1 00:00:00,120 --> 00:00:02,240 Speaker 1: Now in New Zealand's new chief executive has been in 2 00:00:02,279 --> 00:00:05,120 Speaker 1: the job for what three days, and already has had 3 00:00:05,160 --> 00:00:07,720 Speaker 1: to deliver bad news to shareholders. The company has downgraded 4 00:00:07,760 --> 00:00:10,680 Speaker 1: its first half earnings expectations from a thirty four million 5 00:00:10,680 --> 00:00:13,560 Speaker 1: dollar profit forecast to an up to fifty five million 6 00:00:13,600 --> 00:00:16,600 Speaker 1: dollar loss. Oliver Amnder is the chief executive of the Shareholders' 7 00:00:16,600 --> 00:00:20,320 Speaker 1: Association and with US now Hi Oliver, Good evening, Heather, 8 00:00:20,520 --> 00:00:22,639 Speaker 1: Is this just a case of really bad luck with 9 00:00:22,720 --> 00:00:26,520 Speaker 1: the domestic recession in the US competition and the engine problems. 10 00:00:27,720 --> 00:00:29,640 Speaker 2: Well, that's a pretty good summary of what's really been 11 00:00:29,680 --> 00:00:33,760 Speaker 2: impacting them, Heather. But look, these things it's the outcome 12 00:00:34,000 --> 00:00:37,320 Speaker 2: of some decisions made a long time ago, as is 13 00:00:37,400 --> 00:00:40,599 Speaker 2: the long term nature of the airline business. But yeah, 14 00:00:40,600 --> 00:00:43,120 Speaker 2: they're really suffering because of that sort of week domestic 15 00:00:43,479 --> 00:00:46,800 Speaker 2: economy and New Zealand. The engine issues are hitting them 16 00:00:46,840 --> 00:00:50,120 Speaker 2: hard and then really unfortunate for them. Thing is for 17 00:00:50,200 --> 00:00:54,240 Speaker 2: them that they are working hard to preserve their what 18 00:00:54,320 --> 00:00:56,959 Speaker 2: capacity they can on their key routes and their key 19 00:00:57,000 --> 00:01:00,640 Speaker 2: hub in Auckland, but that's not necessarily helping them actually 20 00:01:00,680 --> 00:01:03,440 Speaker 2: rebound in terms of the growth that's occurring in the 21 00:01:03,480 --> 00:01:06,800 Speaker 2: wider airline sector. So we are seeing Quantus, for example, 22 00:01:06,880 --> 00:01:10,400 Speaker 2: utilize their capacity to actually challenging New Zealands and key routes. 23 00:01:11,040 --> 00:01:14,720 Speaker 2: And yeah, so that they're they're ruined that the cost, 24 00:01:14,800 --> 00:01:17,000 Speaker 2: the long term cost of those engine issues and the 25 00:01:17,080 --> 00:01:19,160 Speaker 2: lack of capacity that that's giving them, and that's really 26 00:01:19,160 --> 00:01:20,240 Speaker 2: showing up in these results. 27 00:01:20,280 --> 00:01:22,200 Speaker 1: What are these decisions, these decisions that were made a 28 00:01:22,240 --> 00:01:23,600 Speaker 1: while ago that you were referring to. 29 00:01:24,440 --> 00:01:27,480 Speaker 2: Or just in terms of the and this isn't anyone's issue, 30 00:01:27,480 --> 00:01:29,240 Speaker 2: but it's just those decisions that are related to the 31 00:01:29,240 --> 00:01:33,080 Speaker 2: plane selection, engine selection and then how that's played out 32 00:01:33,120 --> 00:01:33,759 Speaker 2: in the longer term. 33 00:01:34,080 --> 00:01:36,959 Speaker 1: Yes, do you have any concerns about the way the 34 00:01:37,000 --> 00:01:42,399 Speaker 1: business has been run in recent years? Such as I 35 00:01:42,400 --> 00:01:44,160 Speaker 1: don't know, No, I'm asking you. I mean, if it 36 00:01:44,240 --> 00:01:47,960 Speaker 1: is just a case of like a series of unfortunate 37 00:01:48,000 --> 00:01:50,120 Speaker 1: events that have happened to them, then that is just 38 00:01:50,160 --> 00:01:52,000 Speaker 1: what it is. Is there anything about the way that 39 00:01:52,080 --> 00:01:53,760 Speaker 1: it's been run that you are worried about or is 40 00:01:53,760 --> 00:01:54,760 Speaker 1: it simply the bad luck? 41 00:01:56,480 --> 00:01:58,720 Speaker 2: I think they've been hit by a perfect storm of events. 42 00:01:58,760 --> 00:02:00,960 Speaker 2: And whether you call that luck, it probably is more 43 00:02:01,040 --> 00:02:04,400 Speaker 2: luck than actually decisions that they've made to themselves, and yeah, 44 00:02:04,520 --> 00:02:08,880 Speaker 2: and that's not been great, great outcome for shareholders. They Yeah, 45 00:02:08,919 --> 00:02:10,919 Speaker 2: that they have suffered from that lack of capacity that's 46 00:02:11,240 --> 00:02:13,639 Speaker 2: hinted their growth and hindered their ability to actually create 47 00:02:13,680 --> 00:02:16,799 Speaker 2: some great results. But I think this a little long 48 00:02:16,880 --> 00:02:20,720 Speaker 2: term impact of this. You know, they have been losing 49 00:02:20,760 --> 00:02:22,639 Speaker 2: out in terms of the capacity that they've been able 50 00:02:22,680 --> 00:02:25,000 Speaker 2: to provide on those key routes, and there's a long 51 00:02:25,040 --> 00:02:28,000 Speaker 2: way to come back from that. Yeah, and obviously as 52 00:02:28,040 --> 00:02:31,120 Speaker 2: competitors have filled that space in New Zealand is effectively 53 00:02:31,160 --> 00:02:33,800 Speaker 2: lost market share. I think will be really interested how 54 00:02:33,880 --> 00:02:36,920 Speaker 2: that long term, how that long term resolution. 