1 00:00:00,040 --> 00:00:02,560 Speaker 1: There are warnings that overseas airlines may have to cut 2 00:00:02,600 --> 00:00:05,160 Speaker 1: New Zealand as a root of our jet fuel crisis worsens. 3 00:00:05,200 --> 00:00:08,039 Speaker 1: The companies are worried about their planes potentially being stranded 4 00:00:08,039 --> 00:00:10,280 Speaker 1: in New Zealand with not enough fuel to get home. 5 00:00:10,360 --> 00:00:12,680 Speaker 1: Cath O'Brien is the executive director of the Board of 6 00:00:12,680 --> 00:00:16,320 Speaker 1: Airline Representatives High Cath, Hi, Heather, is this an US 7 00:00:16,360 --> 00:00:18,599 Speaker 1: problem or is this an all over the world problem? 8 00:00:19,280 --> 00:00:21,320 Speaker 2: Well, I think this isn't all over the world problem. 9 00:00:21,360 --> 00:00:24,520 Speaker 2: But we can only worry about ourselves, so so a 10 00:00:24,560 --> 00:00:25,040 Speaker 2: bit of both. 11 00:00:25,200 --> 00:00:28,200 Speaker 1: Okay, So what's the trigger that makes these airlines decide 12 00:00:28,200 --> 00:00:29,120 Speaker 1: to cut certain routes? 13 00:00:30,000 --> 00:00:33,120 Speaker 2: Well, I think what we're looking for is to understand 14 00:00:33,400 --> 00:00:37,080 Speaker 2: that should jet fuel become scarce in New Zealand, which 15 00:00:37,360 --> 00:00:39,000 Speaker 2: my eyes are glued to the oil watch just as 16 00:00:39,040 --> 00:00:43,000 Speaker 2: much as yours, you know, should that happen, then we 17 00:00:43,159 --> 00:00:46,919 Speaker 2: need to have a mechanism by which that fuel might 18 00:00:47,000 --> 00:00:50,040 Speaker 2: be allocated or shared. And we've seen this in New 19 00:00:50,120 --> 00:00:52,320 Speaker 2: Zealand before, when we had the pipeline rupture, when we 20 00:00:52,360 --> 00:00:54,440 Speaker 2: had the jet fuel limitations in twenty twenty two and 21 00:00:54,440 --> 00:00:58,080 Speaker 2: twenty twenty three. Airlines know that jet fuel can be limited, 22 00:00:58,920 --> 00:01:00,400 Speaker 2: and we need to know what we'll have happen in 23 00:01:00,400 --> 00:01:01,040 Speaker 2: this situation. 24 00:01:01,480 --> 00:01:04,080 Speaker 1: So last time, tell me if I'm wrong. But last time, 25 00:01:04,160 --> 00:01:05,600 Speaker 1: wasn't it that they were allowed to use up to 26 00:01:05,640 --> 00:01:08,080 Speaker 1: eighty percent of their allocation? 27 00:01:09,000 --> 00:01:12,800 Speaker 2: Yeah, So what usually happens is fuel suppliers will impose 28 00:01:12,880 --> 00:01:18,120 Speaker 2: a fuel allocation event on customers when fuel becomes scarce 29 00:01:18,160 --> 00:01:20,120 Speaker 2: and they can't quite make it to the next shipment. 30 00:01:20,440 --> 00:01:22,399 Speaker 2: And so we've seen that a lot before. And so 31 00:01:23,080 --> 00:01:25,960 Speaker 2: when that happens, the fuel supplier picks a number that 32 00:01:26,080 --> 00:01:29,320 Speaker 2: stretches the available fuel out to the new ship. 33 00:01:29,240 --> 00:01:31,320 Speaker 3: If you like. But so and so you know that 34 00:01:31,400 --> 00:01:33,959 Speaker 3: might happen, right, So that sounds like there will not 35 00:01:34,040 --> 00:01:36,720 Speaker 3: be there's no real risk of being stranded because as 36 00:01:36,760 --> 00:01:39,000 Speaker 3: long as you've got a percentage of your allocation, you 37 00:01:39,040 --> 00:01:41,160 Speaker 3: still have something available to you, don't. 38 00:01:40,920 --> 00:01:43,480 Speaker 2: You No, that's right. And even if you had your allocation, 39 00:01:43,760 --> 00:01:46,360 Speaker 2: would you would fly your aircraft back home and you 40 00:01:46,440 --> 00:01:48,720 Speaker 2: might cancel a later flight. It's not a question of 41 00:01:48,720 --> 00:01:52,360 Speaker 2: whether airlines we'll just sort of be stuck here. But 42 00:01:52,400 --> 00:01:55,680 Speaker 2: I think you know there is a need to plan 43 00:01:55,760 --> 00:01:58,360 Speaker 2: it as to what will happen to that air connectivity. 44 00:01:58,800 --> 00:02:01,520 Speaker 1: So it is are you going public with us because 45 00:02:01,520 --> 00:02:03,760 Speaker 1: you're not getting the sense that this is being actively 46 00:02:03,840 --> 00:02:05,320 Speaker 1: considered and discussed in Wellington. 