1 00:00:00,280 --> 00:00:03,800 Speaker 1: In a situation like ours, if you don't develop some agility, 2 00:00:04,280 --> 00:00:07,560 Speaker 1: you just can't get stuff done. When people see me 3 00:00:07,760 --> 00:00:10,680 Speaker 1: and want to engage with me, and it's not because 4 00:00:11,080 --> 00:00:15,400 Speaker 1: they lost their bag. It's usually about, hey, what can 5 00:00:15,440 --> 00:00:19,119 Speaker 1: we do about getting back to London, for example. In 6 00:00:19,200 --> 00:00:24,640 Speaker 1: all likelihood, the sort of airline ecosystem, in my view, 7 00:00:25,680 --> 00:00:28,880 Speaker 1: is going to be a challenge in some areas like 8 00:00:29,080 --> 00:00:39,640 Speaker 1: engines and spare parts for probably two plus more users. 9 00:00:40,240 --> 00:00:43,879 Speaker 2: Welcome to supplants. Today we look at the most popular 10 00:00:43,960 --> 00:00:47,440 Speaker 2: investment on Cheersy's in New Zealand. I'm here at the 11 00:00:47,479 --> 00:00:51,160 Speaker 2: headquarters in Auckland and I'll be talking to CEO Greek Forum. 12 00:00:51,560 --> 00:00:54,040 Speaker 3: Investing in involves the risk you might lose the money 13 00:00:54,080 --> 00:00:57,480 Speaker 3: you start with. We recommend talking to a licensed financial advisor. 14 00:00:58,200 --> 00:01:02,040 Speaker 3: We also recommend breading products documents before deciding to invest. 15 00:01:02,320 --> 00:01:04,680 Speaker 3: Everything you're about to see and here is current at 16 00:01:04,680 --> 00:01:05,480 Speaker 3: the time of recording. 17 00:01:05,600 --> 00:01:08,160 Speaker 2: Welcome Greg to the program. It's great to be here 18 00:01:08,240 --> 00:01:12,280 Speaker 2: in Auckland at your place in New Zealand. It's been 19 00:01:12,319 --> 00:01:15,240 Speaker 2: a few weeks since the results were out and they're 20 00:01:15,280 --> 00:01:18,720 Speaker 2: always pretty busy for someone like you. There's with our 21 00:01:18,800 --> 00:01:22,000 Speaker 2: national carrier being what a your New Zealanders. There's always 22 00:01:22,200 --> 00:01:25,960 Speaker 2: a fair bit of reaction opinion about what you should 23 00:01:25,959 --> 00:01:29,200 Speaker 2: and shouldn't be doing. How have you found that so far? 24 00:01:30,680 --> 00:01:35,000 Speaker 1: To be honest with you, it's been reasonably as we expected, 25 00:01:35,040 --> 00:01:38,120 Speaker 1: and that's what we endeavored to do. We came in, 26 00:01:38,680 --> 00:01:42,080 Speaker 1: by and large, give or take, in the middle of guidance, 27 00:01:42,200 --> 00:01:46,680 Speaker 1: just above it and above the midpoint. So I've had 28 00:01:46,720 --> 00:01:50,120 Speaker 1: an enjoyable week actually getting around and talking to people, 29 00:01:50,200 --> 00:01:53,000 Speaker 1: adding a bit of color into the results, which is 30 00:01:53,480 --> 00:01:55,680 Speaker 1: really what people are after, because you know, when you 31 00:01:55,720 --> 00:01:58,800 Speaker 1: go from five eighty five million to two hundred and 32 00:01:58,800 --> 00:02:03,040 Speaker 1: twenty two million, ninety million worth of COVID credit, explain 33 00:02:03,120 --> 00:02:06,320 Speaker 1: to us really what's going on? And I enjoy doing that. 34 00:02:06,680 --> 00:02:10,160 Speaker 2: Air New Zealand's got a big base of retail investors. 35 00:02:10,560 --> 00:02:13,519 Speaker 2: The thing about it, though, is that they're not only investors, 36 00:02:13,720 --> 00:02:17,520 Speaker 2: they're often consumers as well. And the reality is most 37 00:02:17,520 --> 00:02:20,200 Speaker 2: of the time it's an emotional buy. So how does 38 00:02:20,240 --> 00:02:23,600 Speaker 2: Air New Zealand balance that and take some responsibility? Yeah? 39 00:02:23,639 --> 00:02:26,680 Speaker 1: I think you do it very carefully, don't you. I 40 00:02:26,720 --> 00:02:30,640 Speaker 1: think Air New Zealand is a little bit unique in 41 00:02:30,760 --> 00:02:34,520 Speaker 1: many aspects, and you know, when you think about those 42 00:02:34,560 --> 00:02:38,520 Speaker 1: five stakeholder groups that we often talk about customers, how 43 00:02:38,560 --> 00:02:44,560 Speaker 1: we in New Zealand, staff, suppliers, community and shareholders. Everything 44 00:02:45,000 --> 00:02:49,239 Speaker 1: is at a different elevation, possibly to many other businesses, 45 00:02:50,240 --> 00:02:53,800 Speaker 1: because you know, the government owns fifty one percent, and 46 00:02:53,919 --> 00:02:57,400 Speaker 1: therefore you know, there's a heck of a lot of people, 47 00:02:57,600 --> 00:03:01,040 Speaker 1: even if they don't directly own shares, in directly owned shares, 48 00:03:01,160 --> 00:03:03,880 Speaker 1: who are also customers and in many cases our staff. 49 00:03:05,040 --> 00:03:09,120 Speaker 1: You know, it's a highly unionized business. It connects with 50 00:03:09,320 --> 00:03:14,960 Speaker 1: twenty ports domestically, thirty internationally. It holds a pride and 51 00:03:15,240 --> 00:03:20,640 Speaker 1: place and joy in people's hearts. It fulfills a really 52 00:03:20,720 --> 00:03:25,640 Speaker 1: important purpose. And you know, and we deal not just 53 00:03:25,720 --> 00:03:29,240 Speaker 1: with the likes of the big boeings and the air buses, 54 00:03:29,440 --> 00:03:33,120 Speaker 1: but you know, we've got about fifteen or twenty local 55 00:03:33,160 --> 00:03:37,480 Speaker 1: companies that produce snacks and beverages on our planes and 56 00:03:37,960 --> 00:03:42,760 Speaker 1: indirectly feed tourism. So we are integral to what happens 57 00:03:43,080 --> 00:03:46,680 Speaker 1: and everything, as I said, comes with this sort of 58 00:03:46,680 --> 00:03:52,400 Speaker 1: elevated level of scrutiny, and there's a really exciting part 59 00:03:52,480 --> 00:03:54,720 Speaker 1: to that because it means you've got a lift your 60 00:03:54,720 --> 00:03:57,280 Speaker 1: performance and then there are some challenging bits if you 61 00:03:57,280 --> 00:03:57,960 Speaker 1: don't get it right. 62 00:03:58,960 --> 00:04:00,400 Speaker 2: So have you got it right so far? 63 00:04:00,880 --> 00:04:04,720 Speaker 1: I think the answer to that is it depends. And 64 00:04:04,760 --> 00:04:08,040 Speaker 1: the reason I say that is that you know, as 65 00:04:08,080 --> 00:04:12,000 Speaker 1: you think about the results that we've had this last year, 66 00:04:12,040 --> 00:04:14,960 Speaker 1: we've come off this five hundred and eighty five million 67 00:04:15,000 --> 00:04:18,120 Speaker 1: dollar profit down to two hundred and twenty two, and 68 00:04:18,200 --> 00:04:20,559 Speaker 1: yet we've done a little bit more flying you would 69 00:04:20,560 --> 00:04:23,679 Speaker 1: expect based on some of the results around the world. 