What Origin Pacific lacked

It has been said 'The best way to make a small fortune in aviation is to start with a huge one'. I am sure that Mike Pero might have personally learnt this lesson after sinking $10 million into Origin Pacific. The full-blown disintegration of Origin Pacific last week, confirmed New Zealand’s domestic aviation market has become fully mature.

No one, other than a huge multi-national, has the resources to compete with Air NZ. They, along with Qantas who choose not to do regional, are the Super Powers [see previous post] in the domestic market and there is simply no room for ‘secondary [ugly] powers’, like Origin.  In the ‘business guerrillas’ camp we have small niche operators like Air2there, Sunair and Sounds Air. Each has very niche markets that Air NZ simply doesn’t care about or is too small to enter.

BIG question – Can you become BIG without directly competing with the Super Powers?

Short answer – No!; but the road of business is littered with companies that tried.

There is a place for specialists with a niche market, but ultimately they have to be prepared to stay as “guerillas”.

If you are not happy being a guerilla, then sooner or later you are going end up in the middle ground. To stay there and grow to be BIG, you will have to take it to the Super Powers. Once you reach the never never land of the Secondary Powers, you now must compete in price, service and features. If you can’t compete in that position for a prolonged period of time and if you can’t continue to grow month on month, you are near stuffed!

Now here’s the challenge if you want to be big, somehow you need to grow and yet maintain the nature of guerilla warfare. Making very strategic decisions about the markets, even specific customers you want, the service you will offer and the prices you will charge. If you can continually move the battle front, the Super Powers will struggle to fully understand what you are up to. They will respond with a defense that is already irrelevant as you have move to the next battle field and target.

In my opinion Origin was doomed to failure before their first flight left the ground. They tried to behave and act like super powers, then align themselves with super powers like Qantas, rather than establishing profitable niche markets and attacking and growing through guerrilla warfare.

Agree, disagree, have a question? – Post a comment now.