1 00:00:00,160 --> 00:00:02,880 Speaker 1: Tough times for Air New Zealand. Net profit after tax 2 00:00:02,960 --> 00:00:05,120 Speaker 1: was down sixty five percent on last year to just 3 00:00:05,200 --> 00:00:07,760 Speaker 1: under one hundred and fifty million dollars, and earnings before 4 00:00:07,800 --> 00:00:10,480 Speaker 1: tax came in at less than half what it was 5 00:00:10,480 --> 00:00:13,680 Speaker 1: the previous year. Greg for is Air New Zealand's chief executive. Hey, Greg, 6 00:00:13,840 --> 00:00:15,680 Speaker 1: hi there, Why are you guys doing so much worse 7 00:00:15,680 --> 00:00:16,520 Speaker 1: than quantus? 8 00:00:17,880 --> 00:00:20,000 Speaker 2: Well, it's all relative to what you're dealing with at 9 00:00:20,000 --> 00:00:22,080 Speaker 2: the time. Is then easy answer to that? 10 00:00:22,120 --> 00:00:23,680 Speaker 1: What are you dealing with that they're not dealing with? 11 00:00:23,840 --> 00:00:26,119 Speaker 2: Well, they don't have the same engines on their planes 12 00:00:26,120 --> 00:00:28,960 Speaker 2: that we do. And interestingly, at the moment, if you 13 00:00:29,000 --> 00:00:31,520 Speaker 2: have a very new fleet, it's actually a bit of 14 00:00:31,560 --> 00:00:35,080 Speaker 2: a disadvantage. So the older planes we've got, we're not 15 00:00:35,120 --> 00:00:38,080 Speaker 2: having to take engines off and get them all serviced, 16 00:00:38,120 --> 00:00:41,640 Speaker 2: but the newer ones we did. Engine issue start well 17 00:00:41,640 --> 00:00:44,760 Speaker 2: initially with the Trent you go back to about twenty seventeen, 18 00:00:44,840 --> 00:00:47,640 Speaker 2: but the decision to put the Trent Rolls Royce was 19 00:00:47,680 --> 00:00:50,440 Speaker 2: made in two thousand and four. We put it on 20 00:00:50,479 --> 00:00:51,760 Speaker 2: the first of the Dreamliners. 21 00:00:52,120 --> 00:00:55,560 Speaker 1: In the last financial year as well, it's got worse 22 00:00:55,280 --> 00:00:57,120 Speaker 1: because they had a better year than you last year 23 00:00:57,120 --> 00:00:58,920 Speaker 1: as well. It feels like it's developing into a passage. 24 00:00:59,000 --> 00:01:01,560 Speaker 2: Well, the other thing that's happened, Heather, is that it's 25 00:01:01,600 --> 00:01:04,319 Speaker 2: not just a trend engine. We're now dealing with six 26 00:01:05,240 --> 00:01:08,000 Speaker 2: Pratt and Whitneys which go on our very good air 27 00:01:08,000 --> 00:01:11,200 Speaker 2: bus fleet. So right today we've actually got ten planes 28 00:01:11,319 --> 00:01:14,199 Speaker 2: or a billion dollars worth of capital that we're trying 29 00:01:14,200 --> 00:01:14,720 Speaker 2: to get engines. 30 00:01:15,000 --> 00:01:17,000 Speaker 1: I can tell me the whole thing is pinned on 31 00:01:17,040 --> 00:01:17,560 Speaker 1: the engines. 32 00:01:18,720 --> 00:01:21,160 Speaker 2: The other things that we deal with it are a 33 00:01:21,160 --> 00:01:23,880 Speaker 2: bit different. You know, the economy in Australia is a 34 00:01:23,920 --> 00:01:26,600 Speaker 2: bit different than New Zealand at the moment. So that's 35 00:01:26,600 --> 00:01:30,000 Speaker 2: the second thing. So we're seeing, for example, government spends 36 00:01:30,080 --> 00:01:33,560 Speaker 2: minus twenty eight percent, no surprises on that. And then 37 00:01:33,600 --> 00:01:36,280 Speaker 2: the third thing that's a bit different is that we've 38 00:01:36,280 --> 00:01:40,080 Speaker 2: got about a fifty two percent increase in capacity from 39 00:01:40,200 --> 00:01:43,720 Speaker 2: USA Alliance flying in here. So when you add all 40 00:01:43,760 --> 00:01:48,320 Speaker 2: of those things up, to be honest, it's worth probably 41 00:01:48,360 --> 00:01:49,360 Speaker 2: a couple one hundred. 