Rob Fyfe has decided that having more than NZ $1 billion of taxpayer money in the Air NZ bank isn't enough.
Proving once again that he is the evil socialist I initially pegged him as he now wants more taxpayer money to subsidise his failing airline, Air New Zealand [AIR.NZ] for "marginal routes."
Jeez Rob, I thought in the real world if something is marginal you simply either cut your costs to regain profitability or if you cant make a decent return simply stop operating.
How bad are things at the national, taxpayer owned carrier then?
Well, the pressure is coming from a number of sides.
Yet another tourist downturn, and these happen frequently for a number of reasons and is why I would rather burn my money than "invest" in an airline, means that bums on seats are down.
This doesn't look like it is going to get better anytime soon. In fact it could get allot worse.
More competition from the likes of Virgin Pacific/Blue and Jetstar mean those margins that Fyfe talks about are getting thinner than the air in a depressurised 747 before a crash landing.
The cost of jet fuel is rising quicker than you can say the Arabs have got me by the family jewels. Every buck of extra cost on aviation fuel means millions off Air New Zealand's bottomline.
To be fair, everyone is being affected by this global pandemic ("swine flu" included) of economic circumstances and every airline is getting it up the tailpipe but having said that, why, with little money left in the taxpayer pocket, should we now be stumping up more borrowed money from China to keep a failing business in the air?
If you are a Air NZ shareholder (apart from the taxpayer) you should be very worried.
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c Share Investor 2009
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