Domestic airline service - quality again

Is it a sign of change that both Air NZ and Qantas have now reintroduced food service on board the main trunk domestic flights, with promises of more improvements to come?

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Back before Ansett NZ arrived in the 1980s, when Richard Prebble lifted the limit on foreign investment in domestic airlines to 50%, Air NZ offered just a simple tea/coffee/orange juice service with legendary unopenable packs of cheese and crackers. The arrival of Ansett saw hot meals arrive and first class on domestic flights (with a choice of hot meals), airbridges and business lounges. Air NZ quickly followed suit creating Koru Club, introducing cold meals (then hot meals) and business class, as well as spending several million upgrading the then clapped out mostly central government owned Wellington domestic terminal (oh yes the wonders of government ownership).

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We had around 15 years of competition on service, as Ansett NZ went from strength to strength, was hurt badly by a long running industrial dispute, and eventually was flogged off to become Qantas NZ, which folded and was replaced by Qantas proper operating domestically in NZ. Meanwhile, Air NZ was privatised and came to dominate domestic routes, before investing in Ansett Australia - due to Australian government rules on foreign investment - and nearly collapsing as Dr Cullen refused to let Singapore Airlines bail it out.

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Then Air NZ introduced Express Class, gutting Business Class on domestic flights and all food and drink, except tea/coffee and a cookie - which itself was about to be cut last year.

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Now it's halfway back, with snacks, free bar, and other enhancements. More is to come, with Qantas reintroducing flights to Christchurch, upgrading its domestic lounges, and Air NZ to create a new premium section at the front of its 737s with 3-4 inches more legroom than at present, for full fare and top tier frequent flyers.

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Just another cycle - but it is only a coincidence that service was poor under Muldoon's socialism, got better under Douglas's free market reforms - stayed that way until two years after Labour got into power -then went cheap and is now emerging again to be higher quality just as Labour is about to lose.

Cheers Helen

So according to the NZ Herald, Helen Clark agrees with me on Air NZ paying the going rate for its Shanghai based crew.

So if there is allowed to be a going rate for labour in China which isn't decided by the government, why isn't it the same in New Zealand?

Or does the fact the airline is predominantly state owned influence things?

What foreigners can do to an airport

Many people flying to and from London's Heathrow Airport are about to find out. In July 2006, Grupo Ferrovial - a Spanish company - bought BAA plc. BAA plc owns Heathrow. Yes I know, foreigners. Think of the risks!

Now the approval and plans for Terminal 5 were made in 2001, but now Terminal 5 is about to open, on time and under budget. The first passengers will use it on 27 March 2008. British Airways is transferring almost all of its flights there from Terminals 1 and 4, which will provide much capacity at both those terminals to reduce overcrowding across the airport (Terminal 1 is destined to become the Star Alliance terminal, Terminal 4 for the Skyteam alliance and most airlines not belonging to any alliance).

Now Heathrow is far too often a nightmare - largely because of gross underinvestment over many years and a lack of capacity. Terminal 5 promises to transform the experience for British Airways customers, as well as allowing for the terminals it vacates to have ample spare capacity which will be used by reshuffling the airlines broadly into a terminal for each airline alliance.

See The Times for a photo series of the opening of Terminal 5 by the Queen.

So what is happening in Tibet?

Undoubtedly the Chinese government is tackling dissent with its usual ruthlessness. David Farrar notes pointedly how Helen Clark is treating both the Chinese government and Tibetan protestors with moral equivalency:

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“The Government is concerned at the reports of violence and is trying to obtain more accurate information. It calls on all sides to exercise restraint.”- Prime Minister Helen Clark

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It could have come from China's official Xinhua news agency commenting on any foreign trouble.

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However, it is important to note that the protesters are not angels. Some are targeting any Han Chinese they see. James Miles of the Economist is the only foreign correspondent legally allowed to be in Lhasa reports he saw:

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crowds hurling chunks of concrete at the numerous small shops run by ethnic Chinese lining the streets of the city’s old Tibetan quarter. They threw them too at those Chinese caught on the streets—a boy on a bicycle, taxis (whose drivers are often Chinese) and even a bus.

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As your correspondent spoke to a monk in the backroom of a monastery, a teenage boy rushed in and prostrated himself before him. He was a member of China’s ethnic-Han majority, terrified of the mobs outside. The monk helped him to hide.

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However, it is NOT an orchestrated foreign conspiracy that is "anti-Chinese", despite the hysterical claims of the Chinese government. Tibetans deserve freedom of speech. Until they have this, China has no moral authority. Without the right to criticise government and hold it to account, it is simply fascism.

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However, the condemnations from the New Zealand government, the one that so claimed the moral highground on disarmament and Iraq - are so absent.

Toll NZ demands you subsidise its investment

The Toll NZ CEO David Jackson is in the NZ Herald pleading the case for you being forced to pay to prop up its investment, having done a deal with the government a few years ago that has gone sour.

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Oh dear, how sad. Having already NOT paid what it was meant to in track access fees to OnTrack to cover the maintenance of the network it uses to make a profit - it wants more and the reasons it gives are worth closer investigation. Below are some of his points and my response:

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"Statistics show a significant conversion of freight from road to rail (meeting the Government's objectives), and the industry is poised to move forward, more so, arguably, than at any other time in the past 50 years."

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Well fine, so you've had success. Good for you.

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"We have taken no dividends, we have improved the efficiencies, we have motivated staff and we have a business that is now viable. We have done a lot of this with fundamentally the same set of tools (people, rolling stock and assets) that we started with."

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This puts paid to the doggerrell spread by the Standard that Toll has been asset stripping, which is a complete lie.

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"We are prepared to invest more but require reasonable returns. We want a regime that puts tensions in place to achieve the most cost-effective outcome, that all stakeholders are accountable in this essential service to the country, and that a true, positive economic outcome is achieved. With limited funding, maximising value is critical."

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Ohhh wait for it. "All stakeholders accountable", I know what you want, because you then say...

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"For that to occur, a subsidy is required in some form."

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Ah, so we all have to prop up your investment, by force. Some investment.

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"Road transport in itself does not carry its full costs. There is no recognition of road operators receiving a subsidy but arguably they do. "

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Neither does rail, since you are getting a subsidy on maintenance of the rail network. The only subsidy of road transport is spending on local roads from rates. Besides, since you operate a trucking network you already get a subsidy then? So presumably charges for your trucks should rise then instead? No, didn't think you'd advocate that.

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"Rail operations the world over do not meet their costs and require significant subsidisation."

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Oh really? So that's why British rail freight operations are commercially operated, why US railways are commercial and privately owned, and so are most Australian rail freight operations. What nonsense.

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"I think it needs to be understood that in a country of four million people, with distances which make rail difficult to run commercially and growth opportunities that restrict the opportunity for scale improvements, there can be no room for inefficiencies."

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In other words you bought something marginal, and it's proving harder than you thought.

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"A final word of warning - customers are key. Without their buy in and satisfaction of their needs, rail has no future. If a subsidy is required, it is ultimately the customers along with the country as a whole, which is so desperate for infrastructure improvement, who will be the true beneficiaries."

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There we have it. So Fonterra, Solid Energy and the various forestry companies and freight forwarders - give Toll an offer. You are the true beneficiaries - so you should pay for it. The average family with two kids shouldn't be subsidising your freight movements. Oh, and all those on the left who think it is strategic - you chip in too, since you think it is so important put YOUR money where your mouth is - oh you don't tend to do that do you?