Air NZ is cutting its throat

Air New Zealand chief executive Christopher Luxon has made it clear his attention is on the bottom line - running an airline and its core business of transport and freight is not on his agenda.

And why would it be? Before his appointment, Mr Luxon's knowledge of aeroplanes was limited to business class. His background is in marketing, money and giving his shareholders high returns.

In a recent Wanganui Chronicle story he talks about "tough calls", cutting services to cope with rising costs and increasing losses. The message is we "use it or lose it" as far as regular flights to Auckland are concerned.

Air NZ has already dropped flights to Wellington, which have been taken over by Sounds Air.

How do we "use it or lose it"? Fly to Auckland unnecessarily to prove a point and save our service? You either need to fly to Auckland or you don't - the fact it is the only destination provided by Air NZ from Wanganui limits one's choices and makes a mockery of his implied threat.

Add to that the ludicrous money required for a fare - even taking the "promised" price cuts into account - and the whole thing becomes a Monty Python sketch. "I'm sorry dear, I must fly to Auckland today to keep the numbers up." I'm not sure what the punchline is.

Air NZ is removing the Beech 19-seater aircraft from service, replacing them with 50-seater Bombardier Q300s. The arithmetic suggests Air NZ will reduce the number of flights, expecting to get more people on the bigger plane. It's cost-cutting at the expense of the service.

Here's something any marketer should know - reduce services and people will not flock to those remaining; they will just stop using them and look for alternatives.

Air NZ is cutting its domestic throat to prove a vague point and temporarily increase the shareholders' take-home pay.