42 00:01:49,120 --> 00:01:51,200 Speaker 1: Million dollars break out of this, like can you actually 43 00:01:51,200 --> 00:01:51,880 Speaker 1: beat this stuff? 44 00:01:51,960 --> 00:01:55,000 Speaker 2: For sure? And the reason the reason I say that 45 00:01:55,160 --> 00:01:58,040 Speaker 2: is that the fleet stuff does come right. You know, 46 00:01:58,120 --> 00:02:01,240 Speaker 2: the supply chain gets all and the economy everyone gets right. 47 00:02:01,360 --> 00:02:03,480 Speaker 2: The economy comes right, so that will run. 48 00:02:03,720 --> 00:02:05,840 Speaker 1: Come you deal with your competitive stuff, the fact that 49 00:02:05,880 --> 00:02:07,760 Speaker 1: you have got this competition issue now. 50 00:02:08,200 --> 00:02:10,760 Speaker 2: The same way you deal with any competitor. You ensure 51 00:02:10,800 --> 00:02:13,800 Speaker 2: that what you're delivering for your customers and your staff 52 00:02:14,120 --> 00:02:17,760 Speaker 2: is superior. So, you know, give us a couple of months, 53 00:02:17,840 --> 00:02:21,560 Speaker 2: we'll have a retrofit completed. We should have nine completed 54 00:02:21,600 --> 00:02:23,440 Speaker 2: next year, and then we've got a product on our 55 00:02:23,520 --> 00:02:26,400 Speaker 2: Dreamliners which you combine with the Air New Zealand service. 56 00:02:26,720 --> 00:02:30,560 Speaker 2: I'll stack that up against anyone. Yeah, you know, anyone 57 00:02:30,600 --> 00:02:34,960 Speaker 2: from Australia, anyone from the US, and I'll tell you 58 00:02:34,960 --> 00:02:37,600 Speaker 2: we'll deliver a fantastic experience for our customers. 59 00:02:37,760 --> 00:02:40,040 Speaker 1: Let's talk about the customer experience, right, which is what 60 00:02:40,080 --> 00:02:42,560 Speaker 1: you say would be your competitive advantage. The trouble I 61 00:02:42,600 --> 00:02:44,400 Speaker 1: see it at the moment is that the ticket price 62 00:02:44,480 --> 00:02:46,240 Speaker 1: is are driving customers away, aren't they? I mean, you 63 00:02:46,240 --> 00:02:48,840 Speaker 1: see Jetstar doing really well in the last financial year, 64 00:02:48,840 --> 00:02:50,680 Speaker 1: which has got to be a straight switch from more 65 00:02:50,720 --> 00:02:53,400 Speaker 1: expensive airlines to them. So and your tickets are going 66 00:02:53,440 --> 00:02:54,400 Speaker 1: to go up again, aren't they. 67 00:02:54,520 --> 00:02:57,400 Speaker 2: Yeah, of course, what you're seeing is you're seeing combined results. 68 00:02:57,440 --> 00:03:01,040 Speaker 2: You're not seeing Jetstar necessarily separate rated out between the 69 00:03:01,080 --> 00:03:03,480 Speaker 2: two areas. What I'll tell you about New. 70 00:03:03,520 --> 00:03:06,160 Speaker 1: Zealand, the earnings have gone up twenty three percent. 71 00:03:06,040 --> 00:03:08,400 Speaker 2: And combined, that's combined Australia. 