47 00:02:06,200 --> 00:02:09,400 Speaker 2: Certainly, I have actively been discussing it in Wellington, and 48 00:02:09,440 --> 00:02:13,240 Speaker 2: it's not yet clear that we have a well understood 49 00:02:13,280 --> 00:02:15,800 Speaker 2: plan as to what might happen if we run a 50 00:02:15,800 --> 00:02:19,480 Speaker 2: bit shorter jet fuel. And I think the chances of 51 00:02:19,560 --> 00:02:24,120 Speaker 2: running shorter jet fuel are non zero. You know, if 52 00:02:24,160 --> 00:02:26,359 Speaker 2: I look at those boats, and you know, there could 53 00:02:26,440 --> 00:02:30,320 Speaker 2: be a delay in a shipment, and it's reasonable to 54 00:02:30,440 --> 00:02:33,040 Speaker 2: think that that might happen, and so we should plan 55 00:02:33,080 --> 00:02:35,200 Speaker 2: appropriately now if. 56 00:02:35,080 --> 00:02:38,120 Speaker 1: We do rune, like, what is the most likely scenario? 57 00:02:38,360 --> 00:02:40,280 Speaker 1: If we do miss a shipment, what happens? 58 00:02:41,000 --> 00:02:44,280 Speaker 2: So the likely scenario, and what has happened before, is 59 00:02:44,320 --> 00:02:47,880 Speaker 2: that we might miss a shipment or not have quite 60 00:02:48,000 --> 00:02:50,560 Speaker 2: enough on the water on the way to us, And 61 00:02:50,600 --> 00:02:53,520 Speaker 2: the fuel suppliers will realize this first because they know 62 00:02:53,560 --> 00:02:55,720 Speaker 2: how much we have and they know how much they've ordered, 63 00:02:55,840 --> 00:02:57,880 Speaker 2: and they will realize that there is a need to 64 00:02:57,919 --> 00:03:04,200 Speaker 2: make an allocation. And that happens with about twelve hours notice, 65 00:03:04,400 --> 00:03:07,400 Speaker 2: So the fuel supplies will advise the airlines and from 66 00:03:07,440 --> 00:03:10,840 Speaker 2: midnight that night the allocation is in effect now. Usually 67 00:03:11,160 --> 00:03:14,080 Speaker 2: airlines can pick up some fuel from other countries on 68 00:03:14,200 --> 00:03:16,280 Speaker 2: the way out of New Zealand to get home again 69 00:03:16,360 --> 00:03:20,360 Speaker 2: if they are limited here. But in this particular strange situation, 70 00:03:20,840 --> 00:03:23,359 Speaker 2: if New Zealand is limiting jet fuel, so might other 71 00:03:23,480 --> 00:03:27,040 Speaker 2: nations be, and so we cannot necessarily tech stop and 72 00:03:27,120 --> 00:03:29,480 Speaker 2: pick up some extra gas, such as we've done in 73 00:03:29,520 --> 00:03:32,480 Speaker 2: the past to manage these situations. Airlines will be left 74 00:03:32,520 --> 00:03:36,200 Speaker 2: in the unfortunate circumstance of just having to cancel services instead. 75 00:03:36,480 --> 00:03:39,040 Speaker 2: That is the only choice we will have, and so 76 00:03:40,080 --> 00:03:42,880 Speaker 2: because of that we need to make a plan now 77 00:03:43,320 --> 00:03:45,000 Speaker 2: to get through this. 78 00:03:45,360 --> 00:03:47,640 Speaker 1: Are you seeing any indication that there is a slowdown 79 00:03:47,680 --> 00:03:51,520 Speaker 1: of supply or is it still completely normal at the minute. 80 00:03:51,640 --> 00:03:54,400 Speaker 2: At the moment, it looks like we've got sufficient supply 81 00:03:54,800 --> 00:04:00,000 Speaker 2: in the current time. And I have a close eye 82 00:04:00,120 --> 00:04:03,200 Speaker 2: on the information published by MB which gives us the 83 00:04:03,240 --> 00:04:08,000 Speaker 2: fuel days both on shore and on ship, and the 84 00:04:08,040 --> 00:04:11,360 Speaker 2: line I'm interested in most is the orders at the 85 00:04:11,480 --> 00:04:16,159 Speaker 2: very bottom, which is the orders on ship, and that 86 00:04:16,240 --> 00:04:19,320 Speaker 2: only goes out to one April, that data, which is 87 00:04:19,360 --> 00:04:22,000 Speaker 2: not very far away, and beyond that we have no 88 00:04:22,160 --> 00:04:24,960 Speaker 2: visibility as to watch it. Fuel there may or may 89 00:04:25,040 --> 00:04:26,839 Speaker 2: not be on their way to New Zealand, and I 90 00:04:26,880 --> 00:04:29,599 Speaker 2: think that's the point at which we need to be 91 00:04:29,600 --> 00:04:30,200 Speaker 2: paying attention. 92 00:04:31,040 --> 00:04:33,000 Speaker 1: Kath. It's good to talk to you. Appreciate your time 93 00:04:33,080 --> 00:04:36,680 Speaker 1: very much. Kath O'Brien, bord of Airline Representatives. 94 00:04:39,200 --> 00:04:42,360 Speaker 3: For more from Heather Duplessy Allen Drive, listen live to 95 00:04:42,480 --> 00:04:45,479 Speaker 3: news Talks. It'd be from four pm weekdays, or follow 96 00:04:45,520 --> 00:04:47,320 Speaker 3: the podcast on iHeartRadio.