Source: Radio New Zealand
Air New Zealand CEO Nikhil Ravishankar (left) says the airline was dealt ‘tough cards’ as Deputy Prime Minister David Seymour calls on the government to sell its stakes in the airline. RNZ/Supplied
Air New Zealand chief executive says the airline has been dealt ‘tough cards’ and New Zealand First leader Winston Peters says the government should be backing the airline’s future but the Deputy Prime Minister continues to question their priorities.
The airline’s CEO Nikhil Ravishankar is carrying out a strategic review in the face of rising costs and told Checkpoint the airline is designed to grow but that hasn’t happened.
“The airline is designed to grow and for the last six years, we haven’t been able to do that.”
This comes after Deputy Prime Minister David Seymour earlier renewed his call for the government to sell its 51 percent stake in Air New Zealand after it reported a significant half-year loss.
The national carrier posted a $40 million loss for the six months ended December compared to a $106 million profit for the same period the year before.
The airline is still blaming severe disruption caused by delays to unscheduled engine maintenance grounding up to eight planes, as well as fuel and operating costs.
Seymour told Checkpoint the airline has placed too much “emphasis on politics” and is not reliable or affordable.
“The drumbeat of frustration from New Zealanders who are saying, look, we’re generally frustrated with the idea that things don’t work and cost too much,”
“And it seems that its distractions into various political projects over the last few years has started to come home to roost.”
New Zealand First leader Winston Peters said in a social media post calls for the government to sell its shares in Air New Zealand while the airline market is in a downturn is economic lunacy.
Peters said the airline needs to start being on-time, and getting regional costs down. He said as the majority shareholder, the government should be backing its future rather than dragging it down, and hocking it off.
In response to the high costs of tickets Ravishankar said they are the result of increasing costs especially in fuel prices and engine maintenance.
However, Ravishankar told Checkpoint he was confident customers are not bearing the full weight of inflation when buying tickets.
“Since 2019 the cost that the airline bears has gone up north of 40 percent and our domestic airfares have gone up 32 percent.
“If you compare that with general CPI, general inflation, which has been around 29, 30 percent our fares have gone up a couple of percent over inflation, but our costs have gone up significantly more than that.”
When it came to Seymour’s comments that the airline was focusing on the wrong things such as electric planes and climate change reports, Ravishankar said he believed the airline was focused on the right things.
“It’s not distracting us from focusing on what’s important to our customers, which first and foremost is safe, reliable, and on-time performance, and that’s what we’re focused on delivering.”
“We are an airline that is globally extremely well-respected and people in the industry realise the tough cards we’ve been dealt.”
Ravishankar said matters of ownership were not for him to comment on as that was a question for the airline’s board.
Seymour has in turn said that many airlines have faced high costs and challenges especially after Covid.
“People are shopping around and finding that they can do better with the competitor… it seems that in the rest of the world, they have managed to navigate the challenges more competently.”
“And my charge is that if Air New Zealand was not distracted by its various projects of trying to become a biofuel producer, for example, they might be focussing more on taking off and landing on time.”
Ravishankar was currently carrying out a strategic review, which he said was drive by issues such as rising costs and falling profits.
“We need to tighten our belts and also in terms of looking into our capital management framework.”
Air New Zealand is also expecting to receive two of its 10 new 787 aircraft by the end of June, providing widebody capacity growth of 20-25 percent over the next two years.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
