A major change will soon take place in New Zealand’s express freight business. Express courier Freightways Limited, through its Fieldair Holdings subsidiary, plans to form a new joint venture with aviation firm Airwork Holdings. As part of the deal, Freightways will replace its five aging Convair CV580 freighters with three of Airwork’s 737-400 freighters, providing additional cargo space that may be open for use by the country’s freight forwarders.
The 737-400Fs, which the JV will lease from Airwork, will carry express packages for Freightway and for its main customer, New Zealands Post’s Express Couriers. With a cargo capacity of about 17,000 kg each, the three 737s will provide a combined 51,000 kg of lift, or about 36 percent more capacity than the five Convair planes, combined (32,500 kg). If there is sufficient demand, Freightways said any remaining space may be made available for other freight operators.
The JV will ferry cargo and parcels between Auckland, Palmerston North and Christchurch. Dean Bracewell, the managing director of Freightways, said the increase in express package volume was the motivation for more carrying capacity. The Convair fleet and related spare parts have been written down by US$7.6 million, which, he said, reflects the value of the fleet at the current U.S. dollar rate. The write-down will not impact dividends paid to Freightways’ stock holders. The National Business Review reported that the five Convair aircraft will be put on the market for sale.
Freightways will incur $1.7 million in capital expenditures and $1.35 million in transition costs to switch to the new venture, said to boost capacity while reducing carbon emissions. In early June, Airwork extended its contract with Toll Holdings’ airfreight express business until 2022 and will replace two aircraft.
Freightways dates back to 1964, through New Zealand Couriers, a pioneer in the express package industry. Airwork was founded in 1936 and is one of the oldest aviation businesses in New Zealand. Airworks also recently purchased a number of 737 aircraft for conversion from passenger to freighter configuration.