70 00:04:24,160 --> 00:04:26,040 Speaker 1: Why is here in New Zealand not doing a little 71 00:04:26,080 --> 00:04:29,560 Speaker 1: bit better? And really, what we've found this last financial 72 00:04:29,640 --> 00:04:32,720 Speaker 1: year is that we've had to deal with some sustained 73 00:04:32,760 --> 00:04:38,840 Speaker 1: headwinds that you wouldn't necessarily find in every other geography 74 00:04:39,120 --> 00:04:42,720 Speaker 1: or other competitors. And you know, those have been around Fleet. 75 00:04:43,320 --> 00:04:47,640 Speaker 1: They've been around a domestic economy which is tightened and 76 00:04:48,240 --> 00:04:52,240 Speaker 1: continues to be quite tight, and some sort of elevated 77 00:04:52,600 --> 00:04:57,000 Speaker 1: competition which is fundamentally driven by some geopolitical factors. So 78 00:04:57,880 --> 00:05:00,599 Speaker 1: you know, that makes it exciting but also makes it 79 00:05:00,680 --> 00:05:01,440 Speaker 1: challenging and hard. 80 00:05:01,800 --> 00:05:04,560 Speaker 2: You've been with the company since twenty twenty, and it's 81 00:05:04,600 --> 00:05:06,839 Speaker 2: fair to say there's been a number of headwinds in 82 00:05:06,880 --> 00:05:10,040 Speaker 2: that time COVID for instance, and they're like, how would 83 00:05:10,080 --> 00:05:11,320 Speaker 2: you describe the tenure? 84 00:05:13,040 --> 00:05:16,599 Speaker 1: It has been challenging, but you know you're sort of 85 00:05:16,720 --> 00:05:21,960 Speaker 1: either built for these occasions or you're not. And you 86 00:05:22,000 --> 00:05:24,200 Speaker 1: know that's what I've seen over the years, and you know, 87 00:05:24,240 --> 00:05:26,800 Speaker 1: I've had to deal with difficult situations when I was 88 00:05:26,839 --> 00:05:32,799 Speaker 1: in the US running a United States business in China, 89 00:05:32,920 --> 00:05:36,960 Speaker 1: all over the country, you can be pretty challenging. As 90 00:05:37,200 --> 00:05:40,040 Speaker 1: many of your listeners will know, I've spent many years 91 00:05:40,040 --> 00:05:42,560 Speaker 1: in the food business and that comes under a fair 92 00:05:42,600 --> 00:05:47,880 Speaker 1: amount of scrutiny. So this has different challenges, but you know, 93 00:05:47,960 --> 00:05:51,600 Speaker 1: you either get on with it or you don't. And 94 00:05:52,440 --> 00:05:56,200 Speaker 1: you know it's been sort of a hallmark of what 95 00:05:56,360 --> 00:05:59,440 Speaker 1: I represent that you put your head down, you come 96 00:05:59,520 --> 00:06:02,400 Speaker 1: up with a good plan. You must ensure obviously that 97 00:06:02,440 --> 00:06:05,040 Speaker 1: your business has a good culture. You go to look 98 00:06:05,040 --> 00:06:08,640 Speaker 1: after your customers and your staff and believe in what 99 00:06:08,680 --> 00:06:09,080 Speaker 1: you're doing. 100 00:06:09,520 --> 00:06:12,720 Speaker 2: And we do with hindsight, though, is this something you 101 00:06:12,760 --> 00:06:15,279 Speaker 2: would do differently? I mean the industry is quite different. 102 00:06:15,320 --> 00:06:18,040 Speaker 2: You've said, there's the similarities no matter what business are 103 00:06:18,080 --> 00:06:18,719 Speaker 2: you're leading. 104 00:06:19,279 --> 00:06:23,279 Speaker 1: Yeah, many many things, And you know I went through 105 00:06:23,320 --> 00:06:26,560 Speaker 1: this period because literally in the room where we're doing 106 00:06:26,600 --> 00:06:30,280 Speaker 1: this podcast, I sat on I think it was Monday, 107 00:06:30,440 --> 00:06:35,040 Speaker 1: the fourth of February twenty twenty, and on the previous day, 108 00:06:35,120 --> 00:06:38,320 Speaker 1: the Sunday, we stopped flying to Shanghai. So I was 109 00:06:38,360 --> 00:06:41,599 Speaker 1: sitting in this room and meeting with the leadership squad, 110 00:06:42,279 --> 00:06:45,200 Speaker 1: and it was sort of Okay, one router is down, 111 00:06:45,360 --> 00:06:48,760 Speaker 1: and you know, within two weeks, three or four routes 112 00:06:48,760 --> 00:06:51,880 Speaker 1: were down. Within five weeks we'd stopped flying all together 113 00:06:51,920 --> 00:06:55,919 Speaker 1: in the country was in lockdown. And I can absolutely 114 00:06:55,960 --> 00:06:59,839 Speaker 1: recall at that time, going, boy, I wish I knew 115 00:07:00,000 --> 00:07:03,640 Speaker 1: a lot more about airlines at this point. I'd have 116 00:07:03,720 --> 00:07:06,960 Speaker 1: to say that about two years later, when we were 117 00:07:07,000 --> 00:07:11,400 Speaker 1: still effectively in lockdown, we had periods where we were open, shut, 118 00:07:11,640 --> 00:07:15,680 Speaker 1: paused open, you know, and people forget that, but we 119 00:07:15,720 --> 00:07:18,800 Speaker 1: were on again, off again. We were green lights, red lights, 120 00:07:18,840 --> 00:07:23,520 Speaker 1: orange lights. I realized actually that there were there wasn't 121 00:07:23,560 --> 00:07:26,160 Speaker 1: really any playbook for this, and so in some ways 122 00:07:26,400 --> 00:07:29,880 Speaker 1: I wasn't possibly as disadvantaged as I thought I was 123 00:07:29,920 --> 00:07:32,880 Speaker 1: at the beginning. But there are some things. Number One, 124 00:07:33,920 --> 00:07:36,800 Speaker 1: it is way harder restarting an airline than it is 125 00:07:36,840 --> 00:07:42,080 Speaker 1: stopping it. So would I have been so quick to 126 00:07:42,320 --> 00:07:45,800 Speaker 1: take some of the people out of the business. And 127 00:07:45,840 --> 00:07:49,600 Speaker 1: the answer is, I would have understood what roles are 128 00:07:49,680 --> 00:07:55,120 Speaker 1: much harder to operate and replace, and I would not 129 00:07:55,240 --> 00:07:58,880 Speaker 1: have been as quick as judicious as getting that out. 130 00:07:59,240 --> 00:08:04,680 Speaker 1: So you know that it's an example of learning understanding 131 00:08:04,720 --> 00:08:07,040 Speaker 1: the supply chain a little bit more about what would 132 00:08:07,120 --> 00:08:11,560 Speaker 1: happen in terms of parts and pieces, and you know, 133 00:08:11,800 --> 00:08:14,520 Speaker 1: ensuring that we could get as close as we could 134 00:08:14,600 --> 00:08:17,800 Speaker 1: to some of these suppliers and manufacturers. And I'm not 135 00:08:17,880 --> 00:08:22,000 Speaker 1: just talking about Boeing or Airbus, but you know, Saffron 136 00:08:22,200 --> 00:08:25,400 Speaker 1: is a massive supplier, so so getting in close with 137 00:08:25,480 --> 00:08:28,520 Speaker 1: them and understanding we might have a problem with the 138 00:08:28,560 --> 00:08:32,000 Speaker 1: actuators and the business class seats and they're a little 139 00:08:32,040 --> 00:08:36,200 Speaker 1: electric motor that moves the seats up and down. You know, 140 00:08:36,280 --> 00:08:39,839 Speaker 1: I realize that my knowledge of that wasn't as deep 141 00:08:40,080 --> 00:08:42,480 Speaker 1: as I would have wanted. And I can tell you 142 00:08:42,520 --> 00:08:46,160 Speaker 1: as as some of these events, you know, you get 143 00:08:46,480 --> 00:08:50,359 Speaker 1: little microcosms of them play out. You learn. So for example, 144 00:08:50,960 --> 00:08:52,840 Speaker 1: you know, we're not going to be back in Vanuatu 145 00:08:52,880 --> 00:08:57,760 Speaker 1: anytime soon. You know, we were flying into there, into 146 00:08:57,800 --> 00:09:01,800 Speaker 1: New Maya. It's been you know, extended in terms of 147 00:09:02,600 --> 00:09:05,600 Speaker 1: closing that area down. We'll keep the people on things 148 00:09:05,800 --> 00:09:08,200 Speaker 1: because I know how hard it is to restart. 