Latest / Best of Business / Greg Foran: outgoing Air NZ CEO on the airline's profits dropping

Transcript

Greg Foran: outgoing Air NZ CEO on the airline's profits dropping · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from news Talk zed be
• 0:12
  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: A greeg Foreun has delivered his final profit as the
• 0:19
  Speaker 2: boss of Air New Zealand before he leaves in a
• 0:21
  Speaker 2: couple of months time. The airline offered him an extra
• 0:23
  Speaker 2: nine hundred thousand dollars to stay on, but he decided
• 0:26
  Speaker 2: to leave anyway. In New Zealand made an annual net
• 0:29
  Speaker 2: profit after tacks of one hundred and twenty six million dollars.
• 0:31
  Speaker 2: That is down fourteen percent on the year before. And
• 0:33
  Speaker 2: Gregor is with us.
• 0:34
  Speaker 3: Hello Greg Hi there, how are you?
• 0:35
  Speaker 2: I'm well? Thank you your final result?
• 0:37
  Speaker 3: But as sweet yes it is. You know, I've been
• 0:41
  Speaker 3: almost six years at the airline and been incredibly enjoyable.
• 0:45
  Speaker 3: So bit sad leaving a number of people in a
• 0:48
  Speaker 3: few weeks time, but also excited for Nickel and his
• 0:52
  Speaker 3: opportunity and also for the rest of the team.
• 0:56
  Speaker 2: Yeah do you. I mean it's been a tough industry
• 0:58
  Speaker 2: to be in the last few years. Probably couldn't have
• 1:01
  Speaker 2: been worse. Are you happy to put it behind you?
• 1:05
  Speaker 2: Do you know?
• 1:05
  Speaker 3: As you reflect on these things, you always more when
• 1:08
  Speaker 3: it's hard than when things are easy. So I do
• 1:11
  Speaker 3: actually appreciate the fact that it has been difficult. And
• 1:15
  Speaker 3: you know, whether it was starting when COVID began and
• 1:18
  Speaker 3: doing capital raises and then hurriedly having to restart the
• 1:23
  Speaker 3: business and sort of a parade of engine challenges, and
• 1:27
  Speaker 3: now we've got a few other headwinds. But you learn,
• 1:30
  Speaker 3: and I would say to you that I'm proud of
• 1:33
  Speaker 3: what we've done and what we're doing and the way
• 1:35
  Speaker 3: we're setting ourselves up.
• 1:36
  Speaker 2: So why are you leaving?
• 1:38
  Speaker 3: Well, I've got another, you know, itch that I need
• 1:41
  Speaker 3: to scratch in terms of what I want to do,
• 1:43
  Speaker 3: and I can't share anything about that at this stage.
• 1:47
  Speaker 2: So there is something here. It's not just lying in
• 1:49
  Speaker 2: the sun.
• 1:50
  Speaker 3: No. And secondly, if you've got succession in place at
• 1:56
  Speaker 3: a point in time, you need to let people get
• 1:58
  Speaker 3: on and do that because otherwise you stand the risk
• 2:01
  Speaker 3: of losing them.
• 2:01
  Speaker 2: Can you at least tell us if your etches locally
• 2:03
  Speaker 2: or overseas?
• 2:04
  Speaker 3: I can't at this stage.
• 2:06
  Speaker 2: I'm sorry you heard the rumors.
• 2:07
  Speaker 3: I've not heard any room are too busy.
• 2:11
  Speaker 2: The rumors either that you're the new Rugby boss.
• 2:15
  Speaker 3: I've not heard that rumor and as I said.
• 2:17
  Speaker 2: So we can scratch that one off, can we?
• 2:19
  Speaker 3: I have no knowledge of anything now.
• 2:22
  Speaker 2: Listen, profit down this year, profit down last year. When
• 2:24
  Speaker 2: does it turn around? Do you think?
• 2:27
  Speaker 3: I think we're in for another challenging year this year,
• 2:29
  Speaker 3: to be honest, so perhaps a year after. But it's
• 2:33
  Speaker 3: going to be tough this year.
• 2:34
  Speaker 1: Is it?
• 2:34
  Speaker 2: The difference?
• 2:35
  Speaker 3: Different set of circumstances. We're still dealing with engines. We
• 2:38
  Speaker 3: don't expect any significant improvement there, and we've said, you know, look,
• 2:43
  Speaker 3: we came in at one hundred and eighty nine pre tax.
