Issue 317: On a Mission

So how did it get from its near-death experience with the Ansett collapse in 2001 – a calamity that left it perilously close to collapse itself before the New Zealand government stepped in to bail it out (taking the airline back into government ownership in the process) – to today? To an award-winning airline admired around the world, one that is investing in new aircraft (its first 787 is due for delivery in July and A320neos are now on order), is innovating in new product (‘cuddle class’ Skycouches), and is so masterful in its branding (what other company could so successfully and cohesively co-opt The Hobbit/Lord of the Rings movies, Golden Girl Betty White, Bear Grylls and the All Blacks into its marketing?).

Perhaps a page on the airline’s own website, discussing its recent award successes, puts it best: “Our journey has been extraordinary, adapting to the tumultuous global economic and market changes has been huge and a difficult challenge, one we rise to. For the Kiwi company at the bottom of the world, winning [Air Transport World’s] “Airline of the Year” (a global award and now a two-time winner of this award), exemplifies how inspired management, innovative leadership and team spirit can overcome hurdles and be a leader in the aviation industry on a world platform.

“While our competition cut back, we introduced innovative services and in-flight products that helped grow customer loyalty and set the standards for aircraft, environment and operational performance. We built a reputation of trust and outstanding customer service, reflected by our people throughout the business. ” Even allowing for the inevitable marketing hyperbole (even if in a more typically understated Kiwi style) those paragraphs contain a number of insights. But perhaps none more-so than the comment about “inspired management [and] innovative leadership”.

Few would argue that in the past decade the airline has been very well led, from Sir Ralph Norris to Rob Fyfe and now Christopher Luxon. And

But the Kiwi flag carrier also stands out in areas not so easily measured.

a fascinating common thread between the three is that they all came to Air New Zealand from outside the airline world.

In this issue we interview Christopher Luxon and he speaks about the ‘provocations’ all three have brought to the company – in effect using their varied successful corporate experiences to question orthodoxies and change process and practices. (He is also quick to acknowledge the “deep” aviation expertise within Air New Zealand as well. ) Another element is clearly successful succession planning and internal leadership development, and a corporate culture that values and rewards its employees.

All that leaves Air New Zealand in a position that, Luxon says, is “positively charged”.

Said Luxon in the interview: “We’re getting scale benefits, lowering our unit costs, expanding the profits and ploughing that straight back into the business, keeping that virtuous circle very positively charged.

“When it’s negatively charged, you say, oh, it was declining, the costs are going up with inflation, your profits are falling away. You can’t invest back in your business, you diminish the customer proposition, your staff get very frustrated, you don’t convert commercially and the whole circle starts again. And so, for us, that’s been very important. ” And not for Air NZ the excuse of uncontrollable events impacting on profitability, or using geography as an excuse for poor performance – see his “dog ate my homework” comments in Preflight this issue.

Instead, “We want to be in control of our future, happening to it and not have it happening to us. ” So far, at least. Air New Zealand has certainly been creating its own destiny.