U.S. authorities review ‘sister’ to Aqua Avia

Press, 26 October 1982, Page 21

U.S. authorities review ‘sister’ to Aqua Avia

NZPA staff correspondent Washington Federal authorities are investigating a travel club set up on the west coast of the United States as a "sister organisation" to New Zealand's Aqua Avia Society. Like the society and' its airline. Skybus. ’ Pacific Skytrails Inc., of San Diego, has yet to get a plane off the ground, in spite of a long string of dates projected for the first flight. The president of Pacific Skytrails, recently reincorporated as Sunjet Tours and based in Reno. Nevada, is a New Zealander. Mr Murray Purchase, a former director of Skybus and also a former commercial services manager of a Vanuatu-based airline which promoted a similar unsuccessful scheme. Mr Purchase and the club are now under investigation by the consumer fraud division of the San Diego City Attorney’s office. Investigator Steven Norton. who has spent months checking complaints, says that United States postal inspectors also have the case under review, but have not yet decided on any action. Mr Norton said he had approached Mr Purchase and two other corporate officers “to discuss their concerns." Projected destinations have been given as the Cook Islands and Fiji and a copy of Skytrails’ financial records. seen by NZPA shows an entry of $5OOO from the Cook Islands promotion fund. Promotional material also talks of "visits to other island groups and to New Zealand." The first flight was scheduled for October 18 last year. The latest, reported by Mr Purchase in an interview on October 4, is planned for November 5. He also said then the club

had a contract with Trade Winds International Airlines to operate DC-8s on its behalf. Skytrails has also reported buying Boeing 707 s from various sources, but one Boeing with which it said in February this year it would operate its first flight a month later was not registered at the time with the Federal Aviation Administration. The F.A.A. said then that Skytrails was not registered as owning any aircraft and that the tail number of the aircraft given by the company had too many characters to be genuine. Costings produced by Skytrails show an estimated profit of more than SUSI million a month. Membership claims have been reported as high as 26.000 (in September last year), but the figures vary wildly, with a former employee, Ms Beth Johnson saying in March this year that “they have exactly 147 members.” Mr Purchase himself said in the October 4 interview that “I couldn’t even tell you" the number of members. A letter signed by Mr Purchase and sent out with a club membership newsletter last December states that "in just a few short weeks our membership has grown to a total of 1435" but in the newsletter itself, in a column written by Mr Purchase, membership is put at “thousands." Mrs Mel Kernahan, another former employee, said she had sold only five memberships in two months, working full time. In a letter to Mr Norton she said: “During sales meetings (held weekly), when people were asked how many they had sold, most would

not say out loud, but it seemed many persons in the group sold none at all and one or two sales a week were considered good. The most I’ve actually heard of anyone selling in one week is six.” Published club membership costs have varied from SUSIOO (single) and SUSISO (family) to SUS2OO (single) and SUS3OO (family). Skytrails’ promotional literature gives a thumb-nail sketch of Mr Purchase which includes: “set up similar airline in New Zealand, nowvery successful, known as Skybus." An undated market analysis put out last year says that "Skybus. a New Zealand domestic travel club after one year of operation, had now 42.000 members, or 1.4 per cent of the New Zealand population. Additional members joining at the rate of 1100 a week.” Another New Zealander involved in both Skybus and Skytrails is Faith Lawrence. She is named in Skytrails material as vice-president marketing. "Faith was the leading sales person for our sister organisation. Skybus, homebased in Auckland, New Zealand,” the material states. Her husband, Donald Lawrence, an American who is also described as working for Skytrails, “taught Spanish and economics at both high school and university levels in Auckland, New Zealand, for many years,” and worked for Skybus “in a sales capacity," the brochure says. Air New Zealand officials in the United States are keeping a watching brief on the fortunes of the club, but the airline has been reluctant to get involved directly for fear of being accused of trying to freeze out a potential competitor. However, an internal Air New Zealand letter says Skytrails “have misrepresented themselves by inflating their membership numbers when talking to high officials of South Pacific nations and in general overstating their potential in terms of actual tourists they can promote and carry to those countries. “. . . Although Air New Zealand's involvement on a legal basis is unwarranted at this time (December 17, 1981), if this club's intent and claims are not challenged, then many very gullible people could be hurt financially, as well as the lure of the destinations themselves, by bad publicity: . .” The airline added this was especially the case because a New Zealander was the figurehead of the company and people had a tendency to brand a whole country by the actions of one or two people. At one point Skytrails asked Air New Zealand to carry its members at a special low fare, lower than the published rates, until it could get its own planes into the air. The request, according to another internal Air New Zealand letter, was for a round-trip fare of SUSSOO from Los Angeles to Nandi. Fiji, and return on a yearround basis. Air New Zealand countered with a suggestion that Skytrails put members on Air New Zealand planes at Group Inclusive Tour (G.1.T.) rates, the lowest published fare from North America. This letter, signed by the marketing manager, overseas, Mr I. B. Cobum, says that at three meetings with Mr Purchase it had been extremely difficult todetermine a responsible status and earning potential for Skytrails. "Quite frankly I am not sure if they themselves honestly believe that the operation will actually take off." “In the meantime it is most important that we do ; convey the necessary en- ! couragement and commer-

cial co-operation to Mr Purchase’s organisation and that we do not leave ourselves open to any form of media criticism, as an airline financially in trouble, who are in the position to turn away ’potentially good business from the United States'." The beginnings of the club, so far as can be determined, goes back to an agreement signed at Manly, Whangaparaoa, on March 4, 1981, between Mr Purchase and another New Zealander, Mr Dudley Porter, who left the organisation in May last year. Mr Purchase disclosed the contract with Trade Winds on October 4 and said: “Basically that is all I can tell you. We are projecting the inaugural flight for members as November 5 and we have an association with other travel clubs in the United States. “We had a problem or two with investors in Pacific Skytrails and what we did in order to clear up any of the problems that had occurred, the company was reincorporated as Sunjet and Skytrails will be pursuing a line of prosecution against the previous investors for breach of contract."