Latest / Best of Business / Jeremy O'Brien: Air New Zealand's Chief customer and digital officer blames accelerated inflation for increase in prices

Transcript

Jeremy O'Brien: Air New Zealand's Chief customer and digital officer blames accelerated inflation for increase in prices · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News talks'd be follow
• 0:12
  Speaker 1: this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: You think you're paying a lot for airfares, you are right.
• 0:19
  Speaker 2: New report out this morning. This is from the Airport
• 0:21
  Speaker 2: Council International the ACI. And then that's a bit of
• 0:24
  Speaker 2: a story. I suspect sixty three percent increase in this
• 0:26
  Speaker 2: country domestically since twenty nineteen an airline tickets one of
• 0:29
  Speaker 2: the highest in the world, Malaysia's fifty three, Vietnams fifty two.
• 0:33
  Speaker 2: It's inflationary pressures, they claim, not airport charges. Now. Jeremy
• 0:37
  Speaker 2: O'Brien's the New Zealand Chief Customer and Digital Officer and
• 0:40
  Speaker 2: as well as Jeremy, good morning, good morning, my pay
• 0:43
  Speaker 2: Dane very well. Indeed, So how many facts are we
• 0:45
  Speaker 2: dealing with here versus how much politics is at play?
• 0:49
  Speaker 3: Yeah, Look, so I can only really speak to the
• 0:51
  Speaker 3: data that we've got and you know how to show
• 0:54
  Speaker 3: us that over that period as at thirty five percent,
• 0:58
  Speaker 3: and we understand that that's a big increase. But you
• 1:01
  Speaker 3: know the reason for that is that costs are up
• 1:03
  Speaker 3: by out of forty percent, and so we haven't passed
• 1:05
  Speaker 3: that cost on to the consumer. But is it a
• 1:08
  Speaker 3: you know, high high cost market that is exagerating at
• 1:12
  Speaker 3: the moment.
• 1:13
  Speaker 2: Do you get where they get their sixty three from.
• 1:16
  Speaker 3: Look, no, I don't really get where they get the
• 1:18
  Speaker 3: sixty three from. I look at their data and air
• 1:20
  Speaker 3: facts that you know we report regularly, and so you
• 1:24
  Speaker 3: know we're very confident in their sacks base and that
• 1:27
  Speaker 3: that base tells us the spears are up thirty five
• 1:30
  Speaker 3: percent in our costs are up over forty cents.
• 1:32
  Speaker 2: Now the marginal role of airport charges would you call
• 1:35
  Speaker 2: them marginal?
• 1:38
  Speaker 3: Well, look if I give you an example before, you know,
• 1:41
  Speaker 3: if you take it one way flight from Aubland to Wellington,
• 1:43
  Speaker 3: we now pay sixty dollars sixty two fees before that
• 1:46
  Speaker 3: aircraft that even miss the ground. So you know that's
• 1:49
  Speaker 3: a pretty big proportion of your costs. And if I
• 1:52
  Speaker 3: look at them and charges and packs levies over automatically,
• 1:55
  Speaker 3: they're up forty three percent in twenty nineteen and in
• 1:58
  Speaker 3: FY tweety six we expect they're going to be up
• 2:00
  Speaker 3: to six seventy six aercent. So I wouldn't say that
• 2:02
  Speaker 3: that's a small amount.
• 2:04
  Speaker 2: In the report they talk of the so called single
• 2:06
  Speaker 2: till deals places like India and China where airports are regulating,
• 2:09
  Speaker 2: controlled by the government. Stuff. Is there anything in that?
• 2:11
  Speaker 2: I mean, are we just a completely different model and
• 2:13
  Speaker 2: it's pointless looking at it.
• 2:15
  Speaker 3: Look, I think it is a different model, and you
• 2:18
  Speaker 3: know that is the model we're operating within within the market.
• 2:20
  Speaker 3: So you know, we have to run with the model
• 2:23
  Speaker 3: that accepted in this market and that's what we try
• 2:26
  Speaker 3: to manage.
• 2:26
  Speaker 2: So where are we at with the airports? I mean
• 2:28
  Speaker 2: the ComCom I personally was surprised the other day when
• 2:30
  Speaker 2: they decided they didn't need to look at airports. I mean,
• 2:32
  Speaker 2: I would have thought the airports need looking at what's
• 2:34
  Speaker 2: your view?
• 2:36
  Speaker 1: Look?
• 2:37
  Speaker 3: I mean, as you is, we look at we need
• 2:39
  Speaker 3: to look at the whole aviation sector. The reality is
• 2:42
  Speaker 3: we've seen significant cost inflation in our domestic environments that
• 2:47
  Speaker 3: we're operating within. There's quite a lot of capital going
• 2:51
  Speaker 3: to airports around the country, and the reality is we
• 2:55
  Speaker 3: are a reasonably small country with long distances supply and
• 2:59
  Speaker 3: air position would be that in many cases we think
• 3:01
  Speaker 3: we're over capitalizing and that it's going to impact the
• 3:04
  Speaker 3: long term sustainability and affordability of the market here in New.
• 3:07
  Speaker 2: Zealand, doesn't she engen you think for the punter though,
• 3:09
  Speaker 2: is I mean, the price is the price, and we
• 3:10
  Speaker 2: hate the price, don't we.
• 3:13
  Speaker 3: Yeah, Looking you know, I don't like the fact that
• 3:15
  Speaker 3: we're having to pay for exempt more in costs either,
• 3:18
  Speaker 3: but it is the reality of what we're facing from
• 3:20
  Speaker 3: that cost environment perspective, and I think you know, all
• 3:23
  Speaker 3: of us are from a New Zealand thing perspective. I
• 3:26
  Speaker 3: would like it to not be as high inflation as
• 3:29
  Speaker 3: it is, but the aviation spector at the moment he
• 3:32
  Speaker 3: domestically is facing significant exhilaration in cost Good.
• 3:36
  Speaker 2: On, Jeremy, appreciate it. Jeremy I Brian in New Zealand,
• 3:38
  Speaker 2: Chief Customer and Digital Officer. Never the Twain shall meet,
• 3:40
  Speaker 2: of course.
• 3:41
  Speaker 1: For more from News Talk st B, listen live on
• 3:44
  Speaker 1: air or online, and keep our shows with you wherever
• 3:47
  Speaker 1: you go with our podcast on iHeartRadio.