Air cheaper than Silver Fern

Press, 27 October 1982, Page 3

Air cheaper than Silver Fern

PA Auckland Air New Zealand jets could have flown all Silver Fern passengers between Auckland and Wellington last year for $1.6 million less than it cost the Railways Corporation to carry them in the railcar. The rail service cost $5.8 million and. with losses of $3.42 million, the taxpayer subsidised each of the 47.666 passengers’ tickets by $72 for their average $5O trip, bringing the average individual fare to $122. But Air New Zaland’s Auckland to Wellington fare during 1981-1982 averaged only $BB. a saving of $1.6 million on the Silver Fern operation.

The 96-passenger train lost $6500 a trip on its return services, which run five times a week, in spite of running at loads as high as 85 per cent in low-peak periods. The daily Northerner lost almost $BOOO a trip, bringing its losses to $5.79 million. Passenger and freight ’revenues were $6.94 million, a total cost of $12.73 million. It carried 104.606 passengers during the year and in the first six months of 198283 to September 30 had carried 54,361 compared with the Silver Fern's 23,051. Mr Tony Jacques, of the corporation's head office, said a new accounting system based on “full cost allocation" tended to inflate the

costs of the trains. He said he could not . isolate a train's direct operating costs, such as maintenance, wages, catering, cleaning, and publicity. “Fully allocated costs include track and station maintenance, refreshment rooms, ticket offices, bookstalls, depreciation, and repairs to equipment. “They are items of expenditure which must be met and must be allocated somewhere," said Mr Jacques. A Railways booklet, “The Costs of Providing Social Services,” published at the week-end, showed that all long-distance railway services cost $41.5 million, earned $15.74 million, and lost $25.76 million.