Grant Bradley: Long ties lose out to Air NZ facts of life

Air New Zealand's first Boeing 787-9. An airline needs a lot of money to invest in new planes that cost more than $150m each.

Air New Zealand likes making friends ... but it loves making money. Its cuddly Hobbit flight safety video persona is miles away from what shareholders demand come financial results time and one of the hungriest of those investors is the Government, which owns just over half of the airline.

Air New Zealand says it loses $26 a passenger from the 15 regional centres serviced by its ageing Eagle Airways planes, and its patience is up.

The economics of a 19-seat plane are not the same as a main-trunk jet and the Beech aircraft are old so the airline was faced with making a tough call for some towns and the 232 staff who now face uncertainty.

But as some lose out, others are winners as bigger planes are put on more routes. For leisure travellers to towns such as Gisborne, Taupo and Blenheim, this is great news.

Air New Zealand chief executive Christopher Luxon was vague on changes to frequency throughout the network, which is what counts if you're trying to do business in regional centres.

But he was clear on why the cuts were needed: Air New Zealand can support loss-making routes for only so long.

An airline has to make lots of money to invest in aircraft costing $150 million-plus and it is a far cry from the one that was losing up to $2 million a week not so long ago.

Luxon was brought in to put the foot down and drive profit. He's not about to let historic ties to some towns influence cold, hard business decisions.