ROUGH RIDE
After 80 years of flying further, faster and more often, our national carrier is forced back to its humble roots. Lorna Thornber reports.
It’s hard to watch the video Air New Zealand created to mark its 80th birthday on April 30 and not feel some sense of loss.
As much as we liked to complain about the airline before the coronavirus pandemic stopped its global fleet in its tracks, many of us were proud to call one of the world’s top-rated airlines our national carrier. And many of our most memorable journeys began and ended with them.
In January, Air New Zealand’s future looked bright. Thriving in a golden age of travel, the airline had posted a healthy profit thanks to a booming tourism sector, low fuel prices and sound management.
With new aircraft on order, a non-stop service to New York on the horizon, and potentially game-changing economy class sleep pods in the works, it seemed the sky was the limit.
And then the Covid-19 crisis happened, travel was brought to a near-standstill worldwide, and Air New Zealand, like all other airlines, was forced to ground planes, axe routes and lay off staff.
When Air New Zealand forerunner Tasman Empire Airways Ltd (TEAL) first flew from Mechanics Bay in Auckland to Rose Bay in Sydney in 1940, the trip took nine hours with 10 passengers aboard the ‘‘flying boat’’.
Within a month of the government ordering three Short S30 Empire flying boats to launch New Zealand’s first passenger aircraft service, World War II was declared and Britain decided it could only spare two. Operated by TEAL, the two aircraft, Aotearoa and Awarua, remained New Zealand’s only link to the outside world throughout the war – but only the well-off could afford a ticket.
In the 1990 documentary
Reaching for the Skies – an End to
Isolation, Peggy Finley, a passenger on one of these early trans-Tasman flights, said they were ‘‘very exciting, very romantic and visually a fantastic experience’’. One dressed, she said, ‘‘as if you were going to Ellerslie Racecourse’’ and meals were oysters and tomato soup followed by roast chicken, ham and salad. With fruit salad, cheese and biscuits for dessert.
Designed for coastal flights and short hops, the flying boats were pushed to their limits over the turbulent Tasman Sea.
In the documentary, former TEAL chief pilot Oscar Garden recounted the experience of hitting a ‘‘very bad headwind’’ halfway across the Tasman after receiving a ‘‘crook weather forecast’’. Too late to turn back, they pushed forward, arriving in Sydney 12 hours and 10 minutes after takeoff. ‘‘The engineer said we had about five minutes’ petrol left.’’
TEAL’s trans-Tasman services to Sydney continued for 20 years, providing, as New Zealand encyclopaedia Te Ara puts it, ‘‘a memorable spectacle for thousands of people, as well as a luxurious style of air travel few would experience again’’.
TEAL used British-made Solents, considered the last of the great flying boats, on its worldfamous Coral Route from Auckland to Fiji, Samoa, the Cook Islands and Tahiti, still considered one of the world’s most romantic journeys ever.
Taking 30 hours, the journey included a brief stopover on the Cook Island of Aitutaki, during which passengers enjoyed lunch and a swim while the plane refuelled. ‘‘They came out and collected us off the flying boat and we were taken on to this gorgeous little atoll where you could put your bathing suit on and they covered you with leis,’’ says Finley, who also flew the Coral Route.
On the domestic front, 1945 proved a pivotal year, with new legislation creating a single domestic airline, the National Airways Corporation, which assumed control of private airlines two years later.
In its first five years of operation, the fledgling domestic airline lost money and suffered three fatal crashes but, with
Kiwis taking to flying like they weren’t named after flightless birds, it still managed to expand. By 1952, it was in the black again and the airline remained the dominant domestic airline until its enforced merger with Air New Zealand in 1978.
New Zealand had entered the jet era by the time the government took full control of TEAL in 1961, changing its name to Air New Zealand in 1965.
Air New Zealand soon moved into its new base in Auckland’s Ma¯ ngere with the Americanmade Douglas DC-8 as its flagship aircraft. The long-range jet enabled the airline to spread its wings and, within a few years, it had increased trans-Tasman and Pacific Island services and begun flying to Asia, North America and the United Kingdom.
In those days, air travel was a glamorous affair. Even those in the cheap seats were welcomed aboard with eye masks, socks and packs of postcards, and air hostesses in Christian Dior dresses served three-course meals on bespoke Crown Lynn dinnerware.
First-class passengers had whole crayfish delivered to their seats. Less glamorously, everyone either smoked or inhaled it – the bar menu included a selection of cigarettes, and the division between the smoking and non-smoking sections was hazy.
Kiwis quickly began to take pride in their small but plucky international carrier and this, together with a boom in tourism, saw the airline flourish financially, enabling it to transition to all-jet, wide-body and jumbo aircraft.
In 1979, however, the year after its merger with NAC, Air New Zealand experienced what remains both the airline’s – and New Zealand’s – deadliest disaster when a sightseeing flight over Antarctica crashed into Mt Erebus, killing all 257 people on board.
As Michael Wright said in the
White Silence podcast released by Stuff in November 2019 to mark
the 40th anniversary of the crash, the word Erebus has since ‘‘become shorthand for tragedy and controversy’’.
The crash was the start of a long story. ‘‘What came next was, in its own way, just as bad,’’ Wright said. ‘‘Erebus became a story about blame, when it should have been about grief.’’
