Latest / Best of Business / Greg Foran: Air New Zealand chief executive defends airline from criticism by Auckland Airport

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Greg Foran: Air New Zealand chief executive defends airline from criticism by Auckland Airport · Best of Business

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  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.
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  Speaker 2: Ryan Bridge Jernie Zealand's half year result out net profit
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  Speaker 2: one hundred and six million dollars. That is down eighteen
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  Speaker 2: percent on the same period last year. Engine issues. The
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  Speaker 2: big problem for them, Greg four and is the chief
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  Speaker 2: executive high?
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  Speaker 3: Greg, Hi there, how are you run? Good?
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  Speaker 2: Thank you? How much worse? So obviously this is not
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  Speaker 2: great for you? How much worse will it get in
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  Speaker 2: the second half? Do you reckon?
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  Speaker 3: Look? Bit too early to call at this stage, but
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  Speaker 3: we have said to the market that we do expect
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  Speaker 3: it to be down on where we were in the
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  Speaker 3: first half. But I would say, actually, I think this
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  Speaker 3: is a really good result for the first half. You know,
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  Speaker 3: when you consider what we're dealing with here has been tough.
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  Speaker 3: It's a bit like you know, an All Blacks team
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  Speaker 3: operating without the front row. You know, some of these
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  Speaker 3: things are beyond our control. But I think it's been
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  Speaker 3: a good performance. We haven't buckled and I think our
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  Speaker 3: start I have really done a true terrific job holding
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  Speaker 3: this thing together.
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  Speaker 2: This is the engine issues. How many how many planes
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  Speaker 2: are you short and how much do you reckon that's
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  Speaker 2: taking off your bottom line?
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  Speaker 3: Well, we know actually that it's about one hundred and
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  Speaker 3: thirty million dollars worth a headwind in that first half,
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  Speaker 3: So you know, we calculate that we've got about ninety
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  Speaker 3: million dollars worth of compensation. So it didn't cover everything
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  Speaker 3: that we had to deal with, but it's certainly helped.
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  Speaker 3: And that's all part of the negotiation we have with
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  Speaker 3: the engine guys. We had been down about you know,
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  Speaker 3: seven to eight planes in the first half, but we're
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  Speaker 3: predicting that's actually going to be around eleven in the
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  Speaker 3: second half and then it should start to improve. And
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  Speaker 3: you know this is all due to Rolls Royce and
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  Speaker 3: Pratt and Whitney. It's a worldwide issue. It just happens
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  Speaker 3: to be that, you know, we've got two of the
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  Speaker 3: engine models that.
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  Speaker 2: Are problematic about the performance. This is your on time performance. September,
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  Speaker 2: you were at eighty point four percent for on time departures.
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  Speaker 2: Is that getting better or worse?
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  Speaker 3: It's been actually a real focus of ours. We weren't
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  Speaker 3: happy not just in September, we weren't particularly happy in
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  Speaker 3: November and December and neither were our customers, and I
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  Speaker 3: apologize for that, but I can tell you we have
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  Speaker 3: really nailed our performance since the beginning of the year
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  Speaker 3: and on time performance has been over eighty percent for
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  Speaker 3: both January and February to date, Cancelation rates has come
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  Speaker 3: right down year to date just one point three percent.
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  Speaker 3: So a real focus and once again credit to the team.
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  Speaker 2: In Ukland Airport having another crack at you. I mean,
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  Speaker 2: this is like the perennial back and forth between you guys,
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  Speaker 2: but they're saying today, they're saying that your market dominant,
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  Speaker 2: you know, you eighty four percent of the domestic market.
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  Speaker 2: You're not meeting the needs of customers and regional communities.
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  Speaker 2: We've got higher prices, we've got fewer flights than the
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  Speaker 2: pre pandemic. It's affecting tourism.
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  Speaker 3: What do you say, I'd say a couple of things.
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  Speaker 3: First of all, in terms of regional connectivity. You know,
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  Speaker 3: back in twenty twelve, so just over a decad decade ago,
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  Speaker 3: we only had thirty four turboprops servicing regional New Zealand.
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  Speaker 3: It's eighty hours and Q three hundreds. We now have
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  Speaker 3: fifty three. Seem to be fifty four, so plenty of
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  Speaker 3: extra flights in there have there been some adjustments, particularly
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  Speaker 3: out of Wellington in the last few months, as we
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  Speaker 3: deal with a twenty five percent decline in government travel
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  Speaker 3: and a decline in corporate travel. Of course you would
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  Speaker 3: expect us to do that, but we know how important
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  Speaker 3: it is to be fair to everyone in New Zealand
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  Speaker 3: and ensure we've got connectivity in. The second point I
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  Speaker 3: make is I don't want to get into pointing fingers
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  Speaker 3: at the stage. My issue in terms of main airports
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  Speaker 3: is around the regulatory settings. And you know that's what
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  Speaker 3: I'm asking not just Auckland the airport. I'm asking that
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  Speaker 3: you know, the government to look at and say what
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  Speaker 3: is the responsible regulatory settings to ensure that infrastructure, which
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  Speaker 3: is effectively operating in a monopoly type environment, gets spent.
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  Speaker 3: We all know spend some money, but have some checks
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  Speaker 3: and balances in there.
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  Speaker 2: We have ten seconds left if he's going to get
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  Speaker 2: more expensive this half.
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  Speaker 3: What we're seeing is what we're seeing all around the country, Ryan,
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  Speaker 3: and we're seeing less inflation a little bit. Still. What
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  Speaker 3: I can tell you is we do our best to
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  Speaker 3: hold them, but we are still seeing a little bit
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  Speaker 3: of inflation, but certainly the rate of increase has decreased,
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  Speaker 3: s reraficantly.
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  Speaker 2: Greg, thank you very much, Thank you right, it's Greg
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  Speaker 2: four and he's the chief executive at in New Zealand.
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  Speaker 2: Just gone fourteen minutes after five. So yeah, they are
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  Speaker 2: slightly less twenty three million dollars less than what they
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  Speaker 2: made in the same six months of last year, but
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  Speaker 2: still a profit of more than one hundred million dollars
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  Speaker 2: here in New Zealand.
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