149 00:09:08,559 --> 00:09:11,720 Speaker 2: Thinking of the headwinds you've you've talked about a few 150 00:09:11,960 --> 00:09:14,839 Speaker 2: headwinds can be things you may have some control over 151 00:09:15,080 --> 00:09:17,480 Speaker 2: or not. Says with the economy, with inflation, that was 152 00:09:17,520 --> 00:09:20,360 Speaker 2: a big part of what happened with the result. Is 153 00:09:20,400 --> 00:09:23,360 Speaker 2: there or are the headwinds that you do think you 154 00:09:23,440 --> 00:09:26,600 Speaker 2: can work with that you can hedge four you can 155 00:09:27,480 --> 00:09:28,960 Speaker 2: make some headway with if you like. 156 00:09:29,480 --> 00:09:32,439 Speaker 1: Well, I think the answer to that is yes, and 157 00:09:33,000 --> 00:09:36,680 Speaker 1: where we can I think we're doing a reasonable job 158 00:09:36,760 --> 00:09:39,840 Speaker 1: of doing that. So you know, as we saw things 159 00:09:40,000 --> 00:09:44,040 Speaker 1: tighten up a bit as early as sort of August 160 00:09:44,400 --> 00:09:47,080 Speaker 1: of last year, so over a year ago. You know, 161 00:09:47,120 --> 00:09:49,640 Speaker 1: we've gone through the FIFA World Cup, we'd had a 162 00:09:49,679 --> 00:09:52,440 Speaker 1: pretty good July, and we could see coming into an 163 00:09:52,480 --> 00:09:56,160 Speaker 1: election things we're going to get tight. We were hearing that, 164 00:09:56,440 --> 00:09:59,040 Speaker 1: you know, should there be a change in government, spending 165 00:09:59,040 --> 00:10:01,880 Speaker 1: would come down. So you know, you start preparing yourself 166 00:10:01,920 --> 00:10:05,440 Speaker 1: for trimming your sales a bit, so you do that. 167 00:10:05,840 --> 00:10:09,200 Speaker 1: There's always opportunities and productivity. You know, we've spent a 168 00:10:09,240 --> 00:10:12,520 Speaker 1: lot of time over the last few years working on 169 00:10:12,880 --> 00:10:15,559 Speaker 1: areas of the business where we know if we give 170 00:10:15,600 --> 00:10:19,040 Speaker 1: people the right tools, then they can be more productive. Now, 171 00:10:19,040 --> 00:10:22,400 Speaker 1: some of those are physical tools like ground service equipment, 172 00:10:22,800 --> 00:10:25,840 Speaker 1: you know, getting the right pushback tugs or pallette loaders. 173 00:10:26,200 --> 00:10:30,720 Speaker 1: Others can be things like replatforming the call center so 174 00:10:30,840 --> 00:10:34,600 Speaker 1: that you've got a much better process there for handling calls. 175 00:10:34,600 --> 00:10:36,840 Speaker 1: You know, we used to have about eight hundred people 176 00:10:36,880 --> 00:10:39,320 Speaker 1: working in the call center. We've got that down to 177 00:10:39,400 --> 00:10:42,800 Speaker 1: five hundred, and there is room to go even further, 178 00:10:43,240 --> 00:10:46,480 Speaker 1: not just because of that tool, but because we also 179 00:10:46,600 --> 00:10:50,960 Speaker 1: replatform the customer app. There's now considerably more things that 180 00:10:51,000 --> 00:10:54,080 Speaker 1: customers can do self service. So we've reduced the call 181 00:10:54,160 --> 00:10:57,920 Speaker 1: volume from sort of, you know, fifty thousand calls a 182 00:10:57,960 --> 00:11:00,679 Speaker 1: week down to about twenty five thousand a week. So 183 00:11:01,160 --> 00:11:03,680 Speaker 1: you're always looking at the things that you can control 184 00:11:04,320 --> 00:11:08,520 Speaker 1: the ones you can't. You know, sometimes you just have 185 00:11:08,600 --> 00:11:09,880 Speaker 1: to stomach those and move on. 186 00:11:10,920 --> 00:11:12,880 Speaker 2: One of the ones that sounds like it's hard to 187 00:11:12,920 --> 00:11:17,280 Speaker 2: control is getting new aircraft with Boeing, and you know, 188 00:11:17,320 --> 00:11:20,640 Speaker 2: you've got the NEOs and the Dreamliners, and at one 189 00:11:20,679 --> 00:11:23,880 Speaker 2: stage you had one billion worth of assets on the tarmac, 190 00:11:23,960 --> 00:11:27,080 Speaker 2: not flying. You've talked at link about you know, what 191 00:11:27,160 --> 00:11:30,280 Speaker 2: had happened and the like. Where is that going in future? 192 00:11:30,280 --> 00:11:33,200 Speaker 2: I mean you've got to buy or put contracts in 193 00:11:33,240 --> 00:11:38,760 Speaker 2: for airlines airliners years and years in advance. So is 194 00:11:38,800 --> 00:11:41,319 Speaker 2: there much scope there to change suppliers or change your 195 00:11:41,320 --> 00:11:43,720 Speaker 2: contracts or have some more certainty. 196 00:11:44,000 --> 00:11:47,280 Speaker 1: Well, I think there's always areas that you can go 197 00:11:47,320 --> 00:11:50,680 Speaker 1: in further. You know, on Sunday, I'll be out of 198 00:11:50,720 --> 00:11:55,400 Speaker 1: the country and I'm heading up to Canada and meeting 199 00:11:55,559 --> 00:11:59,160 Speaker 1: with the owner of d Havland who make the Q 200 00:11:59,280 --> 00:12:04,360 Speaker 1: three hundred. And this particular person bought that airline off 201 00:12:04,360 --> 00:12:09,960 Speaker 1: Bombardier probably about five years ago. You know, we have 202 00:12:10,000 --> 00:12:12,680 Speaker 1: a fleet of Q three hundreds. They aren't making that 203 00:12:12,720 --> 00:12:16,320 Speaker 1: plane anymore. So there's always an opportunity to sit down 204 00:12:16,400 --> 00:12:19,720 Speaker 1: with these people and say, Okay, what is your strategy, 205 00:12:19,760 --> 00:12:21,520 Speaker 1: where are we going to go? What are we going 206 00:12:21,559 --> 00:12:25,640 Speaker 1: to do? You just can't sit there and wait. In 207 00:12:25,720 --> 00:12:29,160 Speaker 1: about three weeks time, I will be in South Carolina 208 00:12:29,920 --> 00:12:34,480 Speaker 1: in the Boeing plant where ideally we're going to get 209 00:12:35,000 --> 00:12:39,640 Speaker 1: our first two of the eight seven eight sevens we've 210 00:12:39,679 --> 00:12:43,680 Speaker 1: had on order and hopefully we'll be able to see 211 00:12:43,720 --> 00:12:47,679 Speaker 1: those come into the country around about October November twenty 212 00:12:47,880 --> 00:12:50,560 Speaker 1: twenty five. But you know, when I go there, I 213 00:12:50,600 --> 00:12:53,640 Speaker 1: will meet with the chief executive of Boeing who's just 214 00:12:53,720 --> 00:12:58,440 Speaker 1: started Kelli and their team and make sure that we're 215 00:12:58,480 --> 00:13:01,040 Speaker 1: on the production line that's things are going to happen. 