The argument over who was at fault – the pilots or airline – dragged on for decades, preventing any real closure for affected families. In 2009, then chief executive Rob Fyfe apologised to the families of the victims for the way the airline had treated them after the disaster.
‘‘But he didn’t say anything about what Air New Zealand did before the crash,’’ Wright said. ‘‘Things that, even if they didn’t cause the disaster outright, were appalling mistakes and a black mark against the organisation.’’
The Government finally offered up an apology in November 2019, with Prime Minister Jacinda Ardern telling family members of victims: ‘‘The time has come to apologise for the actions of an airline then in full state ownership which ultimately caused the loss of the aircraft and . . . of those you loved.’’
The 1980s saw Air New Zealand transition to a truly global airline, with the first flight to London via Papeete and Los Angeles taking off in 1982.
The twice-weekly flights to London were considered so luxurious that they were dubbed the ‘‘Ritz of the Skies’’.
First-class passengers settled into sheepskin-covered seats with glasses of champagne, dined on the likes of caviar, foie gras, lobster and beef wellington (carved seatside until safety regulations put an end to it); and watched back-to-back movies on the big screen up front.
The cost was about $16,000 (roughly $57,000 today).
The Queen flew Air New Zealand from London to Auckland via Los Angeles in 1995, making it the first routine commercial flight used by a reigning British monarch. Prince William has also flown the route, first as a baby with his parents and, in 2019, on a tour of the Pacific.
When competitive private enterprise gained traction in the 1980s and the government opened domestic airlines to foreign ownership, Air New Zealand quickly came under pressure. On a main route, it faced particularly stiff competition from Australian airline Ansett and later Qantas.
Air New Zealand was privatised in 1989 and, in 2000, took control of Ansett after paying Rupert Murdoch’s News Corp about A$580 million (NZ$610m) for its 50 per cent stake – which ultimately proved to be a $611m mistake.
Australian deputy prime minister John Anderson blamed Air New Zealand’s management for what he termed a ‘‘diabolical mess’’.
Air New Zealand acting chairman Jim Farmer, meanwhile, said Ansett executives had informed John Howard’s government three months before its collapse that it was losing A$18m a week and had net debt of A$1.9 billion.
The collapse of what had been Australia’s second-biggest domestic airline sparked strong anti-New Zealand sentiment across the ditch. Then-prime minister Helen Clark was caught up in the controversy when Ansett staff blockaded her Air New Zealand flight in Melbourne. ‘‘The Australians were like possums in headlights,’’ she told a New Zealand television station at the time.
Air New Zealand reported a $1.4b loss for the year to June 2001, including a $1.3b writedown of the Ansett subsidiary. The government proved its white knight, bailing it out to the tune of $885m and returning the airline to part state ownership.
With the global aviation sector in turmoil as a result of a downturn in travel, due in part to the September 11 terrorist attacks in New York, the airline’s recovery was far from certain.
Tasked with bringing the airline back from the brink, then-CEO Ralph Norris oversaw the introduction of a lower-cost ‘‘Express class’’ service on domestic routes in 2002. Business class was removed to make room for an extra 14 economy seats on each aircraft, while cost-cutting measures included a company restructure and a push toward online bookings.
It’s a message the airline has continued to push. It partnered with the All Blacks, hired homegrown designers Zambesi to develop new uniforms, capitalised on the success of Peter Jackson’s Lord of the Rings and The Hobbit movies, and produced semi-serious safety videos. In 2009, the Bare Essentials video featuring pilots in bodypaint ‘‘suits’’ generated more than 3m YouTube hits in its first 10 days.
The airline’s early adoption of new aircraft and innovation also played a key role in its return to profit and repositioning as a premium rather than lower-cost carrier.
In June 2014, its first Dreamliner touched down in Auckland. It promised cheaper airfares thanks to its extra seats and better fuel efficiency.
The airline had ordered 10 of the 787-9s, which had a list price of nearly US$250m (NZ$284m), as part of its ‘‘go beyond’’ strategy focused on building an international network through airline partnerships.
Air New Zealand now has more than a dozen Dreamliners, but the fleet has been constrained since 2017 due to problems with Rolls-Royce Trent 1000 engines fitted to the aircraft.
Former Walmart CEO Greg Foran became chief executive in February 2020. ‘‘With his experience of having to restructure in a really, really tough environment, he will understand which levers to pull very quickly,’’ said Irene King, former chief executive of the Aviation Industry Association at the time.
The current environment is of course tougher still – the result of what King described as ‘‘the biggest, meanest, ugliest black swan ever’’. ‘‘Black swan’’ is a metaphor for extremely rare events that strike out of the blue and have a severe impact.
Air New Zealand has since reduced its network capacity by 95 per cent, suspended dozens of routes, negotiated a $900m loan from the Government and set in motion a plan to reduce its headcount by 30 per cent – the equivalent of at least 3750 staff.
While a provision on the government loan says no routes on the existing network will close, experts are sceptical this will prove to be the case.
King has suggested that, in 12 months, the airline’s domestic operations may encompass just Auckland, Wellington and Christchurch, while economist Benje Patterson said the postCovid airline would focus on domestic and short-haul passenger services initially, along with cargo revenue.
‘‘The airline is likely to shy away from its newer destinations in Southeast Asia and its bold super-long-haul service to New York may be a step too far initially,’’ Patterson said.
Whatever the case, the 80-year-old airline will be returned to its roots as a small operator, albeit with a focus on domestic rather than international services.