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Irene King: aviation commentator on Air New Zealand lifting fares in response to Middle East conflict · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks'd be follow
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  Speaker 1: this and our wide range of podcasts now on iheartradiogether
• 0:17
  Speaker 1: due to see us for reminder.
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  Speaker 2: Of course, Chris Hopkins is with us. After half past five,
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  Speaker 2: Now the inevitable has happened in New Zealand has suspended
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  Speaker 2: its previous earnings guidance and up to fair prices because
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  Speaker 2: of the Iran Wars impact on the oil price in
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  Speaker 2: New Zealand was already facing a second half loss of
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  Speaker 2: around fifty nine million dollars. But of course it's going
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  Speaker 2: to get worse. Aviation commentator Irene King is with us now,
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  Speaker 2: high Irene hi there, So how much worse do you
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  Speaker 2: think it will get?
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  Speaker 3: Wow? You know it's hard to say. Some of the
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  Speaker 3: financial commentators were saying the loss is going to be
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  Speaker 3: twice the level and that was their comment before the
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  Speaker 3: seal price really spiked. So you know, it's does not
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  Speaker 3: looking good. Now they do have some time to take
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  Speaker 3: some remediate action. So that's a positive.
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  Speaker 2: Yeah, but what action can they take?
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  Speaker 3: Oh, look, they've got a lot of costs that though
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  Speaker 3: they can pull out of this business, they really have
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  Speaker 3: never addressed the cost side of their business since post COVID,
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  Speaker 3: and they really could get stuck in there in Their
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  Speaker 3: labor costs are astronomical.
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  Speaker 2: So fire people. Is that the only way they can
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  Speaker 2: save money?
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  Speaker 3: Well, that's one of the variable costs. The other one
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  Speaker 3: is sort of looking at their whole procurement strategies, what
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  Speaker 3: they're buying, why they're buying it, how much of things
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  Speaker 3: are buying, you know, are they buying them sensibly? There's
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  Speaker 3: you know, there's some big cost drivers and that whole
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  Speaker 3: engineering procurement area that again haven't been fundamentally touched. So
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  Speaker 3: I'm sure they're getting on top of it. They're moving now,
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  Speaker 3: but g was pretty late in the day too.
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  Speaker 2: Right now, they popped up the fares already. Domestics gone
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  Speaker 2: up by ten dollars, short haul by twenty dollars, long
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  Speaker 2: haul by ninety dollars. Do you think that's the end
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  Speaker 2: of it?
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  Speaker 3: Probably not. You know, when you start to think about
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  Speaker 3: how this is going to shake down, you know, it
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  Speaker 3: comes down to really how much you and I are
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  Speaker 3: prepared to pay. And you know, in the past, I've
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  Speaker 3: always put it in as a levy and could whip
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  Speaker 3: it off quite quickly. But if they've built it into
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  Speaker 3: to base sears. You know they're going to get the
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  Speaker 3: course of customer complaints that I've always had. Competitive.
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  Speaker 2: Yeah, Irene, thank you very much to appreciate your time.
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  Speaker 2: As always, that's Irene King, avigation industry commentator.
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