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Speaker 1: A new report reckons the increase in domestic airfares maybe

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Speaker 1: due to a lack of the right kind of planes.

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Speaker 1: In particular, airlines apparently don't have access to suitable nineteen

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Speaker 1: to fifty seat passenger aircraft. In New Zealand has abandoned

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Speaker 1: some regional routes, but the gap in the market hasn't

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Speaker 1: been filled yet. Now Dwayne em Andy is the chief

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Speaker 1: commercial officer for air Chathams and is with us. Now, Hey,

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Speaker 1: Dwayne Good, is this the problem? You guys don't have

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Speaker 1: these right kind of planes.

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Speaker 2: Ah, No, we do. We do, they're just not making

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Speaker 2: them anymore. So we're using older aircraft. And with older aircraft,

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Speaker 2: you know, it becomes a bit more maintenance intensive and

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Speaker 2: you've got to reinvest in them, so it starts to

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Speaker 2: cost a lot.

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Speaker 1: Why don't they make them anymore?

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Speaker 2: That's good question. There are a few operators like ATR

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Speaker 2: still produce new aircraft. I think Dawny has got a

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Speaker 2: new variant coming out that's in that sort of thirty

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Speaker 2: seat category. But yeah, I guess everyone's starting to look

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Speaker 2: sort of ten years down the track and see what

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Speaker 2: the new generation aircraft going to look like and putting

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Speaker 2: a lot of investment into that.

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Speaker 1: Okay, see, but so they are still making them. They're

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Speaker 1: making these planes. Do you need these planes?

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Speaker 2: Yeah? I think they serve a really important role, especially

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Speaker 2: in remote regional connectivity. But I guess what's also happening

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Speaker 2: is that you're seeing bigger airlines, especially looking at centralizing

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Speaker 2: in larger regional hubs, using larger aircraft, potentially at less frequency,

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Speaker 2: but filling those planes up lower seat cost of They

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Speaker 2: can do that and that's quite effective for them. So

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Speaker 2: obviously the net result of that is some of the

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Speaker 2: smaller regional ports, especially in New Zealand, just aren't serviced

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Speaker 2: as frequently as they used to be, in some cases

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Speaker 2: not at all.

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Speaker 1: How much trouble are you guys in financially given what's

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Speaker 1: going on with the recession.

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Speaker 2: Yeah, I mean it's challenging for aviation businesses at the moment.

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Speaker 2: I think for us really it was, you know, we

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Speaker 2: had a pandemic and now we've got a recession. It's

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Speaker 2: just working through that. You know, we're very well supported

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Speaker 2: by our bank, so we're very fortunate for that. But yeah,

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Speaker 2: it's really really tough. I mean, thirty six percent increase

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Speaker 2: in direct operating cost cost of capital is very high

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Speaker 2: for us, and then it's our ability to keep reinvesting

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Speaker 2: in our business at a time where you're just just

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Speaker 2: not making the money, so very very challenging, and of

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Speaker 2: course that's why we're having these conversations with both central

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Speaker 2: and local government just to see how we can retain

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Speaker 2: some of these really key services.

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Speaker 1: Yeah, is anybody actually wanting to help you out?

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Speaker 2: Well, I think I think they do. I think they do,

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Speaker 2: but it's just a mechanism for how you do that

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Speaker 2: because it really just doesn't exist in the zones at

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Speaker 2: the moment. So a lot of the conversations really are

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Speaker 2: around you know, what would be the best mechanism to

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Speaker 2: ensure that we can at least maintain what we have

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Speaker 2: and then you know, develop something further which enables it

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Speaker 2: to actually grow. So I think, you know, in the

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Speaker 2: last probably eighteen months, there's been some really positive conversations.

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Speaker 2: I think that having someone like Minister Meaga coming into

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Speaker 2: the role has been really quite good because he understands it.

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Speaker 2: He comes from Timuru, you know, he's seen the impact

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Speaker 2: of some of these regional connectivity issues, so he can

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Speaker 2: sort of really speak from the heart in terms of

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Speaker 2: what he thinks needs to happen and really drive his

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Speaker 2: ministry to work on that. So, you know, I've got

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Speaker 2: some optimism, but you know, something really does need to change,

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Speaker 2: and I think there really needs to be a bit

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Speaker 2: of a circuit breaker to say, hey, let's help these

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Speaker 2: guys out now while we work out this longer term picture.

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Speaker 1: Be honest with me, Right, everybody loves to have a

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Speaker 1: crack at air in New Zealand, but is there anything

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Speaker 1: we can actually do? I mean, do you actually want

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Speaker 1: a market study? Would it actually achieve anything? Is there

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Speaker 1: anything that actually needs to change there? Or are they

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Speaker 1: just doing business like they should?

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Speaker 2: No, I don't think anything. I don't think a market

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Speaker 2: study would change anything. You know what I've read from

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Speaker 2: what he new Zion's put out in the media, also

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Speaker 2: what they said to the Select Committee recently, we totally

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Speaker 2: agree with. I mean, the cost of running smaller turbo

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Speaker 2: proper aircraft regionally is really really high and therefore their

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Speaker 2: fears need to be quite high too. So you know,

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Speaker 2: if you want to waste your time money on a

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Speaker 2: market study, fill your boots. But it's really not going

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Speaker 2: to change anything.

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Speaker 1: Yeah, Dwayne listen, beast of luck with it because I

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Speaker 1: love what you guys do. Duane m Any, Chief Commercial Officer,

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Speaker 1: Air Chathams for more from Hither Duplessye Alan Drive. Listen

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Speaker 1: live to news talks it'd be from four pm weekdays,

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