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Air New Zealand’s new CEO sees growth prospects

June 19, 2012, Wellington, Nz. - Air New Zealand's new chief says the carrier's focus on passenger comfort makes him optimistic about growing revenue on international routes to Asia and North America despite the gloomy global economic outlook.


June 19, 2012
By Carey Fredericks

The airline announced Tuesday that Christopher Luxon will take over as chief executive in December, when current CEO Rob Fyfe retires. Luxon, a New Zealander, is former president and chief executive of Unilever's Canadian business. He joined the airline in May 2011 and has been managing its international arm.

"We're bullish about the whole of the Pacific rim,'' Luxon said in an interview with The Associated Press. "We think there's the potential for lots of growth.''

Air New Zealand is among the smaller international carriers, ranked 36th in size globally by the International Air Transport Association.

But Luxon, 41, said it's the airline's attention to detail — including fitting out aircraft to maximize passenger comfort and serving quality meals and fine wines — that makes it popular with passengers. It introduced the "cuddle class'' concept for economy cabins by adapting a three-seat configuration to extend into a sleeping platform for two adults and is selling the design to other airlines.

Airline review site Skytrax ranks Air New Zealand four stars out of a possible five for product and service. It named it the best airline in Australia and the Pacific in 2010 and 2011.

Majority owned by the government, the carrier earlier this year announced plans to reduce its staff of 11,500 by about 440 after recording a 71 per cent plunge in half-year profit. The airline blamed a weak global economy and the high cost of jet fuel for the result.

Still, the airline has weathered the economic downturn better than many rival carriers, including Australia's Qantas Airways Ltd., which recently announced large losses on its international business.

IATA estimates the global aviation industry will make a total profit this year of $3 billion, down sharply from last year, and warns that the forecast profit will evaporate if the global economy continues to deteriorate.

Luxon said Air New Zealand's Asian growth opportunities centre around Hong Kong, mainland China and Japan.

"We're quite ambitious about our plans to grow China,'' he said. "Japan's a very important market, too, and is starting to recover.''

Luxon said the company is looking to increase the frequency of existing routes to North America and is considering adding new destinations, although he wouldn't specify which cities he's considering.

Key to the company's growth are plans to add 10 Boeing 787-9 Dreamliner planes on Asian routes, Luxon said.

Air New Zealand is one of the first customers for the much-delayed plane, which promises greater fuel efficiency and passenger comfort. The airline is due to take delivery of its first Dreamliner in mid-2014.

"For sure we've been frustrated,'' with the delays, Luxon said, "But we remain big believers.''