216 00:13:01,360 --> 00:13:03,800 Speaker 1: By the way, we'll have engineers full time as that 217 00:13:03,880 --> 00:13:07,440 Speaker 1: plane is being built up there, which is standard practice 218 00:13:07,480 --> 00:13:12,479 Speaker 1: for us to ensure that all the specifications meet our specifications. 219 00:13:13,600 --> 00:13:18,559 Speaker 1: So there's always things you can do, but it's hard, 220 00:13:18,960 --> 00:13:22,240 Speaker 1: and you know, if you have a situation like we've 221 00:13:22,280 --> 00:13:24,640 Speaker 1: had with Rolls Royce. We make a decision on a 222 00:13:24,679 --> 00:13:28,080 Speaker 1: Trent engine back in two thousand and four, there were 223 00:13:28,080 --> 00:13:30,679 Speaker 1: two choices. We could have gone with the Ge engine, 224 00:13:30,679 --> 00:13:32,400 Speaker 1: we could have gone with the Trent. We made a 225 00:13:32,400 --> 00:13:35,080 Speaker 1: decision to go with the Trent. We got the first 226 00:13:35,080 --> 00:13:38,960 Speaker 1: of those on a plane back in about twenty fourteen, 227 00:13:39,800 --> 00:13:44,280 Speaker 1: and really since about twenty seventeen, that's been a challenge. Now, 228 00:13:44,679 --> 00:13:48,480 Speaker 1: these are expensive pieces of kit, so to suddenly say, well, 229 00:13:48,520 --> 00:13:51,480 Speaker 1: I've got twenty eight of these engines, because I've got 230 00:13:51,559 --> 00:13:53,480 Speaker 1: fourteen of these planes, I'll tell you what I'm going 231 00:13:53,520 --> 00:13:55,240 Speaker 1: to rip them all off and go and put ge 232 00:13:55,440 --> 00:13:59,520 Speaker 1: engines on them. That is too much to digest. So 233 00:13:59,760 --> 00:14:01,720 Speaker 1: then we've got to sit down with Rolls and say 234 00:14:02,000 --> 00:14:05,040 Speaker 1: how are we going to fix this problem? And it's global. 235 00:14:05,760 --> 00:14:09,440 Speaker 1: You know, there are around about twenty three seven eight 236 00:14:09,559 --> 00:14:12,400 Speaker 1: sevens parked on the ground around the world at the 237 00:14:12,400 --> 00:14:15,440 Speaker 1: moment because there are not enough engines to fly them. 238 00:14:15,880 --> 00:14:19,000 Speaker 1: We had four, but the good news is yesterday we're 239 00:14:19,040 --> 00:14:21,480 Speaker 1: down to three. We were able to get a couple 240 00:14:21,520 --> 00:14:24,320 Speaker 1: of engines, so we've got another one back fly. So 241 00:14:25,520 --> 00:14:27,680 Speaker 1: you got to push, you've got to work at it 242 00:14:27,720 --> 00:14:31,440 Speaker 1: all the time. But you also have to accept that 243 00:14:31,840 --> 00:14:37,520 Speaker 1: in all likelihood the sort of airline ecosystem, in my view, 244 00:14:38,480 --> 00:14:41,680 Speaker 1: is going to be a challenge in some areas like 245 00:14:41,920 --> 00:14:47,280 Speaker 1: engines and spare parts for probably two plus more years. 246 00:14:48,440 --> 00:14:51,600 Speaker 2: Doesn't make any difference that we are the small country 247 00:14:52,320 --> 00:14:55,800 Speaker 2: island in the Pacific. I mean, if we're talking with 248 00:14:55,840 --> 00:14:58,680 Speaker 2: the likes of Boeing and Rolls Royce, they're big players, 249 00:14:58,720 --> 00:15:00,760 Speaker 2: and there's many others in the world who've got much 250 00:15:00,800 --> 00:15:02,240 Speaker 2: more money in might than us. 251 00:15:02,360 --> 00:15:05,720 Speaker 1: Does that factor there's always a risk it does. And 252 00:15:06,240 --> 00:15:08,480 Speaker 1: you know, before I took this job. I was on 253 00:15:08,520 --> 00:15:11,040 Speaker 1: the other end of the scale. I was with a 254 00:15:11,120 --> 00:15:15,040 Speaker 1: business that employed in the US alone, I had one 255 00:15:15,080 --> 00:15:19,960 Speaker 1: point four million staff, you know, five thousand stores. Who 256 00:15:20,040 --> 00:15:24,320 Speaker 1: doesn't want to do the deal with Walmart? The reality, however, 257 00:15:24,480 --> 00:15:28,440 Speaker 1: is that does have a component. But the other part 258 00:15:28,440 --> 00:15:31,320 Speaker 1: of this is how do you bring something to the 259 00:15:31,400 --> 00:15:36,720 Speaker 1: table with your supplier or partner that will excite them. 260 00:15:36,760 --> 00:15:38,840 Speaker 1: And I'll give you an example of how we can 261 00:15:38,920 --> 00:15:43,120 Speaker 1: play in this space. Two examples. Actually, you know, when 262 00:15:43,120 --> 00:15:47,320 Speaker 1: the first of the seven eight sevens come down and 263 00:15:47,480 --> 00:15:50,400 Speaker 1: we start flying them, ideally at the end of next year, 264 00:15:50,960 --> 00:15:52,680 Speaker 1: they're going to have a product on them that no 265 00:15:52,720 --> 00:15:55,080 Speaker 1: one else in the world has got. It's called sky 266 00:15:55,200 --> 00:16:00,560 Speaker 1: nest oh yep. And what's that worth to Boeing? Because 267 00:16:00,560 --> 00:16:05,560 Speaker 1: it's not just the delivery of you know, their seventh, seven, eight, 268 00:16:05,760 --> 00:16:08,600 Speaker 1: seventh for the month, because that's sort of what they'll 269 00:16:08,640 --> 00:16:11,880 Speaker 1: be trying to make seven, eight or nine of these 270 00:16:11,880 --> 00:16:14,600 Speaker 1: planes a month. This is the first in the world. 271 00:16:14,680 --> 00:16:16,840 Speaker 1: And you know, by the way, that fits in with 272 00:16:16,920 --> 00:16:19,560 Speaker 1: our DNA because we were the first to have a 273 00:16:19,560 --> 00:16:23,160 Speaker 1: skycouch on there. So what do you bring to the 274 00:16:23,280 --> 00:16:28,920 Speaker 1: supply that they can't do? Another example. We hope that 275 00:16:29,000 --> 00:16:33,760 Speaker 1: within about four weeks time, around the fourteenth fifteenth of October, 276 00:16:34,240 --> 00:16:36,440 Speaker 1: one of our seven eight sevens will head up to 277 00:16:36,480 --> 00:16:41,960 Speaker 1: Singapore and will begin to retrofit, and this plane should 278 00:16:42,000 --> 00:16:46,760 Speaker 1: be back just before Christmas with a completely new setup 279 00:16:47,080 --> 00:16:51,440 Speaker 1: for seats in business class and premium economy and economy, 280 00:16:51,960 --> 00:16:56,600 Speaker 1: with new entertainment systems, with new galleys and bathrooms. So 281 00:16:56,640 --> 00:16:59,960 Speaker 1: it's one of the existing fourteen seven eight sevens completely 282 00:17:00,200 --> 00:17:04,600 Speaker 1: retrofit it. Here's the interesting thing. We are the first 283 00:17:04,840 --> 00:17:10,080 Speaker 1: company anywhere to have done a retrofit of an old 284 00:17:10,200 --> 00:17:15,240 Speaker 1: plane to that extent before a new one has been built. 