Contenders in line for Air NZ’s top job
Plenty of names are in the mix as Christopher Luxon’s potential successors go through the selection process
With less than two months before Christopher Luxon heads for the exit at Air New Zealand, potential replacements have been making the trek to Sydney for lengthy interviews.
International consultants Spencer Stuart near Circular Quay are leading the process, with incoming Air NZ chair Dame Therese Walsh and outgoing chair Tony Carter taking a key role in the appointment.
The airline will say only that “extremely high calibre candidates from within New Zealand and around the world with a mix of industry backgrounds have expressed an interest” in the role Luxon leaves on September 25.
That will be three months after announcing his decision to quit, although Luxon has said he will stay on if necessary to help with the transition until the end of the year.
Luxon didn’t have a fixed-term contract and the timing of his resignation, probably to seek a move into politics, was a surprise around Air New Zealand.
Like Rob Fyfe before him, Luxon was clearly brought into the airline with a clear succession to the top job in mind. He ran the international airline for about 18 months. Fyfe was brought on board initially as chief information officer, then a number of other roles before succeeding Ralph Norris in 2005.
But recent appointments to the airline’s 10-member executive don’t mirror that succession pattern.
They included Cam Wallace, the airline’s chief revenue officer who has 18 years’ experience across several parts of Air NZ and has been integral in the increasingly important alliances with Singapore Airlines and United Airlines.
Chief ground operations officer Carrie Hurihanganui has also had 18 years at Air New Zealand and in spite of her appointment to the executive just a year ago, has also been mentioned in aviation circles as a contender. She has wide operational experience and recently a brief stint in banking, at NAB across the Tasman.
The early thinking was that an external candidate — and not necessarily with aviation experience — was preferred, although this may be shifting as the more challenging environment Air New Zealand will face in the coming year comes into sharper focus.
The airline is still digesting the rapid growth of the past few years and is facing what is turning out to be a microscopic review of head office overhead costs by consultants.
Costs have been carved out of the business annually and the chances of finding a big pile to cut are low, so it is more of a painful process for the staff, half of whom have known only growth since the global financial crisis.
The new boss will head an executive which has imposed a pay freeze on itself, and there has been some senior level restructuring at the airline’s Fanshawe St head office. It is understood there have already been some voluntary redundancies.
And the new boss will not only start work after what will be a relatively disappointing full-year result — due to be delivered in August — but also at a time when the airline is being urged by a senior ad industry boss to have a close look at reshaping its image, which they say is built on past glory.
Speaking under condition of anonymity, the exec told the Herald that he still walks into meetings and hears from clients who want to be “like Air New Zealand”.
Much of this appeal has been built on the back of its marketing machine, particularly its world-renowned safety videos.
The reality, the executive says, is that it has been a very long time since Air New Zealand has done anything that has surprised consumers.
“You can only do so many safety videos before they become just another safety video with a shelf life of maybe one or two views. Great brands aren’t built on doing different variations of the same thing over and over again.”
Among those from outside the airline being discussed is former Spark boss Simon Moutter, who has been a champion of “NZ Inc”, had exposure to airlines while boss of Auckland Airport for four years and hasn’t ruled himself out of the running for the Air NZ job.
TVNZ boss Kevin Kenrick is another name from outside the airline industry who is said to be keen on the role. He has exposure to the travel industry after heading House of Travel but more importantly has a track record of commercial success at the television company in a tough advertising market and also a focus on developing a strong “people culture”.
Importantly, he also works closely with Walsh, who is also chair of TVNZ and is expected to take a more handson approach when she takes over the chair of the Air NZ board, also on September 25.
If the airline goes outside the existing organisation and outside the country, there are a number of alumni who have gone overseas to big airline jobs and could also be in the mix. That’s if they want to return. Air New Zealand is a big fish here, but in size it ranks about 98 out of 200 airlines globally.
Another to leave to a bigger job under Luxon was strategy and alliances boss Stephen Jones, who has been tipped in Australian media as a possible successor.
He went to low cost carrier Wizz, which has grown out of Hungary to challenge the established budget giants around Europe. He’s now No. 2 in the airline, which in the past year carried 35 million passengers, up 17 per cent on the year before.
Andrew David, chief executive of Qantas domestic and freight, spent 13 years at Air NZ and during the past five years at the Australian airline he has built an impressive CV.
Ed Sims led the international airline at Air NZ for 10 years before a move to Airways and then to young and fast-growing Canadian airline WestJet, where he was quickly promoted to president and CEO.
That airline is tangling with digesting rapid growth, experience that would be useful at Air New Zealand.
A longer shot would be former Hawaiian Airlines boss Mark Dunkerley, who was apparently a strong contender for the Virgin Australia job earlier this year. He’s a big fan of this country and his job turning around Hawaiian was widely recognised.
Luxon started in 2013 on about $1.5 million in remuneration and by the last year that had grown to $4.2 million. That’s well below the pay at bigger, but in many cases more poorly-performing airlines overseas.
Besides the incoming and outgoing chairs, the airline’s remuneration committee has a clear role in the appointment process.
Jonathan Mason chairs the committee of Tony Carter, Jan Dawson and Sir John Key.
This committee’s charter states that it participates in annual succession planning reviews and selection processes “as required from time to time” for the chief executive or their direct reports.
One Auckland-based remuneration and performance specialist, John McGill, says members of the remuneration committee would be very important.
He says Spencer Stuart would whittle down the field to about three or four leading contenders for a round of several interviews. They would also have a good idea of what top airline talent was in the market and make their own suggestions to Air New Zealand directors.
An external appointment would likely mean a notice period would have to be worked out at the former airline. This could mean an acting chief executive, most likely chief financial officer Jeff Macdowall, a role his predecessor Rob McDonald filled at times.
McGill says the board would lean towards appointing a Kiwi but wouldn’t rule out an international candidate. (It didn’t work well for the last non-local in the top job — Australian Gary Toomey was in charge as the airline all but collapsed around him in 2001).
The airline is 52 per cent owned by the taxpayer, with Finance Minister Grant Robertson the shareholding minister. He’s staying quiet: “The appointment of the new Air NZ chief executive is a matter for the board.”
Luxon, speaking the day after announcing his resignation — and at pains to stress that he has no say on who succeeds him — spelled out some ideal attributes.
“My personal view is a New Zealander is incredibly helpful because they realise how important this company is to the public. It’s a rather unique circumstance because there is no other company like this,” said Luxon.
He’s been a big supporter of promoting women in the airline and says a female chief executive is a possibility.
“There’s no reason why we can’t make a female appointment — I don’t see that as being a barrier at all.”