Air NZ feedback for new boss
Most Kiwis will have an opinion on how Air New Zealand could be a better airline. That comes with the territory of being a brand that has such a big impact on the day-today lives of New Zealanders and plays an important role in defining who we are to the world.
Some know and understand Air New Zealand better than others, and that is why last week incoming chief executive New Zealand-born Greg Foran asked airline staff for advice on how the airline could improve.
Foran, who takes up his new role on February 3, will use the feedback to help develop a new strategic plan for the airline.
Here is the advice five experts, who know the airline and the industry better than most, had to share.
The analyst
UBS head of research and long-time aviation analyst Marcus Curley said that without having a background in aviation, Foran was playing a smart hand by canvassing feedback from airline staff.
Curley said Air New Zealand needed to focus on profit improvement within its international business.
‘‘Our analysis would suggest that the domestic business already makes leading margins,’’ Curley said.
Air New Zealand had already removed the Los Angeles-london service from its international network and there would likely need to be a broader review of all its international routes, he said.
‘‘Maybe out of that there is going to be further reshuffling of capacity.’’
From a service perspective there should be a focus on its domestic routes to ensure that New Zealand travellers were treated even better than what they were at the moment.
Addressing hidden costs and disruptions arising from the Rollsroyce 787-9 engine issues, and getting its fleet back to normal operations, should be another key focus for Foran, Curley said.
There should also be a review of the airline’s new long-haul cabin product, which was currently being redesigned, to ensure it was fit for purpose, he said.
The politician
Minister for Regional Economic Development Shane Jones has been Air New Zealand’s most vocal critic in recent years. His key message to Foran was to give the regions a fair go. ‘‘Prices are extortionate,’’ Jones said.
‘‘The scheduling and pricing is causing disproportionate gouging in the regions.’’
The Government is a majority shareholder in Air New Zealand, with 53 per cent ownership, and has some clout when it comes to keeping the airline honest.
‘‘Our focus will remain unstintingly on good deals for regional New Zealand.’’
Jones said the Air New Zealand chief executive role was not one for ‘‘show ponies’’.
‘‘We just want people who understand the challenges of delivering quality service on a regular basis.’’
Foran should ensure that provincial New Zealanders in particular were able to travel in an affordable fashion, he said.
‘‘At the moment that is not a reality for the majority of them.’’
The frequent flyer
David Maxwell is the founder of luxury travel business Eighth Wonder and does a lot of travelling with Air New Zealand in both a professional and personal capacity.
In general, Air New Zealand’s service and reliability was very consistent, he said.
But one area where it was not consistent was its pricing, especially for last-minute bookings, he said.
‘‘That is just the nature of the industry these days but that does not make it right,’’ Maxwell said.
Frequent flyers in particular should be rewarded with more fair pricing, he said.
Another area where Air New Zealand could make big improvements was on reducing waste, he said.
‘‘I feel they are behind the times in terms of single-use packaging.’’
Passengers were often served cookies wrapped in plastic, which seemed wasteful, he said.
‘‘If you want to hand out cookies, just have a big jar of them and hand them out with tongs.
‘‘They are just passing on that convenience cost to the environment and not owning it themselves.’’
Maxwell said he would also like to see greater improvements to Koru lounges.
He used to be a Koru Club member but no longer subscribed because ‘‘it just started becoming a joke’’.
The lounges had become too crowded and noisy and the food was not of a high enough quality, he said.
Business travellers in particular wanted somewhere quiet where they could access water, some healthy food and somewhere to work and relax. ‘‘Travelling is already hard enough on the body.
‘‘That buffet idea just means over indulgence.’’
The consultant
Aviation consultant and former Air New Zealand executive Irene King said Foran should try to make headway towards allowing Air New Zealand to depreciate its aircraft faster.
This was an accounting method used by Singapore Airlines and allowed for faster fleet renewal which resulted in more modern, fuelefficient aircraft being added to a fleet, she said.
‘‘Singapore Airlines can write off a brand new 777 in four years.
‘‘Under our regime it takes about 15 to 20 years.’’
Faster fleet renewal created an improved and more affordable customer experience and would make Air New Zealand more competitive internationally, she said.
‘‘It has such a significant impact on pricing.
‘‘It actually does change the competitive dynamics.’’
Airfares could potentially be hundreds of dollars cheaper when aircraft were depreciated faster, she said.
‘‘You are talking significant changes in competitive advantage.’’
However, it would be no mean feat and would require some major changes at a regulatory level that would need to be approved by Treasury and be ring-fenced to aircraft, she said.
If it did happen, it would benefit not just Air New Zealand but all aircraft operators in New Zealand, she said.
The travel agent
House of Travel commercial director Brent Thomas said the main thing he wanted to see from Foran and Air New Zealand was to ensure it continued to operate quality aircraft.
Modern aircraft gave the airline greater fuel efficiency as well as a competitive advantage in customer experience.
‘‘Customers are prepared to pay a premium to a degree for that quality of service that Air New Zealand has provided,’’ Thomas said.
‘‘That requires a lot of investment.’’
Air New Zealand also needed to ensure that it was a market leader in moving towards more sustainable practices, he said.
That included looking at alternative fuel sources more closely and the prospect of electric aircraft, he said.
One of the things customers frequently brought up was the need for improvements to Koru lounges, which required ongoing investment, Thomas said.
Air New Zealand has been undertaking a Koru lounge upgrade programme but is still negotiating how to deliver further improvements to its international lounge at Auckland Airport.
‘‘That is something that we would want them to continue to focus on.’’
‘‘Prices are extortionate. The scheduling and pricing is causing disproportionate gouging in the regions.’’ Shane Jones Minister for Regional Economic Development