72 00:03:08,600 --> 00:03:10,359 Speaker 1: Oh yeah, I see what you mean, Ossie and using 73 00:03:10,840 --> 00:03:12,280 Speaker 1: So let's let's. 74 00:03:12,040 --> 00:03:14,119 Speaker 2: Talk about the market that we operating, because we don't 75 00:03:14,120 --> 00:03:18,800 Speaker 2: operate domestically. Actually, our prices are down. So I know 76 00:03:19,080 --> 00:03:21,800 Speaker 2: a lot of people on last year, Oh how it 77 00:03:21,800 --> 00:03:25,720 Speaker 2: happen because what we're seeing is is no, what you're 78 00:03:25,720 --> 00:03:28,519 Speaker 2: seeing is actually a softer market domestically all the reasons 79 00:03:28,520 --> 00:03:30,160 Speaker 2: that we just spoke about. Yeah, so you know, I 80 00:03:30,200 --> 00:03:33,800 Speaker 2: was looking at the numbers for July, so July this 81 00:03:33,880 --> 00:03:36,320 Speaker 2: year July last year. We're down three to four four 82 00:03:37,040 --> 00:03:41,320 Speaker 2: domestically on both turboprops and jets. Same thing actually across 83 00:03:41,320 --> 00:03:45,320 Speaker 2: the Tasman and same thing on international. So pricing actually 84 00:03:45,600 --> 00:03:47,800 Speaker 2: has come down, and that's one of the reasons that 85 00:03:47,840 --> 00:03:49,840 Speaker 2: we're seeing, you know, a weaker profit result. 86 00:03:50,000 --> 00:03:52,040 Speaker 1: Do you interspate having to put the prices up again? 87 00:03:53,000 --> 00:03:56,240 Speaker 2: Look, so much of that is dependent on demand, So 88 00:03:56,680 --> 00:04:01,000 Speaker 2: you know, if the American airlines don't come next year 89 00:04:01,040 --> 00:04:03,360 Speaker 2: at the same level they are now. And you've just 90 00:04:03,400 --> 00:04:05,960 Speaker 2: heard me say they're they're up fifty two percent on 91 00:04:06,040 --> 00:04:08,400 Speaker 2: where they were previously. That's a lot of extra seats. 92 00:04:08,960 --> 00:04:11,360 Speaker 2: Then generally what happens is you'll start to see some 93 00:04:11,400 --> 00:04:15,280 Speaker 2: movement in pricing. At the moment, traffic between China and 94 00:04:15,320 --> 00:04:17,800 Speaker 2: the US is still only operating at twenty five percent 95 00:04:17,800 --> 00:04:21,680 Speaker 2: pre COVID, so there's some spare planes around. So you know, 96 00:04:21,839 --> 00:04:24,599 Speaker 2: pricing moves around a bit. It's always hard to pick 97 00:04:24,640 --> 00:04:27,880 Speaker 2: where it's going. But look, I'm pretty comfortable with where 98 00:04:27,880 --> 00:04:30,720 Speaker 2: we're sitting at the moment. There is a good reason, 99 00:04:31,040 --> 00:04:33,560 Speaker 2: a good set of reasons as to why our numbers 100 00:04:33,600 --> 00:04:36,720 Speaker 2: are what they are and other airlines aren't. Not all 101 00:04:36,800 --> 00:04:39,760 Speaker 2: airlines are operating the same planes, Not all of them 102 00:04:39,760 --> 00:04:41,839 Speaker 2: are operating in the same economy. 103 00:04:41,960 --> 00:04:43,440 Speaker 1: Not all of. 104 00:04:43,400 --> 00:04:45,479 Speaker 2: Them are dealing with competition. 105 00:04:45,160 --> 00:04:48,000 Speaker 1: And three recessions in two years. On the other thing 106 00:04:48,000 --> 00:04:50,760 Speaker 1: about customer experience, Are you as excited as I am 107 00:04:50,839 --> 00:04:53,279 Speaker 1: about being forced to report your on time performance to 108 00:04:53,320 --> 00:04:53,799 Speaker 1: the government. 109 00:04:53,880 --> 00:04:54,520 Speaker 2: We already do. 110 00:04:54,880 --> 00:04:56,240 Speaker 1: You reported on your website. 111 00:04:56,279 --> 00:04:58,520 Speaker 2: Absolutely, and it's not really marrible. 