Russell Fairbrother - the next big thing for me is railways??

In my ongoing series on Labour candidates...

Russell Fairbrother - Napier (no list placing): Napier was a solid Labour seat under FPP since 1954 and under MMP since 1996, until Russell Fairbrother won it in 2002. He lost in 2005 to National's Chris Tremain, with a 3591 majority, a stunning defeat in what was once Labour heartland country. National also beat Labour in the party vote with 42.2% vs 40.9%. However, like many Labour MPs who lost their electorates, he was back in on the list at number 38, but now he's not on it at all. Russell will be looking for a new job in a few weeks time and it will be about time.

Russell's own profile on the Labour 08 website is abysmal. He claims credit for "bringing the Meeanee expressway overbridge to Napier", when it was simply a very good project that was already a national priority for Land Transport NZ when it approved funding, some time ago. He did nothing. Even his own website is dormant. The rest of his profile is banal platitudes about "I experience both the good and bad of this beautiful city", such as what? Waiting lists? Parents not affording education at the schools they want to send their kids to? Crime? Finally, his biggest priorities for Napier are NOT dealing with intergenerational welfarism, crime and drug abuse among the underclass, inadequate educational achievement, the increasing cost of living, no he says...

"The next big thing for me to achieve is better public transport throughout Hawkes Bay and a strong rail link between the central North Island, Napier, Wairoa and Gisborne."

Well Russell, the railway line has existed for over 60 years, and it doesn't seem too many in Hawke's Bay want to use it often enough, and you can do a lot about improving public transport in Hawkes Bay after the election - you will be free to be a bus driver.

PREDICTION: Russell will be looking for a new job, probably defending hardened criminals because no organisation or individuals failed them "social structures did" (as his maiden speech enlightened us in 2002).

Harry Duynhoven - a shoo in

Labour Party candidates that are only standing for their electorates can only mean two things:
- Very high likelihood of winning electorate (so not needing a list position); or
- Token electorate candidate that the Party doesn't really care about winning anyway.

This isn't nefarious, as the Nats do this too. So after Sam Yau and Paul Chalmers (both clearly in the latter category) who else is standing for Labour, but not on the list?

Harry Duynhoven - New Plymouth: Yes, Harry has held New Plymouth since 1987 and has a loyal following. He is trained as a teacher, electrician and has a Masters in Public Policy, he is known as a hard worker and quite dedicated to local affairs. He is Minister of Transport Safety and Associate Minister of Energy. One of his pet projects has been compulsory third party property insurance for motorists, despite much official resistance to the idea. His majority was a solid 5439 in 2005, one of the few MPs to win a majority of votes cast (53.2%) during an election when Labour lost many provincial seats to the Nats. As National won the party vote in New Plymouth (44.5% vs 37.6% for Labour) it shows he has a high personal following in the seat. National's Jonathan Young will have to work hard to unseat Harry. Harry is unlikely to be too worried, but if on the night it is looking tight it will definitely be spelling doom for Labour, certainly Harry's personal following didn't translate into anywhere near as many party votes for Labour.

PREDICTION: Harry holds on but National's party vote lead will see his majority tighten.

Qantas to fly A380 to NZ for promotion

So why on earth has Stuff included a photo of an Emirates flight attendant inside an Emirates plane in its article, with the caption "Qantas by a nose: Qantas will be the first airline to fly the new Airbus A380 to New Zealand". (photo to the right).

Mainstream media, carefully edited and double checked - not.

The report says, of course, that Qantas plans no scheduled A380 service to New Zealand. The first routes will be from Australia to the USA, then to Hong Kong/Singapore and the UK. Emirates by contrast will fly an A380 service daily to Auckland.

Meanwhile, the easiest way for NZers to fly on the A380 is Singapore Airlines, from Singapore to London after flying from Auckland or Christchurch.

Airline industry faces enormous challenges

The massive hike in jetfuel prices, although moderated in recent weeks, has taken its toll in the airline industry worldwide. The most recent casualty, XL airlines (a UK low cost airline/ charter/tour operator) fell over because it hadn't hedged against price increases adequately, and had sold its tickets many months in advance. Being an operator at the bottom of the market left little room for fat, so it has gone. Others to fold have been Trans-Atlantic low cost carrier Zoom (again the bottom of the market has little profitability in it), US carriers Aloha, Skybus, ATA, Futura of Spain, Hong Kong's low cost carrier Oasis and the three all business class Trans Atlantic airlines, Maxjet, EOS and Silverjet. The last three folded because they couldn't offer the frequencies, network connections or airport access at London that was needed to be competitive.

