Sharechat Logo

KiwiRail to shutter Coastal Pacific service during winter months to stem losses

Tuesday 2nd April 2013

Text too small?

KiwiRail, the state-owned railway, will close its Coastal Pacific train service between Picton and Christchurch for the winter months to stem losses running at $3 million a year.

The tourist train needs to sell 130 seats to breakeven though last winter some services carried just 30, said Deborah Hume, general manager, passenger, in a statement.

The losses reflect "a significant drop in the tourism and domestic travel market to and from Christchurch after the earthquake," she said. "These losses are highest through winter."

The decline in patronage is more pronounced than for the TranzAlpine service, which links Christchurch with the West Coast and takes tourists through the Southern Alps. The railway has tried to arrest the decline with packages such as Whale Watch and wine tasting and had hiked fares by about 20 percent.

The government took a $1.4 billion impairment charge on the rail network last year after revaluing the assets and splitting the underlying land from the rolling stock. While operating earnings at KiwiRail rose in the first half, driven by the freight business, it took a charge of $189.9 million, relating to the restructuring of the company, resulting in a net loss of $75.9 million.

The railway is exiting unprofitable businesses including its Hillside workshops in Dunedin, and wants to scrap the Napier to Gisborne line, which has suffered expensive storm damage.

(BusinessDesk)

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar becalmed on US-China trade/politics nexus
Govt to pull Infrastructure Commission into Auckland port imbroglio
Wind to displace diesel for Stewart Island power
Eroad's five year target: doubling unit sales
Blinky boxes and gobbledegook: tips for choosing a cyber-security vendor
Govt support for NZME/Stuff merger difficult, not impossible, says Jarden
NZ dollar stalled; US-China trade signals remain mixed
Ryman warns NZ, Australia to take population ageing more seriously
MARKET CLOSE: NZ shares fall as US-China trade concerns weigh on markets; Ryman slips
NZ dollar stalled; US-China trade deal may be postponed

IRG See IRG research reports