112 00:04:58,160 --> 00:05:01,960 Speaker 1: With jet staff. The comparison. But are you excited about 113 00:05:01,960 --> 00:05:02,679 Speaker 1: this totally? 114 00:05:03,400 --> 00:05:05,839 Speaker 2: By the wise a rocket And by the way, well, 115 00:05:06,000 --> 00:05:08,480 Speaker 2: actually it won't because I already see it, because I 116 00:05:08,520 --> 00:05:11,279 Speaker 2: already see the numbers, Heather, So I know exactly what 117 00:05:11,279 --> 00:05:11,719 Speaker 2: the numbers. 118 00:05:11,960 --> 00:05:13,680 Speaker 1: You've got to do better, though you can't tell me 119 00:05:13,720 --> 00:05:14,719 Speaker 1: you're not going to do better. 120 00:05:14,920 --> 00:05:17,800 Speaker 2: We always do better, Heather, He don't, and that is 121 00:05:17,880 --> 00:05:21,039 Speaker 2: exactly what we do. We actually improved on time performance 122 00:05:21,120 --> 00:05:21,599 Speaker 2: last year. 123 00:05:21,640 --> 00:05:23,760 Speaker 1: You might have done, but you still have a situation 124 00:05:23,839 --> 00:05:26,480 Speaker 1: where as many as one in five of your flights 125 00:05:26,680 --> 00:05:29,320 Speaker 1: are running later than fifteen minutes. That's unacceptable. 126 00:05:29,680 --> 00:05:32,440 Speaker 2: That's why we're working hard to improve it. But it's 127 00:05:32,440 --> 00:05:35,760 Speaker 2: ahead of our actual competitor. So I see those numbers. 128 00:05:35,800 --> 00:05:37,960 Speaker 2: I'm not concerned if they're public. As I said, they 129 00:05:38,000 --> 00:05:41,160 Speaker 2: already are, and I welcome that. And here's the other 130 00:05:41,240 --> 00:05:45,200 Speaker 2: thing that we do. We are incredibly diligent around safety. 131 00:05:45,480 --> 00:05:48,600 Speaker 2: So I won't compromise on time performance ever for safety. 132 00:05:48,960 --> 00:05:50,919 Speaker 2: And one of the things that I have to acknowledge 133 00:05:51,000 --> 00:05:54,240 Speaker 2: is a fantastic job that our people do dealing with 134 00:05:54,279 --> 00:05:58,560 Speaker 2: these fleet issues. Heather has us doing many will let. 135 00:05:58,400 --> 00:06:00,280 Speaker 1: Me finish it, but you're doing a diversion to because 136 00:06:00,279 --> 00:06:01,960 Speaker 1: I want to talk about it on time performance because 137 00:06:02,000 --> 00:06:04,520 Speaker 1: here's the problem, Greg, is that it feels a little 138 00:06:04,520 --> 00:06:06,640 Speaker 1: bit like you guys take us for granted because we're 139 00:06:06,720 --> 00:06:08,719 Speaker 1: so loyal to you that if you're an hour late, 140 00:06:08,760 --> 00:06:10,760 Speaker 1: we just have to put up with it. Well, is 141 00:06:10,800 --> 00:06:11,599 Speaker 1: that what's going on? 142 00:06:11,680 --> 00:06:13,120 Speaker 2: I'm going to finish and then I'm going to deal 143 00:06:13,160 --> 00:06:13,360 Speaker 2: with that. 144 00:06:13,360 --> 00:06:14,839 Speaker 1: Okay, can you finish? And then okay? 145 00:06:16,040 --> 00:06:17,800 Speaker 2: One of the things our engineers are having to do, 146 00:06:17,839 --> 00:06:20,159 Speaker 2: and they're doing a fantastic job in an engineering and mating, 147 00:06:20,160 --> 00:06:22,200 Speaker 2: so they're having to do twice as many engine changes 148 00:06:22,240 --> 00:06:26,000 Speaker 2: at the moment, So they're working really hard to keep 149 00:06:26,000 --> 00:06:28,440 Speaker 2: this fleet going. When you got tenty your best plane 150 00:06:28,560 --> 00:06:32,120 Speaker 2: sitting on the ground, you can't fly on time. Performance 151 00:06:32,360 --> 00:06:35,400 Speaker 2: is as important to us as it is to a customer, 152 00:06:35,880 --> 00:06:38,400 Speaker 2: because if you think about it, this whole thing is 153 00:06:38,440 --> 00:06:40,919 Speaker 2: a network and a schedule. Yes, the same reason that 154 00:06:41,200 --> 00:06:44,840 Speaker 2: I hate cancelations, I really do because you end up 155 00:06:44,839 --> 00:06:46,760 Speaker 2: with the plane and the crew and the wrong places. 