mad_atta
Jun 1, 03, 8:21 pm
Here are some interesting tidbits from an interview with Ralph Norris published in an industry magazine (Orient Aviation):
In the past year NZ has slashed debt to equity ratio from 93% to 68% Domestic operating costs have been cut 20-30% and traffic has increased 23% "Our ideal long-haul position is to have one single family of aircraft, somewhere around a 300-seater. We see that providing us with significant cost savings" - Ralph Norris (magazine speculates 777/A330/A340 under consideration, to be decided second half of 2003 or early 2004) All options for longhaul routes are being considered. They include abandoning Europe, perhaps replacing onward services from LAX through a codeshare with a partner. "Everything is up for grabs", said Norris. "I wouldn't discount anything as far as reshaping our long-haul services. It's about making sure what you do, you do
well, and that you make money out of it". Norris said he was amazed by the low margins on which airlines operate. Few airlines cover their cost of capital over the medium term, he said. "In the last three years, this industry has destroyed all the profits it ever made. That's a pretty sobering statistic. There have been tremendous productivity gains in the industry in the last three decades, but all that productivity and more has been given to the travelling public. It has not been captured in increased margins or increased levies for the airlines." Norris believes not enough consideration has been given by the competition authorities to the presence of fifth freedom carries on Tasman routes. Air NZ not only compete against QF and vice versa, but vie for passengers with Thai, Malaysia, Garuda, Royal Brunei, Aerolineas Argentinas, Lan Chile, Air Tahiti Nui, and Polynesian Airlines. "To say we have 90% market share between us and Qantas is overstating it. It appears they (competition bodies) are taking a view that this is through flying, not point-to-point. We know there is a significant majority of people flying point-to-point across the Tasman on these flights." Regarding Star/oneworld clash if the deal is approved - "In the final analysis our decisions must be in the interests of Air NZ and our competitors will make these decisions as well." Norris has a clear vision for the airline, seeing it as a portfolio of inter-related aviation businesses. "I'm here to do a job and I don't see myself retiring from Air NZ when I'm 60. I'll be gone well before then"
[edited to fix some squiffy line breaks]
[This message has been edited by mad_atta (edited 06-01-2003).]
In the past year NZ has slashed debt to equity ratio from 93% to 68% Domestic operating costs have been cut 20-30% and traffic has increased 23% "Our ideal long-haul position is to have one single family of aircraft, somewhere around a 300-seater. We see that providing us with significant cost savings" - Ralph Norris (magazine speculates 777/A330/A340 under consideration, to be decided second half of 2003 or early 2004) All options for longhaul routes are being considered. They include abandoning Europe, perhaps replacing onward services from LAX through a codeshare with a partner. "Everything is up for grabs", said Norris. "I wouldn't discount anything as far as reshaping our long-haul services. It's about making sure what you do, you do
well, and that you make money out of it". Norris said he was amazed by the low margins on which airlines operate. Few airlines cover their cost of capital over the medium term, he said. "In the last three years, this industry has destroyed all the profits it ever made. That's a pretty sobering statistic. There have been tremendous productivity gains in the industry in the last three decades, but all that productivity and more has been given to the travelling public. It has not been captured in increased margins or increased levies for the airlines." Norris believes not enough consideration has been given by the competition authorities to the presence of fifth freedom carries on Tasman routes. Air NZ not only compete against QF and vice versa, but vie for passengers with Thai, Malaysia, Garuda, Royal Brunei, Aerolineas Argentinas, Lan Chile, Air Tahiti Nui, and Polynesian Airlines. "To say we have 90% market share between us and Qantas is overstating it. It appears they (competition bodies) are taking a view that this is through flying, not point-to-point. We know there is a significant majority of people flying point-to-point across the Tasman on these flights." Regarding Star/oneworld clash if the deal is approved - "In the final analysis our decisions must be in the interests of Air NZ and our competitors will make these decisions as well." Norris has a clear vision for the airline, seeing it as a portfolio of inter-related aviation businesses. "I'm here to do a job and I don't see myself retiring from Air NZ when I'm 60. I'll be gone well before then"
[edited to fix some squiffy line breaks]
[This message has been edited by mad_atta (edited 06-01-2003).]