Transport industry in ‘uncertain’ state

Press, 28 October 1982, Page 25

Transport industry in ‘uncertain’ state

Not since the Labour Party’s nationalisation plans of the 1930 s has the transport industry been in such a state of uncertainty,. said the chairman of The Mount Cook Group. Ltd. Mr R. W. Steele, at the annual meeting yesterday.

Mr Steele was referring to the Government's proposed White Papers ■on New Zealand’s aviation and ground transport industries.

The aviation paper had been three to four years in the making and few members of the industry have had the opportunity for current comment. The last draft Mount Cook’s management viewed was two years ago, “and a lot can happen in that time."

“We are concerned about the contents of this aviation paper and what it may hold for us and the industry," he said.

Mount Cook welcomed a review, for progress and to redress anomalies, but Mr Steele warned of the disaster that deregulation had on United States airlines.

To New Zealand, with its small population of three million and an already overextended domestic air network, total deregulation could well spell chaos and ruin.

A logical step-by-step modification built on experi-

ence, discussion, and cooperation could build a stronger, better industry for the future, he said. “At this late stage I can only hope that in the period between the publishing of the White Paper and its implementation, there will be a healthy measure of discussion and understanding."

Recommendations were not just confined to airlines. Agricultural aviation was faced by the threat of small co-operatives, and deregulation could bring about a drop in standards and more small co-operatives by groups of farmers. The farmers could sell their services on a commercial basis outside the cooperative, in competition with the industry operations. “Mount Cook is wellequipped and prepared to meet competition — but on compatible terms. The low cost finance and taxation advantages available to the farming community should not be applicable to agricultural aircraft, equipment, and fuel," Mr Steele said.

Deregulation in the road industry might open up some of the many lucrative routes held and controlled by the Railways Road Services, but the disadvantages would well outweigh the advantages. “Deregulation would see overnight entrepreneurs with a wide range of questionable equipment, vying for our established tourist markets, un-

dercutting, and under-servic-ing."

“A far greater capacity could be expected in the market than would be warranted by demand, and we could even expect overseas tour operators to establish New Zealand activities, as has happened in Hawaii and Europe. “In total, deregulation could cost this country a fortune in foreign exchange through the provision of unnecessary extra equipment and capacity, the loss of established overseas tour markets through the appearance of price-cutting inexperienced entrepreneurs, and' a period of near chaos for what has been a well-oiled and efficient transport industry,” Mr Steele said.