156 00:06:47,080 --> 00:06:50,200 Speaker 2: So it doesn't suit us to not operate like a 157 00:06:50,240 --> 00:06:53,159 Speaker 2: Swiss watch. Now, we'll always do it with safety, and 158 00:06:53,240 --> 00:06:56,039 Speaker 2: I can tell you it is a key priority we 159 00:06:56,160 --> 00:06:58,400 Speaker 2: just don't talk about it. We've got lots of tools 160 00:06:58,440 --> 00:07:00,760 Speaker 2: out now out there now that we're doing to help 161 00:07:00,800 --> 00:07:02,839 Speaker 2: improve the performance, and it has improved. 162 00:07:03,080 --> 00:07:04,719 Speaker 1: And do you think that when you are doing a 163 00:07:04,720 --> 00:07:08,080 Speaker 1: straight comparison with Jetstar to MB who's going to publish 164 00:07:08,080 --> 00:07:10,480 Speaker 1: this stuff, that you will win every single time? 165 00:07:11,120 --> 00:07:13,400 Speaker 2: I can tell you that over the last twelve months. 166 00:07:13,480 --> 00:07:16,920 Speaker 2: I think we have run one eight times in the 167 00:07:17,000 --> 00:07:18,040 Speaker 2: last twelve months. 168 00:07:18,160 --> 00:07:22,200 Speaker 1: Okay, and you'll see that I see most of the time. Yeah, okay. 169 00:07:22,600 --> 00:07:25,679 Speaker 1: Are you Are you of the view which which grant 170 00:07:25,680 --> 00:07:28,600 Speaker 1: from tourism holdings hold, which is that if the government 171 00:07:28,640 --> 00:07:30,840 Speaker 1: puts up the charges of the visas, we are going 172 00:07:30,880 --> 00:07:34,280 Speaker 1: to actually repel some tourists. 173 00:07:34,680 --> 00:07:37,280 Speaker 2: I'm of the view that and I've learned this over 174 00:07:37,360 --> 00:07:41,440 Speaker 2: many years as a retailer that generally the higher the prices, 175 00:07:41,560 --> 00:07:43,760 Speaker 2: the less demand. There is few light time. 176 00:07:43,880 --> 00:07:44,880 Speaker 1: So are you worried about that? 177 00:07:45,680 --> 00:07:49,600 Speaker 2: I am, And I would say it's concerning, and it's 178 00:07:49,680 --> 00:07:52,360 Speaker 2: it's not just you know, visas, and we've seen what's 179 00:07:52,400 --> 00:07:55,800 Speaker 2: happened there. There's discussions around the iv L. We've seen 180 00:07:56,040 --> 00:07:58,760 Speaker 2: you CIA come out in the last few days and say, hey, 181 00:07:58,800 --> 00:08:01,760 Speaker 2: we haven't moved prices twenty sixteen, so you know, we 182 00:08:01,840 --> 00:08:03,400 Speaker 2: need to move on this, and we need to move 183 00:08:03,440 --> 00:08:07,600 Speaker 2: on that. And we've spoken previously about airport costs and 184 00:08:07,720 --> 00:08:11,360 Speaker 2: countering and all those things. The reality is, individually each 185 00:08:11,400 --> 00:08:14,880 Speaker 2: can be justified. Collectively, you could be talking three to 186 00:08:14,960 --> 00:08:18,760 Speaker 2: four hundred dollars more for someone internationally if they've got 187 00:08:18,760 --> 00:08:22,000 Speaker 2: to get a vent, all the other family right to 188 00:08:22,080 --> 00:08:24,160 Speaker 2: come in. Yeah, what's that going to do. It's going 189 00:08:24,200 --> 00:08:25,040 Speaker 2: to suppress demand. 