285 00:17:17,040 --> 00:17:19,480 Speaker 1: Because normally what you would do is that you would say, 286 00:17:19,720 --> 00:17:22,080 Speaker 1: I've got some new product that I want to put 287 00:17:22,119 --> 00:17:25,240 Speaker 1: on the plane, new seats or new galleys or whatever, 288 00:17:25,880 --> 00:17:28,600 Speaker 1: the next one that's going through the big production line. 289 00:17:28,640 --> 00:17:29,960 Speaker 1: I'm going to get it done there. 290 00:17:29,960 --> 00:17:30,840 Speaker 2: New plane. 291 00:17:30,960 --> 00:17:35,280 Speaker 1: So why did this happen. It happened because we sat 292 00:17:35,320 --> 00:17:38,320 Speaker 1: down with Boeing about three years ago, not long after 293 00:17:38,400 --> 00:17:41,480 Speaker 1: the country had reopened, and we spoke about when we 294 00:17:41,480 --> 00:17:45,480 Speaker 1: were likely to see planes new ones and what we 295 00:17:45,520 --> 00:17:48,840 Speaker 1: could do about retrofits. So they explained to us as 296 00:17:48,880 --> 00:17:51,080 Speaker 1: you would expect. Well, we'll get the new plane off 297 00:17:51,119 --> 00:17:55,040 Speaker 1: and then we'll start thinking about retrofits. And we said, yeah, 298 00:17:55,040 --> 00:17:58,000 Speaker 1: but if you're going to be delayed, this could be 299 00:17:58,320 --> 00:18:02,360 Speaker 1: putting us behind the eight ball. And the other thing 300 00:18:02,560 --> 00:18:06,199 Speaker 1: complication they said to me is we also got a problem. 301 00:18:06,200 --> 00:18:10,400 Speaker 1: We had a thousand engineers between the Ukraine and Russia 302 00:18:10,600 --> 00:18:12,720 Speaker 1: and we've lost all those people because we had to 303 00:18:12,760 --> 00:18:16,239 Speaker 1: go fight in the war. So we don't have a 304 00:18:16,280 --> 00:18:19,720 Speaker 1: whole bunch of technical capability to be able to take 305 00:18:20,200 --> 00:18:23,560 Speaker 1: all the drawings and all the things that have to 306 00:18:23,600 --> 00:18:26,800 Speaker 1: be done so that you can complete a retrofit. So 307 00:18:27,440 --> 00:18:30,040 Speaker 1: go away, go talk to someone else. And we sat 308 00:18:30,080 --> 00:18:32,720 Speaker 1: down with them and said, actually, no, we're going to 309 00:18:32,720 --> 00:18:34,919 Speaker 1: help you design a new process for this. We're going 310 00:18:34,960 --> 00:18:37,439 Speaker 1: to work out how you're going to provide some of 311 00:18:37,440 --> 00:18:42,280 Speaker 1: that intellectual property to a middleman and integrator, and together 312 00:18:42,400 --> 00:18:48,040 Speaker 1: the three of us, between the integrator, yourself and ourselves, 313 00:18:48,359 --> 00:18:51,159 Speaker 1: we're going to work out how to do this before 314 00:18:51,200 --> 00:18:55,000 Speaker 1: we even build a new plane. Now we're on the 315 00:18:55,000 --> 00:18:59,440 Speaker 1: cusp of doing that, but what's that worth deboeing? Well, 316 00:18:59,480 --> 00:19:01,600 Speaker 1: as I said them, if you learn how to do 317 00:19:01,680 --> 00:19:04,760 Speaker 1: this new process with a smaller line down the bottom 318 00:19:04,800 --> 00:19:08,600 Speaker 1: of the world. You've now solved a problem for much 319 00:19:08,720 --> 00:19:10,280 Speaker 1: larger airlines. 320 00:19:10,520 --> 00:19:14,000 Speaker 2: And they've obviously agreed with that. Is it an experiment 321 00:19:14,160 --> 00:19:14,600 Speaker 2: for them. 322 00:19:14,520 --> 00:19:17,000 Speaker 1: You think a little bit. I'm sure, but I can 323 00:19:17,040 --> 00:19:20,000 Speaker 1: tell you they've been pretty happy with how it's going. 324 00:19:20,040 --> 00:19:21,200 Speaker 1: But boy, it's been hard. 325 00:19:21,480 --> 00:19:21,840 Speaker 2: Yeah. 326 00:19:22,200 --> 00:19:25,200 Speaker 1: So you know, every two weeks we're on a VC 327 00:19:25,840 --> 00:19:30,359 Speaker 1: with them and there are probably seven or eight people 328 00:19:30,400 --> 00:19:32,320 Speaker 1: who pretty much for the last six months have had 329 00:19:32,359 --> 00:19:36,639 Speaker 1: to live overseas, getting into Japan to meet with JAMCO, 330 00:19:36,960 --> 00:19:40,359 Speaker 1: or getting into France to meet with Saffran, or in 331 00:19:40,480 --> 00:19:43,760 Speaker 1: Wales where the seats are being built, and they're having 332 00:19:43,840 --> 00:19:46,480 Speaker 1: to can we get this done? And can you talk 333 00:19:46,520 --> 00:19:50,320 Speaker 1: to this person and do that? But heck it, in 334 00:19:50,359 --> 00:19:53,760 Speaker 1: a situation like ours, if you don't develop some agility, 335 00:19:54,240 --> 00:19:55,600 Speaker 1: you just can't get stuff done. 336 00:19:56,400 --> 00:19:58,439 Speaker 2: One of the areas that in New Zealand has was 337 00:19:58,480 --> 00:20:02,360 Speaker 2: always sought to be a trailblaze and was obviously sustainable aviation, 338 00:20:02,480 --> 00:20:05,639 Speaker 2: fuel flying and thinking about target at twenty thirty and 339 00:20:05,680 --> 00:20:08,520 Speaker 2: the like. That's obviously changed in recent times. I mean, 340 00:20:09,520 --> 00:20:11,960 Speaker 2: where is that at in terms of how we could 341 00:20:11,960 --> 00:20:15,000 Speaker 2: come back and be a leader and actually changing the 342 00:20:15,040 --> 00:20:18,639 Speaker 2: dial for an industry that has seen to be polluting 343 00:20:18,640 --> 00:20:20,359 Speaker 2: the atmosphere and warming the planet. 344 00:20:21,400 --> 00:20:24,159 Speaker 1: Well, the first thing I'd say is, actually, I'm not disappointed. 345 00:20:24,240 --> 00:20:26,720 Speaker 1: I'm very proud of the team. Now, Now that may 346 00:20:26,800 --> 00:20:30,639 Speaker 1: seem a bit strange, but you know, the most important 347 00:20:30,640 --> 00:20:35,159 Speaker 1: thing in any business's culture and the ability to you know, 348 00:20:35,240 --> 00:20:37,840 Speaker 1: part of that is the ability to be able to 349 00:20:37,880 --> 00:20:44,160 Speaker 1: have very honest and truthful and unvarnished conversations. So let's 350 00:20:44,160 --> 00:20:46,160 Speaker 1: wind the clock back two and a half years ago 351 00:20:46,240 --> 00:20:49,800 Speaker 1: and we decide that we're going to put in a 352 00:20:49,920 --> 00:20:53,119 Speaker 1: science based target and I think we were the second 353 00:20:53,119 --> 00:20:55,880 Speaker 1: airline in the world to do it. And we sat 354 00:20:55,920 --> 00:20:58,439 Speaker 1: down and we said, okay, what do we think we 355 00:20:58,560 --> 00:21:01,199 Speaker 1: need to do to achieve this? And well, you know, 356 00:21:01,240 --> 00:21:03,240 Speaker 1: this is where the fleet's going to be, and this 357 00:21:03,280 --> 00:21:06,879 Speaker 1: is how many sustainable aviation fuel