So what does this hold for airlines down under? Well both Qantas and Air NZ have been hit hard, primarily because of a major collapse in international tourism from Europe, the USA and Japan. Long haul flights burn a lot of fuel, but the fare per passenger km is lower than short haul (and the staff/amenities required are much more elaborate than on short flights), so routes to and from Europe have been badly hit.

Air NZ in particular is vulnerable. Although it remains profitable, it is small, it retains the same risks it had before it bought into Ansett many years ago of not having much access to its nearest large market, and it extends itself far beyond New Zealand to an extent almost unparalleled by airlines of similar sized countries.

Air NZ's share price closing Friday was NZ$1.05, that is less than it was after it was largely renationalised in 2002, at NZ$1.75. More of your money Dr Cullen has spirited away. However, none of this should be a surprise:

- The domestic market remains largely stable, as Air NZ completely dominates the high yield flexible ticket business market and most provincial routes. It is shoring up that business by having converted the front half of its 737s to a new "Space +" configuration for Koru Club members, Gold and Gold Elite Airpoints members and full fare customers. That 3-4 inches more legroom will earn loyalty.

- The Trans Tasman market is growing, as Aussies and Kiwis travel closer to home, but it remains a bloodbath on prices. Pacific Blue is increasing frequencies as is (the apparently immune to oil prices) Emirates which will fly a daily Airbus A380 across the Tasman from February. Air NZ is also putting a "Space +" section at the front of economy class on its 767s and Airbus A320s on this route, also to shore up business traffic (as it will have the most legroom in economy class on the Tasman), as well as installing personal TVs for every seat in every class on 767s and A320s. Again it is hoping that aiming for the top of the market will increase yields, but it faces one huge disadvantage - no access to the Australia domestic market. Business traffic feeding to the Tasman domestically almost entirely goes on Qantas, because it can offer that.

- The Pacific Island market is low yield mostly, comprising ex.pat Pacific Islanders "going home" from NZ, and NZers going on holidays. They are all seekers of low fares. Air NZ has chosen to almost abandon the US/Europe to Pacific Island tourist markets through LA, although these have also plummeted significantly.

- The Asian market is also low yield. Tourism originating from Japan has collapsed significantly in the last few years. Air NZ has dropped routes to Nagoya, Fukuoka in recent years and the Osaka route is down to twice weekly (and about to be operated by 767s, a drop in 79 seats from 777s as well as a major drop in Business Class seating). The routes to China (Shanghai and Peking) are also disappointing, as there is very little business and premium economy demand, and the economy passengers are again at the cheap end of the market. Hong Kong has more balanced demand, though that is in part a feed to Lufthansa and Swiss flights to Europe (as well as the route to London).

- Routes to US and Canada tend to have plenty of business and premium economy traffic, but the economy class end of the market has declined significantly due to the recession in the US.

- Lastly the London routes are currently unprofitable, which is why the route via LA is being downsized to a 777 (also reflecting the increased competition between London and LA since the Trans Atlantic Open Skies agreement came into effect). UK origin tourism has dropped significantly, and Emirates has hurt Air NZ's business on routes to Europe.

So it's tough, it is a major exposure for the government as well, and like Delta/Northwest, BA/AA, Lufthansa and Brussels Airlines, Air NZ must be looking to hook up with a major foreign airline to survive and grow. To do this the government must water down its shareholding. At the very least the incoming government should look to dilute its over 80% shareholding to 50.1% to give the airline an injection of capital and the strategic linkages it needs to grow. Not doing so will see it struggle to sustain long haul routes at times like these, which is, after all, one of the key reasons for the government wanting the airline to remain in any case.

Ian, it's polite to ask ok?

I'm very surprised to see that Ian Wishart's latest weekly newsmag (which is available for sale at NZ$3 oer month, and then distributed for free online) includes a post of mine. You see I only found out because it was mentioned to me on the NZ Conservative blog (which I enjoy visiting for some good debate, as you can imagine we often disagree). The newsmag in question is on PDF here.

Now I don't mind, as what's important to me is that people read and think about what I have to say - this isn't my job. However I DO ask one thing. I don't care if you want to link to this blog and comment on posts on your own. That's part of how the blogosphere works. I also don't mind if other publications publish my blog URL and also post excerpts from it.

However if you want to repeat a post, in full, and publish it on a subscription based magazine or newspaper, ask. I know this isn't copyrighted, but it is simply polite and if you're seeking to make money from what I write I want to know.