Air New Zealand seeks lost altitude

The kiwi, a bird unique to this country, is flightless. That was the position Air New Zealand found itself in two years ago when all its DC-10 aircraft were grounded for about six weeks after a tragic crash in Chicago.

Now, with the arrival of three of five Boeing 747s ordered by the national airline, it has high hopes that it can forget its troubles with the DC-10s.

Not only was Air New Zealand grounded when the DC-10 crashed, but the same year one of its own DC-10s crashed in Antarctica, on Mt. Erebus. Although that crash was not the fault of the plane, the company's reputation ws tarnished when an investigation disclosed that the airline had wrongly placed all the blame on the pilot. Actually, Air New Zealand had changed the plane's computer course hours before the flight without telling the pilot. Furthermore, the airline was found to have covered up the accident's cause.A judge found the airline's report on the tragedy a "litany of lies."

Even the carrier's most faithful followers say it will take time for the airline to regain its standing in the world. Prime Minister Robert Muldoon believes the line is working on improving its image, but ". . . you get an experience such as they've had and obviously it has some effect." He adds: "In the eyes of most New Zealanders, it's a very good airline."

An Auckland Star editorial, however, says the public still has some doubts about the airline. "There is a clear desire to see the airline again operating with the efficiency and style that earned it such a high international reputation," the Star intoned.

According to Craig Saxton, an airline spokesman, Air NZ doesn't have an image problem. The new 747s, he says, are an effort to adjust to a changing market, not an effort by the airline to change its image.

The 747s, powered with Rolls-Royce engines, will cost the airline $420 million over 16 months (including services).They will have a greater fuel efficiency and about a 25 percent larger seating capability on transpacific flights than the DC-10s. Thus, Air NZ will be able to compete more effectively with Pan Am and Qantas, its major competitors. Continental, which also files to New Zealand, does not use 747s.

Although a recent survey showed that Air NZ had 59 percent of the market to the United States, 49 percent to Singapore, and 33 percent to Tokyo over the last three years, the carrier has been losing market share on its Pacific runs. Flights to the US make up 60 to 70 percent of the airline's Pacific market.

Also, Mr. Saxton says, "The 747s are very promotional." Judging from the local press, Air NZ has been quite successful on this score. When the airlinehs first 747 landed in Auckland, a Wellington newspaper ran the headline, "Hope flies in for Air NZ."

Air NZ's earnings reflect the company's problems. For its fiscal year 1981 ending March 31, it expects to report a loss of $45 million. Sorces close to the company indicate the loss for the next financial year could be even higher.

Saxton said the company is still rethinking its merger with National Airways Corporation in 1978. Before the merger, he says, Air NZ was "wildly successful." However, it now loses money on almost all domestic runs and breaks even only on its Wellington-Christchrch-Auckland flights.

Even operating at its normal 98 percent of capacity, the airline still loses money on most domestic flights.Thus, Saxton says, the airline is going through a staff reduction and a

The consolidation has taken a toll on staff morale, and the company has organized what knows what it needs to do," Saxton says, "and we are determined to pull ourselves up by the bootstraps."