Airline cuts back Chch routes as costs surge
The airline will no longer fly Blenheim to Christchurch or Christchurch to Wānaka from the end of September.
That was after cancelling its services from Wellington to Taupo and Wellington to Westport last December and selling an aircraft.
Sounds Air managing director Andrew Crawford told Nine to Noon aviation has been severely hit by escalating costs, supply chain challenges and a weak New Zealand dollar that was threatening the viability of all regional airlines.
"In the last three months, we've had another half a million dollars of annual costs imposed on the business and at some point, you've just got to say 'no more. We just can't do it'," he said.
Instead, the business will focus on its core regional services, selling its fleet of five Pilatus aircraft and expanding its Cessna Caravan fleet that operates in and around the Cook Strait.
The decision will cost 10 staff their jobs across the Wānaka and Christchurch bases.
Crawford said they were flying more passengers than ever but the costs were so high, engineers were difficult to find and keep, and they had exhausted all other options to make the business viable.
Pre Covid, one of the avionic parts needed cost $28,000, but now the business was paying $70,000 for the same part.
"How many seats do you have to sell on a nine seat aircraft to make that work? It's impossible."
He acknowledged that people were already paying more for flights, saying fares had gone up more than 20 percent since Covid and they could go up another 20 percent and it still would not be enough.
Another cost was the recent hike of the passenger service levy from the Civil Aviation Authority, which he said would cost the business close to $300,000 a year.
"Where are we supposed to get that from? We've just got to pull that on the travelling public."
They had reached out to the government numerous times to no avail, being told the business did not meet the criteria for the regional infrastructure fund months after being told to apply for it, he said.
He was worried about the many regional people who used the flights to access healthcare and what they would do, Crawford said
The change was a relief in some ways as the pressure on the business, staff and shareholders was extreme, he said.
He was confident about the future of the business with its renewed focus on the Cook Strait, saying it was much more sustainable.
"The numbers we're seeing are just astronomical. We used to do four flights a day in and out of Nelson, I think on Friday, we did 12. The demand is there, people are flying and these are cheaper aircraft to maintain."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NZ Herald
11 hours ago
- NZ Herald
Unemployment: Job data show construction down more than 12,000 in year, more youth out of work
In 2022, many employers were desperate to find staff. But borders reopened, migrants arrived and the economy's post-Covid rebound slowed down. Gordon said young people were also often in the firing line for layoffs. He said recent data also indicated more people were staying unemployed for longer. 'Once you're out, it is hard to get back in ... What we've been seeing in recent surveys is the six- to 12-month group has risen quite substantially.' Job numbers for people aged 20 to 34 dropped by thousands compared with a year ago. But the cohort aged 35 to 39 filled 2% more jobs than a year earlier, according to Stats NZ. Economist and former Child Poverty Action Group spokeswoman Susan St John said support and benefits for some unemployed people were still miserly. St John said that wasn't always a problem if unemployment lasted a few weeks, but in a prolonged recession, it could be disastrous. 'It's why we continue wallowing around in this ugly recession. Our fiscal cushions are not well-designed.' GDP grew by 0.8% in the first quarter of this year but since 2022, Stats NZ has recorded four quarters of GDP decline, one flat and eight of growth, not adjusted for population. Last year, annual real gross national disposable income fell 0.3% and annual real gross national disposable income per capita fell 2.0%. St John, an associate professor at the University of Auckland Business School, said the country had major gaps in the safety net for some people in relationships. An unemployed central Auckland man aged 25 with cash assets of $1000, paying $300 a week in rent, with a partner working fulltime at the minimum wage, would qualify for only $74 a week before tax on Jobseeker Support. If single, the same man would qualify for Jobseeker Support of between $356 and $361 a week before tax, and a weekly accommodation supplement of between $70 and $147. St John said lack of demand in the economy, which she blamed on restrictive Government fiscal policy, was behind the decline in young adults filling jobs. Compared to June 2024, filled jobs in construction were down 6%, or 12,169 jobs. Manufacturing was down 2.5% or 5850 jobs year-on-year in the latest Stats NZ data. But across all industries, there was a 0.1% increase in filled jobs last month compared with the previous month. 'Construction is a quite cyclical and quite interest-rate-sensitive part of the economy,' Gordon said. He said the country recorded a surge in building consents for a couple of years after Covid. 'There tends to be quite a long pipeline from consent to completion. 'We have seen housing consents stabilise over the past year.' For that reason, the medium-term outlook for construction was not abysmal but recovery in construction jobs was still likely a few months away, Gordon said. He said employment was down in the North Island, but steadier in the South Island. 'The strong performance of the agri-sector is a big part of that.' Gordon said feedback from customers and colleagues often illustrated stark regional contrasts. 'In the North Island, there'll be a litany of woes. In the South Island, it's '$10 milk price, everything's all right'.' Seek's June employment report was also released today. It showed job ads were down 3% on May and 3% down on a year earlier. But Gisborne, Marlborough and Southland bucked the trend, with job ads in those regions up from the month before. Seek NZ country manager Rob Clark said job ad levels had been broadly flat for the past year. 'While the volume remains below pre-Covid levels, there are pockets of growth, which should be cause for some optimism.' John Weekes is a business journalist mostly covering aviation and court. He has previously covered consumer affairs, crime, politics and court.