plants are going to 358 00:21:06,880 --> 00:21:09,800 Speaker 1: be built. These are the routes that we're going to fly, 359 00:21:10,480 --> 00:21:12,359 Speaker 1: This is how we're going to get more productive with 360 00:21:12,440 --> 00:21:14,560 Speaker 1: the flying that we're doing. This is what we're going 361 00:21:14,600 --> 00:21:18,200 Speaker 1: to do with electrifying ground service equipment. You can see 362 00:21:18,240 --> 00:21:20,600 Speaker 1: you build this thing up two and a half years 363 00:21:20,640 --> 00:21:24,840 Speaker 1: ago and you say, based on these assumptions, this is 364 00:21:24,880 --> 00:21:28,520 Speaker 1: where we think will be by twenty thirty. Well, a 365 00:21:28,520 --> 00:21:30,840 Speaker 1: couple of things have changed over those two and a 366 00:21:30,880 --> 00:21:33,520 Speaker 1: half years, you know. One of them is we are 367 00:21:33,720 --> 00:21:36,639 Speaker 1: almost certainly going to have to keep our triple sevens 368 00:21:36,640 --> 00:21:42,000 Speaker 1: a bit longer. Why because Boeing, you know, we placed 369 00:21:42,000 --> 00:21:43,919 Speaker 1: an order. We thought we were going to get that 370 00:21:44,119 --> 00:21:47,720 Speaker 1: order in twenty twenty two. We delayed it for one year, 371 00:21:47,800 --> 00:21:51,200 Speaker 1: so it was initially twenty twenty one, and we said 372 00:21:51,480 --> 00:21:54,359 Speaker 1: to Boeing, look, COVID all the other stuff, delay those 373 00:21:54,520 --> 00:21:57,760 Speaker 1: till twenty twenty two. And they said, that's fine. I've 374 00:21:57,800 --> 00:22:00,200 Speaker 1: just shared with you. The earliest we'll see them is 375 00:22:00,240 --> 00:22:04,760 Speaker 1: the end of twenty twenty five. So the fleet that 376 00:22:04,800 --> 00:22:07,320 Speaker 1: we thought we were going to fly, which was more 377 00:22:07,359 --> 00:22:11,280 Speaker 1: fuel efficient than the Triple sevens, we just can't get 378 00:22:11,280 --> 00:22:14,800 Speaker 1: those planes. So there's no point hiding behind that. That 379 00:22:15,520 --> 00:22:20,720 Speaker 1: is a reality. You know, at some point, if sustainable 380 00:22:20,760 --> 00:22:26,320 Speaker 1: aviation fuel is the solution, and at this stage that 381 00:22:26,520 --> 00:22:32,679 Speaker 1: is the solution. Yeah, right, The current thirty plants or 382 00:22:32,760 --> 00:22:34,919 Speaker 1: so that are around the world need to increase to 383 00:22:34,960 --> 00:22:39,960 Speaker 1: about five thousand. So think about that, thirty plants to 384 00:22:40,040 --> 00:22:42,720 Speaker 1: about five thousand. So as we look at that and 385 00:22:42,760 --> 00:22:46,280 Speaker 1: we say, well, okay, we're we're working really hard at 386 00:22:46,320 --> 00:22:48,520 Speaker 1: the moment. We want to get two percent of our 387 00:22:48,560 --> 00:22:54,159 Speaker 1: fuel being sustainable aviation fuel this year, two percent to 388 00:22:54,240 --> 00:22:56,920 Speaker 1: hit the target in twenty thirty, you've got to believe 389 00:22:56,960 --> 00:23:00,520 Speaker 1: that's going to get to seventeen percent. There's a lot 390 00:23:00,520 --> 00:23:02,639 Speaker 1: of extra plants that have got to get built between 391 00:23:02,680 --> 00:23:05,840 Speaker 1: now and the end of the year. What's going to 392 00:23:05,840 --> 00:23:09,960 Speaker 1: happen in terms of regulation on this, Is it going 393 00:23:10,000 --> 00:23:14,440 Speaker 1: to get mandated or not. So you know what we've 394 00:23:14,480 --> 00:23:18,320 Speaker 1: done is we've said, hey, let's just take a look 395 00:23:18,359 --> 00:23:20,720 Speaker 1: at this, because you've got to put your hand on 396 00:23:20,760 --> 00:23:23,240 Speaker 1: your heart and you've got to say I'm going to 397 00:23:23,359 --> 00:23:26,639 Speaker 1: hit that goal. And if you have some situations that 398 00:23:26,680 --> 00:23:28,960 Speaker 1: have changed, which we have as I've just shared with you, 399 00:23:29,400 --> 00:23:32,760 Speaker 1: the appropriate thing to do is to remove that and 400 00:23:32,800 --> 00:23:36,680 Speaker 1: then to reassess there is no change in the commitment 401 00:23:36,760 --> 00:23:43,080 Speaker 1: to how we feel about sustainable aviation fuel, to reducing carbon, 402 00:23:43,480 --> 00:23:47,560 Speaker 1: to all the other activity. We've got an electric aircraft 403 00:23:47,720 --> 00:23:51,840 Speaker 1: which we'll be using as a demonstrator down here, to 404 00:23:51,960 --> 00:23:56,000 Speaker 1: the activity that happens around our business, to removing cups, 405 00:23:56,040 --> 00:24:00,400 Speaker 1: to electrifying equipment. None of that's changed. And that's why 406 00:24:00,440 --> 00:24:02,840 Speaker 1: I began by saying to you, I'm proud of what 407 00:24:02,880 --> 00:24:06,399 Speaker 1: we did because I am. The wrong thing to do 408 00:24:06,480 --> 00:24:10,080 Speaker 1: would have been to delay making that decision and then 409 00:24:10,680 --> 00:24:14,000 Speaker 1: be put in a corner later on. I think we've 410 00:24:14,000 --> 00:24:16,040 Speaker 1: come out and done the right thing and said, hey, 411 00:24:16,480 --> 00:24:18,280 Speaker 1: we're taking that away. We're going to go back and 412 00:24:18,320 --> 00:24:20,439 Speaker 1: review it. Give us a few months, and we'll be 413 00:24:20,520 --> 00:24:24,120 Speaker 1: back with what we think is a better number than 414 00:24:24,160 --> 00:24:26,080 Speaker 1: we had than the one we had previously. 415 00:24:26,680 --> 00:24:29,760 Speaker 2: As a possibility though, that things could change again, and 416 00:24:29,800 --> 00:24:32,520 Speaker 2: it may be that you maybe don't make that target, 417 00:24:32,560 --> 00:24:34,679 Speaker 2: but twenty fifty does seem a long way out. 418 00:24:34,840 --> 00:24:38,639 Speaker 1: I'll guarantee you things will change again. I don't have 419 00:24:38,680 --> 00:24:41,159 Speaker 1: any doubt they will. I also have no doubt that 420 00:24:41,200 --> 00:24:44,439 Speaker 1: some of the assumptions we make will be wrong. So 421 00:24:45,119 --> 00:24:47,960 Speaker 1: you know this is a challenge. So why does twenty 422 00:24:48,080 --> 00:24:51,639 Speaker 1: fifty sit out there, Well, you know some of us 423 00:24:51,680 --> 00:24:54,199 Speaker 1: won't be around by twenty fifty, so it's easier to 424 00:24:54,280 --> 00:24:58,439 Speaker 1: make some of those assumptions. And that is the reality 425 00:24:58,520 --> 00:25:02,399 Speaker 1: of these things. But you know the commitment, you have 426 00:25:02,520 --> 00:25:07,320 Speaker 1: no doubt. Your listeners should have no doubt that sustainability 427 00:25:07,359 --> 00:25:11,240 Speaker 1: is a keyp link. I think we have some of 428 00:25:11,280 --> 00:25:14,919 Speaker 1: the very best people that I have seen in any airline, 429 00:25:15,000 --> 00:25:18,199 Speaker 1: in fact in any industry working for us today in 430 00:25:18,240 --> 00:25:22,119 Speaker 1: New Zealand on this and we should have confidence that 431 00:25:22,680 --> 00:25:27,200 Speaker 1: the solutions that we come up with are enduring, the 432 00:25:27,280 --> 00:25:30,600 Speaker 1: right solutions are going to engage the right group of 433 00:25:30,640 --> 00:25:32,440 Speaker 1: stakeholders in the appropriate way. 434 00:25:32,720 --> 00:25:35,080 Speaker 2: Greg, the New Zealand economy has been someone in the 435 00:25:35,160 --> 00:25:39,360 Speaker 2: dull drums. It's common knowledge, but there are some green shoots. 