190 00:08:25,320 --> 00:08:27,160 Speaker 1: Okay, smart, not a smart idea. 191 00:08:28,120 --> 00:08:30,400 Speaker 2: I think you've got to be really cautious. And I 192 00:08:30,440 --> 00:08:32,920 Speaker 2: don't think it's as simple as saying we're going to 193 00:08:32,920 --> 00:08:35,199 Speaker 2: do nothing. But I think you have to look at 194 00:08:35,200 --> 00:08:38,920 Speaker 2: the system as a whole and you need to say, collectively, 195 00:08:39,160 --> 00:08:42,320 Speaker 2: this is going to cause X amount of drop off 196 00:08:42,320 --> 00:08:44,720 Speaker 2: in demand or Y amount of drop off in demand, 197 00:08:44,840 --> 00:08:48,640 Speaker 2: and then try and thread that needle. My concern at 198 00:08:48,640 --> 00:08:50,240 Speaker 2: the moment is that if you're doing it in a 199 00:08:50,240 --> 00:08:55,199 Speaker 2: piecemeal fashion, each individual component can be justified, but the 200 00:08:55,640 --> 00:08:59,080 Speaker 2: whole is not going to be palatable. So I am 201 00:08:59,120 --> 00:08:59,920 Speaker 2: concerned about that. 202 00:09:00,040 --> 00:09:04,240 Speaker 1: Okay, me too. One other thing, do you think that 203 00:09:04,280 --> 00:09:06,400 Speaker 1: we should limit the number of drinks at the airports? 204 00:09:06,400 --> 00:09:06,760 Speaker 1: To two. 205 00:09:08,640 --> 00:09:13,520 Speaker 2: I can tell you that we in Air New Zealand 206 00:09:13,640 --> 00:09:17,480 Speaker 2: do a pretty good job of controlling what people are drinking. 207 00:09:17,760 --> 00:09:20,080 Speaker 2: But what if they jump in the in the in 208 00:09:20,120 --> 00:09:23,200 Speaker 2: the carou club, Well, our staff deal with that and 209 00:09:23,240 --> 00:09:25,400 Speaker 2: they and they deal with that appropriate. And I saw 210 00:09:25,480 --> 00:09:27,280 Speaker 2: the I saw the article. 211 00:09:26,960 --> 00:09:28,959 Speaker 1: From is he going a bit far making it? 212 00:09:30,120 --> 00:09:32,240 Speaker 2: He's trying to make a point And I've met him 213 00:09:32,440 --> 00:09:34,880 Speaker 2: and and good on him for doing it. And Michael 214 00:09:34,920 --> 00:09:37,640 Speaker 2: O'Leary runs a fantastic business. 215 00:09:37,640 --> 00:09:39,840 Speaker 1: A different class of passenger, isn't he. Yeah? 216 00:09:39,960 --> 00:09:42,680 Speaker 2: And can I tell you what we see, for example, 217 00:09:42,679 --> 00:09:44,559 Speaker 2: on a flight to Balley is a bit different than 218 00:09:44,559 --> 00:09:47,160 Speaker 2: what you might get on a flight to La So 219 00:09:48,240 --> 00:09:51,480 Speaker 2: our team deal with it, and you know, if it's 220 00:09:51,520 --> 00:09:53,520 Speaker 2: an issue, we'll sit down and have a look at it. 221 00:09:53,840 --> 00:09:55,680 Speaker 2: I don't think we need to do it right now. 222 00:09:56,000 --> 00:09:57,880 Speaker 1: Fair enough, Greg, thank you very much, really appreciate a 223 00:09:57,880 --> 00:10:00,240 Speaker 1: Greek for him, Chief executive at a news you like. 224 00:10:00,880 --> 00:10:04,080 Speaker 1: For more from Hither Duplessy Allen Drive, listen live to 225 00:10:04,160 --> 00:10:07,199 Speaker 1: news Talks it'd be from four pm weekdays, or follow 226 00:10:07,240 --> 00:10:09,000 Speaker 1: the podcast on iHeartRadio.