be exempt from the licensing requirements. In December, the society conceded this point and reluctantly agreed to follow the conventional course to obtain a licence by applying, like all other commercial airlines, to the Air Services Licensing Authority.

Warning signs that all was not well also came from within the society itself. Its experience last year was punctuated by problems that led to 10 resignations at a senior management level and the announcement of at least’ 20 starting dates for the proposed inaugural flight. During this turmoil, the original architects of the Skybus plan moved on. The society was left in the hands of a new committee, which has been desperately trying to salvage something from the foundering enterprise. Their task in convincing the public that the Skybus phoenix might yet rise from the ashes is not going to be easy. It is going to be even more difficult if they lose the confidence of their remaining members. Reports that open discussion. and questioning has been stifled at recent meetings does nothing to instil confidence. Those leading the society now have a greater obligation than ever to ensure that their members are given the answers to the fair questions they ask. Such honesty would seem to demand an admission that, even if the society survives its present financial crisis, there can be no guarantee that it will be able to deliver all that has been promised in the past. The Sky bus story has never .been a happy one. Those in command today may be able to salvage something from. the tangle. If they do so, it will be something of a miracle, and evidence that members are prepared to. put up more cash when much seems to have been lost, with nothing to show, for it, after promises have fallen flat again and again.