436 00:25:39,880 --> 00:25:43,360 Speaker 2: Are you seeing any of that? In your commentary when 437 00:25:43,400 --> 00:25:47,720 Speaker 2: the earnings results were released, talked about some corporates, businesses 438 00:25:47,760 --> 00:25:50,560 Speaker 2: flying less and that obviously it had an impact. Are 439 00:25:50,560 --> 00:25:54,600 Speaker 2: you now or you seeing perhaps in quarters ahead that 440 00:25:54,600 --> 00:25:55,920 Speaker 2: that will change. 441 00:25:56,680 --> 00:26:00,720 Speaker 1: Look my sense at the moment, and this is a 442 00:26:00,840 --> 00:26:04,280 Speaker 1: judgment call, is that I think worried about the bottom 443 00:26:04,840 --> 00:26:09,040 Speaker 1: at this point and have been there for a few weeks, 444 00:26:09,560 --> 00:26:13,000 Speaker 1: not for months. You know, we see governments being down 445 00:26:13,040 --> 00:26:17,280 Speaker 1: about twenty eight We see small medium enterprises and corporates 446 00:26:17,359 --> 00:26:22,360 Speaker 1: down about ten to twelve percent. Leisure is holding up, 447 00:26:22,720 --> 00:26:27,919 Speaker 1: but you have to stimulate it so domestically it is tough. 448 00:26:28,920 --> 00:26:32,040 Speaker 1: But I think we're at the bottom, and usually what 449 00:26:32,200 --> 00:26:34,600 Speaker 1: happens is that you'll sit there for a period of 450 00:26:34,640 --> 00:26:36,280 Speaker 1: time and then recover. 451 00:26:37,160 --> 00:26:38,840 Speaker 2: Now you mean Christmas. 452 00:26:39,040 --> 00:26:42,199 Speaker 1: Your guess is as good as mine in terms of 453 00:26:42,240 --> 00:26:45,080 Speaker 1: when that will be and also what the slope of 454 00:26:45,119 --> 00:26:49,160 Speaker 1: that is going to be. Like, I'm not expecting it 455 00:26:49,200 --> 00:26:53,040 Speaker 1: to happen immediately, but maybe we get through Christmas, maybe 456 00:26:53,040 --> 00:26:56,720 Speaker 1: we get into next year, and people then start to 457 00:26:56,760 --> 00:26:59,200 Speaker 1: ease their way out of it. Now, I will say 458 00:26:59,240 --> 00:27:03,720 Speaker 1: that the decision to increase the IVL, the decision to 459 00:27:03,840 --> 00:27:10,240 Speaker 1: increase visas, are the costs that are coming through. You know, 460 00:27:10,320 --> 00:27:14,679 Speaker 1: the CIA are talking about costs. That doesn't help the 461 00:27:14,760 --> 00:27:18,639 Speaker 1: situation because about twenty percent year domestic business is fueled 462 00:27:18,680 --> 00:27:21,480 Speaker 1: by people flying into Auckland and jumping on a plane 463 00:27:21,480 --> 00:27:24,800 Speaker 1: to go to Queenstown or go to the vineyards in 464 00:27:25,040 --> 00:27:29,480 Speaker 1: Blenham or wherever. So you know, the headwinds are there 465 00:27:29,520 --> 00:27:33,400 Speaker 1: for a bit. But I am encouraged that it's bottomed 466 00:27:34,040 --> 00:27:38,640 Speaker 1: and in time, because it always does, people are going 467 00:27:38,640 --> 00:27:40,680 Speaker 1: to get out there and start spending. 468 00:27:40,920 --> 00:27:44,200 Speaker 2: Just looking now at some of the roots, I know, 469 00:27:44,320 --> 00:27:46,520 Speaker 2: India was one that you've mentioned and commentary in the 470 00:27:46,560 --> 00:27:49,119 Speaker 2: last few weeks and we have actually had some investor 471 00:27:49,200 --> 00:27:52,560 Speaker 2: questions asking when that might be a possibility. There's also 472 00:27:52,640 --> 00:27:57,040 Speaker 2: the US that's quite challenging, quite competitive. Are there other 473 00:27:57,080 --> 00:27:58,720 Speaker 2: things you can tell us about the roots that you're 474 00:27:58,720 --> 00:28:02,119 Speaker 2: looking at flying and and why would it be those ones? 475 00:28:02,320 --> 00:28:05,240 Speaker 1: Yeah, look, not a lot at this stage. And the 476 00:28:05,280 --> 00:28:07,520 Speaker 1: reason for that is that we just want to get 477 00:28:07,560 --> 00:28:10,000 Speaker 1: a little bit much, a little bit more sure when 478 00:28:10,840 --> 00:28:14,560 Speaker 1: aircraft are going to be available and what numbers. But 479 00:28:14,720 --> 00:28:17,159 Speaker 1: you know, look, it's fair to say a couple of things. 480 00:28:17,200 --> 00:28:20,399 Speaker 1: You know. One is you do want to grow your business, 481 00:28:21,200 --> 00:28:24,880 Speaker 1: because in a business like ours, is very hard unless 482 00:28:24,920 --> 00:28:29,080 Speaker 1: you've got some growth around. I'm doing some extra routes, 483 00:28:29,119 --> 00:28:32,800 Speaker 1: I've got some more seats on and et cetera. So 484 00:28:32,920 --> 00:28:35,480 Speaker 1: that's always top of mind. And you know, we sat 485 00:28:35,520 --> 00:28:37,160 Speaker 1: down and had a look at the five year plan, 486 00:28:38,320 --> 00:28:41,520 Speaker 1: you know, twenty four hours ago, and I like what 487 00:28:41,760 --> 00:28:44,880 Speaker 1: the team are pulling together there in terms of the 488 00:28:44,920 --> 00:28:50,360 Speaker 1: sort of growth that I'm seeing. I would say, also, 489 00:28:50,440 --> 00:28:53,080 Speaker 1: you want to be a little bit careful about trying 490 00:28:53,120 --> 00:28:58,360 Speaker 1: to expand too quickly because you're buying really expensive assets. 491 00:28:58,440 --> 00:29:02,520 Speaker 1: You need these planes to be operational A lot of 492 00:29:02,520 --> 00:29:04,800 Speaker 1: hours of the day in order to make money. But 493 00:29:04,920 --> 00:29:07,600 Speaker 1: there are always a few opportunities that you want to 494 00:29:07,600 --> 00:29:11,400 Speaker 1: look at. And you know, it makes common sense for 495 00:29:11,560 --> 00:29:15,479 Speaker 1: us to consider India at a point in time. Not 496 00:29:15,520 --> 00:29:18,480 Speaker 1: sure when at the stage, but you know, we get 497 00:29:18,480 --> 00:29:22,320 Speaker 1: a lot of traffic heading up to Singapore. A reasonable 498 00:29:22,320 --> 00:29:24,960 Speaker 1: amount of that traffic goes on to Europe, but a 499 00:29:25,000 --> 00:29:30,520 Speaker 1: surprising amount peels off and heads to many locations within India. 