• 2:46
  Speaker 3: We would have done another one hundred and sixty five
• 2:48
  Speaker 3: million on top of that if we could have flown
• 2:50
  Speaker 3: what we wanted to. We ended up flying less than
• 2:54
  Speaker 3: what we did the previous year, which is never what
• 2:56
  Speaker 3: you want to do, but that's what happens. The economy
• 3:00
  Speaker 3: is still pretty tough out there domestically, and you know that,
• 3:03
  Speaker 3: and your listeners know it, our customers know it. So
• 3:08
  Speaker 3: we're dealing with that, and we're seeing that with sort
• 3:10
  Speaker 3: of less government spend, less corporate spend, and even leisure
• 3:13
  Speaker 3: travel domestically is still pretty tough. But the other thing
• 3:17
  Speaker 3: that we're leaning into is we get a fair amount
• 3:20
  Speaker 3: of inflation coming our way, and inflation that you would
• 3:24
  Speaker 3: expect on things like spare parts comes our way, and
• 3:26
  Speaker 3: it's been forty percent over the last five years, but
• 3:29
  Speaker 3: it's ten percent again on top of that this year.
• 3:33
  Speaker 3: But then we're seeing other services that we get and
• 3:35
  Speaker 3: that could be CIA airways, airports. If I just took
• 3:40
  Speaker 3: those three that the airports, the CIA, av SEC and airways,
• 3:46
  Speaker 3: that's laid in eighty four million dollars worth of cost
• 3:49
  Speaker 3: for us just this year. So we're going to work
• 3:51
  Speaker 3: out how to become more efficient. We're doing some of that,
• 3:54
  Speaker 3: lots of things that I could talk about, but as
• 3:57
  Speaker 3: well as that, we absorb a bit and you can
• 3:59
  Speaker 3: see that in the profit result. And then of course
• 4:02
  Speaker 3: you do have to pass some on.
• 4:03
  Speaker 4: Yeah, so do you have I mean, as a guy
• 4:08
  Speaker 4: leave and leaving an industry where it is really tough
• 4:11
  Speaker 4: to the point that we have regional airlines asking for help,
• 4:14
  Speaker 4: what would be your advice to the government to help them?
• 4:18
  Speaker 3: Well, I would look a field and say what do
• 4:21
  Speaker 3: you see happening elsewhere? And you know, if I look
• 4:25
  Speaker 3: at Australia twenty seven twenty eight million people, two airlines
• 4:31
  Speaker 3: and they struggle to make a regional airline work. Example Rex,
• 4:38
  Speaker 3: so I think Rex recently got about a fifty million
• 4:41
  Speaker 3: dollar bailout by the Australian government in order to keep
• 4:44
  Speaker 3: flying two locations. Similar sorts of things happen in the US.
• 4:50
  Speaker 3: If I look in places like Finland and Sweden, I
• 4:53
  Speaker 3: see that happening. If we want airlines to operate in
• 4:58
  Speaker 3: really remote locations, they're going to need a hand. And
• 5:02
  Speaker 3: that hand could come by having a look at the
• 5:05
  Speaker 3: total ecosystem and saying how do we deal with all
• 5:10
  Speaker 3: the costs that are in that ecosystem, and or it
• 5:14
  Speaker 3: could be some type of financial assistance. It's tough running
• 5:19
  Speaker 3: an airline, you know, they are really capital intensive. We've
• 5:23
  Speaker 3: made this year two cents and a dollar, and I'm
• 5:27
  Speaker 3: actually proud of the result. We had to work really
• 5:30
  Speaker 3: hard to do that. We've tried to keep fears reasonable
• 5:33
  Speaker 3: and at the end of the day, two cents in
• 5:34
  Speaker 3: the dollar and we've still got to buy new planes.
• 5:39
  Speaker 3: You know, I've got two new Boeings coming in the
• 5:41
  Speaker 3: beginning of next year. You don't get much change out
• 5:44
  Speaker 3: of two hundred million dollars for each plane.
• 5:46
  Speaker 2: Well, I'll tell you what if I was you, I'd
• 5:47
  Speaker 2: be very happy to leave two cents and a dollar
• 5:49
  Speaker 2: behind and go to greener pastures. Tell me, if you're
• 5:52
  Speaker 2: not going to tell us what you're doing, are you
• 5:54
  Speaker 2: at least going to get a break before you do it?
• 5:56
  Speaker 3: Look, that will depend on what I end up doing,
• 5:59
  Speaker 3: and I haven't decided yet. So maybe my wife loves me,
• 6:04
  Speaker 3: but she also loves me outworking.
• 6:08
  Speaker 1: Wife.
• 6:08
  Speaker 3: Greeg.
• 6:08
  Speaker 2: Thank you very much, Greek for in New Zealand's chief executive.
• 6:12
  Speaker 1: For more from News Talk set B listen live on
• 6:15
  Speaker 1: air or online, and keep our shows with you wherever
• 6:18
  Speaker 1: you go with our podcasts on iHeartRadio