Monday, August 10, 2009

Air NZ unveils new Rotorua-Sydney flights

New Zealand cities seem to have a culture of paying for parochialism in the name of tourism promotion.

I found it interesting reading about Rotorua's announcement of gaining international status for its airport. Typical of the reporting for any subsidised "tourism" venture, there was gushing commentary on all the supposed downstream benefits.

What was missing was any analysis on how much taxpayers are paying for the regional kudos of setting up an international flight service, the effect on domestic services and the opportunity cost for competing airports.

At a time of the worst economic conditions experienced by the airline industry, Rotorua ratepayers not only will be saddled with initial capital costs, but substantial ongoing operating costs of maintaining an international airport. Future loses will be offset by cross subsidising from domestic traffic and targeted rates to businesses that are perceived to gain direct benefits.

Tauranga have plans to boost vistor numbers by further investment in its airport in an attempt to lure international flights. Napier and Hastings seem to be more advanced with their recent announcement to take a punt with ratepayers money by borrowing $9 million for a runway extension that no airline will use. Air New Zealand generates most of the traffic in Hawkes Bay and there is good reason for this - There is simply not not enough traffic to sustain a competitor. Jetstar and Pacific Blue do not appear to have any plans to service Hawkes Bay and the idea of international flights appears to be fascicle.

The "build it and they will come" vision of councils didn't work for Invercargill airport, that flushed vast amounts of public money on international facilities that are gathering dust.

Risking public money is sold as being visionary, however councils and governments should be relinquishing their ownership in airports to allow private stakeholders with business acumen that are able to make logical decisions based on actual market demand.

By our reckoning, it would be more cost effective for Rotorua ratepayers to purchase several limousines that would offer free personalised transport by delivering tourists from Auckland airport to their city... But that would be silly;-)

7 August 2009

Air NZ says it will soon start flying between Rotorua and Sydney.

The new service, using one of its 152-seat Airbus A320 plane, will start twice a week from December 19.

"Rotorua is an iconic tourism destination and well known amongst Australian travellers. We see the potential for good passenger numbers from Australia and the continued strength of inbound tourism from there has lent weight to our decision," said airline general manager for Tasman Pacific Glen Sowry.

"The new services will also make Rotorua significantly more accessible for visitors from Asia who often visit both Australia and New Zealand and whom we can now bring directly from Sydney to Rotorua instead of via Auckland.

"Through winter the new service also provides significant opportunities in attracting more Australian skiers to the Central North Island ski fields, something I'm sure Mt Ruapehu and nearby businesses will be looking forward to," said Sowry.

He said that while the Tasman remained one of the airline's most challenging markets, it was sill looking for new opportunities, especially when there was strong community support for a new service.

Air NZ is launching the service with a one-way special fare of $209.

Source: Click HERE

Click the "Get Widget" link below to place this widget on your website or blog!