500 00:29:30,720 --> 00:29:33,360 Speaker 1: So that's something that we're going to continue to look at. 501 00:29:33,960 --> 00:29:36,400 Speaker 1: And then the other one that continues to be on 502 00:29:36,480 --> 00:29:40,520 Speaker 1: our mind from two aspects. You know, one of them 503 00:29:40,600 --> 00:29:44,720 Speaker 1: is getting back into Europe and you know would be 504 00:29:44,760 --> 00:29:49,080 Speaker 1: the most asked about route that I have. So when 505 00:29:49,240 --> 00:29:52,760 Speaker 1: people see me and want to engage with me, and 506 00:29:52,840 --> 00:29:57,160 Speaker 1: it's not because they lost their bag, it's usually about, hey, 507 00:29:57,960 --> 00:30:01,920 Speaker 1: what can we do about getting back to London, for example, 508 00:30:02,000 --> 00:30:05,040 Speaker 1: So it's a very asked about route. We stopped flying 509 00:30:05,080 --> 00:30:08,440 Speaker 1: there I think twenty nineteen, so you know, it's not 510 00:30:08,480 --> 00:30:10,560 Speaker 1: as easy as just saying well, let's just turn it 511 00:30:10,600 --> 00:30:13,800 Speaker 1: on and come once again. It's planes, it's all that stuff, 512 00:30:13,840 --> 00:30:16,400 Speaker 1: So we need to think carefully about that and when. 513 00:30:17,760 --> 00:30:20,480 Speaker 1: And then the other thing is a competitive nature of that. 514 00:30:21,440 --> 00:30:24,520 Speaker 1: You know, you just don't run your airline in isolation. 515 00:30:24,880 --> 00:30:28,720 Speaker 1: So you know, whether it's sovereign carriers coming in from 516 00:30:28,760 --> 00:30:32,400 Speaker 1: the Middle East or carriers from Australia, we need to 517 00:30:32,400 --> 00:30:34,959 Speaker 1: be very careful that we protect our market share, so 518 00:30:35,840 --> 00:30:37,720 Speaker 1: you know, we think about these things carefully. 519 00:30:38,960 --> 00:30:41,760 Speaker 2: Greg, you haven't given any guidance. You've said that things 520 00:30:41,760 --> 00:30:45,280 Speaker 2: are too uncertain, and the market for the most part 521 00:30:45,400 --> 00:30:49,880 Speaker 2: has accepted that. For retail investors, though, what would you 522 00:30:49,920 --> 00:30:52,400 Speaker 2: say to them when they're thinking about what they should 523 00:30:52,400 --> 00:30:55,680 Speaker 2: be doing with your portfolio in New Zealand? Might be 524 00:30:55,720 --> 00:30:57,760 Speaker 2: an emotional by it might not be though too. I mean, 525 00:30:58,120 --> 00:31:02,000 Speaker 2: how would they prudently cees what's going on without guidance? 526 00:31:04,160 --> 00:31:06,800 Speaker 1: Yeah, I think you've got to listen to these sort 527 00:31:06,840 --> 00:31:10,560 Speaker 1: of podcasts and hear it from from people like myself 528 00:31:10,600 --> 00:31:13,960 Speaker 1: and others, and then test the experience when you fly. 529 00:31:14,760 --> 00:31:18,320 Speaker 1: So so I'll give you some examples. You know, the 530 00:31:18,400 --> 00:31:23,120 Speaker 1: headwinds that we're spoken about around fleet, around the domestic economy, 531 00:31:23,600 --> 00:31:29,880 Speaker 1: around you know, the added cost and the complexity particularly 532 00:31:29,960 --> 00:31:32,320 Speaker 1: around fleet that get added into the business. You've got 533 00:31:32,360 --> 00:31:34,360 Speaker 1: to put some more people in the call center, You've 534 00:31:34,360 --> 00:31:38,400 Speaker 1: got to deal with more disruption, you've got to change 535 00:31:38,440 --> 00:31:41,000 Speaker 1: twice as many engines, which is what we're doing at 536 00:31:41,040 --> 00:31:44,520 Speaker 1: the moment. And then you know the competition that's coming 537 00:31:44,520 --> 00:31:47,440 Speaker 1: out of the US, which is about fifty two percent 538 00:31:47,520 --> 00:31:50,560 Speaker 1: more seats than what we've traditionally seen, so so not 539 00:31:50,920 --> 00:31:55,600 Speaker 1: five percent more seats, fifty So you have to say 540 00:31:55,600 --> 00:31:59,160 Speaker 1: to yourself, Okay, so I understand those are some of 541 00:31:59,200 --> 00:32:02,200 Speaker 1: the fact is that you're dealing with an Air New Zealand. 542 00:32:02,240 --> 00:32:04,520 Speaker 1: You know, you've got fleet, you got domestic, and you've 543 00:32:04,520 --> 00:32:07,920 Speaker 1: got some increased competition out of the US. Okay, I 544 00:32:08,000 --> 00:32:11,800 Speaker 1: understand that. Now what am I seeing and feeling about 545 00:32:12,000 --> 00:32:14,120 Speaker 1: Air New Zealand as a business? You know, what are 546 00:32:14,160 --> 00:32:16,680 Speaker 1: the things that would want to encourage me? What's it 547 00:32:16,760 --> 00:32:19,240 Speaker 1: like when I ring the call center? Am I getting 548 00:32:19,240 --> 00:32:22,880 Speaker 1: through pretty quickly? Are they able to solve problems with speed? 549 00:32:22,920 --> 00:32:25,040 Speaker 1: Am I able to solve more problems because I now 550 00:32:25,080 --> 00:32:28,440 Speaker 1: have a new app on my phone? How quickly and 551 00:32:28,480 --> 00:32:32,200 Speaker 1: efficiently are things working? So you make those calls and 552 00:32:32,280 --> 00:32:37,000 Speaker 1: you say to yourself, the headwinds are the headwinds realistically? 553 00:32:37,040 --> 00:32:40,720 Speaker 1: How long are they going to stay as those start 554 00:32:40,760 --> 00:32:43,880 Speaker 1: to dissipate, which they will all of them at a 555 00:32:43,920 --> 00:32:46,960 Speaker 1: point in time. Is this a business which is well 556 00:32:47,200 --> 00:32:50,360 Speaker 1: positioned to grow? And I would say to you the 557 00:32:50,400 --> 00:32:55,640 Speaker 1: answer is yes. We're building an airline here that is 558 00:32:55,760 --> 00:33:00,560 Speaker 1: going to be built to last, so I have complete 559 00:33:00,600 --> 00:33:03,880 Speaker 1: confidence in it. And I don't say that in a 560 00:33:03,920 --> 00:33:06,680 Speaker 1: misguided way. For sure, I'd like the profit to be 561 00:33:06,720 --> 00:33:09,200 Speaker 1: a bit better, but I can explain why it is, 562 00:33:10,280 --> 00:33:13,680 Speaker 1: and we're not about just putting the fares up to 563 00:33:13,920 --> 00:33:16,120 Speaker 1: cover some of those issues. We've tried to be very 564 00:33:16,160 --> 00:33:21,400 Speaker 1: balanced about that. We're making good decisions on fleet, We're 565 00:33:21,400 --> 00:33:24,760 Speaker 1: working hard to continue to improve the product. So I've 566 00:33:24,760 --> 00:33:27,080 Speaker 1: got a lot of confidence in New Zealand. 567 00:33:34,200 --> 00:33:36,760 Speaker 2: Thanks everyone for tuning in. You can watch Shared Lunch 568 00:33:36,840 --> 00:33:40,760 Speaker 2: on YouTube or follow the podcast wherever you get your podcasts. 569 00:33:41,120 --> 00:33:42,960 Speaker 2: Leave us a rating and tell us what you'd like 570 00:33:43,040 --> 00:33:50,760 Speaker 2: to hear next. 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