55 00:02:36,760 --> 00:02:39,160 Speaker 1: Which is to say that it's not going to be 56 00:02:39,200 --> 00:02:41,200 Speaker 1: a quick face. This is a long battle that they've 57 00:02:41,200 --> 00:02:43,080 Speaker 1: got ahead of them, isn't it. 58 00:02:43,080 --> 00:02:45,400 Speaker 2: It is a long battle and it's not a quick fix. 59 00:02:45,440 --> 00:02:48,880 Speaker 2: You're absolutely right. So, and that they have done their 60 00:02:48,919 --> 00:02:51,880 Speaker 2: best to mitigate that. They've leased planes, they've taken other 61 00:02:51,960 --> 00:02:53,800 Speaker 2: actions that they can at least put some capacity on 62 00:02:53,840 --> 00:02:56,680 Speaker 2: those routes. But those those least planes and those least 63 00:02:56,680 --> 00:02:58,560 Speaker 2: engines do come at a cost as well, and that's 64 00:02:58,600 --> 00:03:01,840 Speaker 2: probably impacting these short terms. So for them right now, 65 00:03:01,960 --> 00:03:04,040 Speaker 2: it probably does feel a bit like a trade off 66 00:03:04,080 --> 00:03:06,800 Speaker 2: between results right now in the short term and actually 67 00:03:06,800 --> 00:03:08,800 Speaker 2: preserving their strength in the longer term. 68 00:03:09,200 --> 00:03:11,240 Speaker 1: Oliver, while I've got you, do you have any opinion 69 00:03:11,280 --> 00:03:13,400 Speaker 1: on the softening of the Climate disclosure rules today? 70 00:03:14,880 --> 00:03:23,240 Speaker 2: Oh? Yes, Look, the issue associated with CRD has really 71 00:03:23,360 --> 00:03:25,880 Speaker 2: was set back when it was first implemented, and that 72 00:03:26,080 --> 00:03:29,720 Speaker 2: was really where New Zealand took the somewhat unique approach 73 00:03:29,880 --> 00:03:34,399 Speaker 2: of applying the regime to listed companies only and excluding 74 00:03:34,480 --> 00:03:39,360 Speaker 2: every other unlisted company. And it's a pretty arbitrary and 75 00:03:39,440 --> 00:03:43,880 Speaker 2: discriminatory way to base a regime. So essentially that created 76 00:03:43,960 --> 00:03:47,680 Speaker 2: the conditions where yep, you had regulary arbitrage where private 77 00:03:47,720 --> 00:03:50,040 Speaker 2: companies did not want to list on the exchange in 78 00:03:50,120 --> 00:03:52,400 Speaker 2: the context of that cost and boss that was coming up. 79 00:03:53,040 --> 00:03:57,120 Speaker 2: And look, but no doubt that were relaxing that threshold 80 00:03:57,280 --> 00:04:01,120 Speaker 2: to by a significant degree. Will it will help the 81 00:04:01,160 --> 00:04:03,520 Speaker 2: exchange at least to some extent, But it doesn't take 82 00:04:03,520 --> 00:04:06,640 Speaker 2: away that fundamental regulatory a charge that exists. And actually 83 00:04:06,680 --> 00:04:09,760 Speaker 2: what it does do is it puts at risk New Zealand. 84 00:04:10,000 --> 00:04:12,800 Speaker 2: International investor confidence in New Zealand is a credible place 85 00:04:12,800 --> 00:04:16,440 Speaker 2: to invest, as well, you know, we're walking backwards from 86 00:04:16,440 --> 00:04:21,680 Speaker 2: those commitments. That's differentiating us from the world in terms 87 00:04:21,720 --> 00:04:24,039 Speaker 2: of the progress that they're making in terms of their disclosures. 88 00:04:25,000 --> 00:04:27,240 Speaker 2: That this is a really nuanced argument, and it does 89 00:04:27,240 --> 00:04:30,400 Speaker 2: feel a bit like the government's taken a very blunt 90 00:04:30,600 --> 00:04:35,200 Speaker 2: ax to solve what is actually a really nuanced problem. 91 00:04:35,320 --> 00:04:36,240 Speaker 2: It's good to talk to you, Oliver. 92 00:04:36,279 --> 00:04:39,920 Speaker 1: Thank you very much appreciated, Oliver Amanda, chief executive of 93 00:04:39,920 --> 00:04:41,120 Speaker 1: the Shareholders Association. 94 00:04:41,880 --> 00:04:45,040 Speaker 2: For more from Heather Duplassy Alan Drive, listen live to 95 00:04:45,160 --> 00:04:48,200 Speaker 2: news talks. It'd be from four pm weekdays, or follow 96 00:04:48,240 --> 00:04:50,000 Speaker 2: the podcast on iHeartRadio.