Otago Daily Times
19 hours ago
- Otago Daily Times
Job ads fall for a second month
The mid-year economic slowdown appears to be weighing on the job market with job advertisements falling for a second month. Data from employment website Seek NZ showed job ads fell 3% in June from a month earlier, and 3% lower than a year ago. Applications per job ad - recorded with a one-month lag - were down 2% monthly. It comes as various economic datasets point to the country's economic recovery stalling in the middle of the year. Seek country manager Rob Clark said job ad levels remained broadly flat for the past year. "While the volume remains below pre-Covid levels, there are pockets of growth, which should be cause for some optimism," he said. Job ad volumes were mixed across the regions, with Gisborne, Marlborough and Southland the only regions to see month-on-month growth in June. In Auckland and Canterbury, volumes fell 2% in June, while Wellington fell 4%. Otago was flat, while Waikato fell 4%. The only industry to see an increase in volumes was Information & Communication Technology, with more demand for ICT managers and networks & systems administrators. "Despite a monthly dip in June, demand within government and defence has jumped 51% year-on-year, and we're seeing a growing number of industries return to annual growth within the professional and consumer services sectors," Clark said.
Otago Daily Times
a day ago
- Otago Daily Times
Longtime chairman made life member of national association
A pillar of the Oamaru Licensing Trust has received a national honour. Longtime chairman Ali Brosnan was made a life member of the New Zealand Community Licensing Trust Association last weekend. It was a great honour, he said. "Especially coming from a wee licensing trust like Oamaru, we're one of the smaller ones of the 16 licensing trusts that are left in New Zealand." Mr Brosnan has been on the Oamaru Licensing Trust for 23 years and has been chairman for the last 18. He also spent eight years on the New Zealand Licensing Trust serving as president, immediate past-president as well as junior and senior vice-president in his tenure. When asked for his favourite part of the role, the answer was simple — the people. "We don't have a huge turnover but we've had some great people." He first joined the Oamaru trust in 2002 because he wanted to give back to the community. "I had always been involved in Excelsior Sports Club over the years and we were always applying for funding through the licensing trust. "I sort of thought I'd like to get involved in that side of it but I was a wee bit naive in some ways in that once I got on to the trust I found there was a lot more to it than just giving out grants." After he joined, the trust downsized in 2004 selling off small country pubs and investing in the North Star, upgrading the restaurant and building the motel. It now owns four businesses with roughly 60 fulltime equivalent staff. Mr Brosnan has seen it all in his tenure from the 2008 World Financial Crisis to the Covid-19 pandemic. The pandemic put the trust back three to four years financially, he said. "I'm pleased to say now we've turned the corner. We'll turn a profit this year. "Tourism, which is a big part of what we do, is back up to about 80-plus-percent of what it was pre-Covid. "If we can get it back to 100% or better, we'll be pretty happy." The trust is "owned by the people for the people" . "The board members are only representing the people of Oamaru. "The more we can improve the value of our assets the better it is for the owners, the people of Oamaru. "We just want people to be proud of the business they own." Mr Brosnan will stand again in this year's election. Nominations close next Friday. "We'd like to see younger people involved in it as the trustees get older," Mr Brosnan said. "A bit like all elections, all public office, there's not a queue of people lining up to take these positions."
