New Air New Zealand boss starts in ‘interesting times’

January 31, 2020
Air New Zealand
Air New Zealand CEO Gereg Foran. Photo: Air New Zealand

Greg Foran has much to live up to when he officially takes the reins at Air New Zealand on February 3 after ticking off what chairman Dame Therese Walsh describes as “a long shopping list” to qualify for the job.

He has the advantage that Air New Zealand management under acting chief executive Jeff McDowall had already been ably dealing with existing challenges such as the impact on demand of a testy global economy and Rolls-Royce engine problems on the airline’s Boeing 787 fleet.

But add a SARS-like global health emergency that saw the Kiwi carrier this week temporarily reduce its Auckland-Shanghai service from daily to four services per week and Foran is entering the airline in what the Chinese call “interesting times”.

The impact in the new coronavirus has yet to be seen but if it follows the path of the SARS epidemic, Asian routes will be hard hit and airline profits will suffer globally.

READ: Coronavirus compared to SARS and will dent travel.

Foran will start his new job with a 100-day business review designed to inform his thinking on the airline’s future strategic direction.

He has been talking with senior executives and will seek the views of about 1200 other leaders within the airline

He is expected to “align” with the airline’s board on strategic direction mid-year so the plans can be articulated in the annual results.

His appointment in October came after a global search in which the Air New Zealand board had strong ideas about what it required of its next CEO.

There were obvious qualifications such as leadership experience and Foran has plenty of that.

The Kiwi expatriate was named as CEO in October and has been working as the president and chief executive of Walmart US, where he was responsible for the strategic direction of the retail company’s 4600 stores and more than 1 million staff.

He took up the role in 2014 and led a transformation of the business based on Walmart’s everyday low price, low-cost principle that saw the company achieve multiple quarters of sales growth.

He is credited with making the stores cleaner and easier to shop and investing heavily in cutting costs on everyday items.

But Walsh told AirlineRatings late last year that there was a long list of other requirements for the person chosen to lead an airline so integrated with New Zealand tourism and the national identity.

Being a New Zealander was an advantage but Walsh said the board had been prepared to look at an outsider “who had had a strong connection or empathy with being a Kiwi”.

This was because “our New Zealandness is what differentiates our brand,” she said.

“So we wanted that to be palpable, obvious, but we didn’t want to say it had to be a Kiwi, because that was getting too specific.

“And even if they were Kiwi, they still needed to feel that deep connection and passion for the brand.

“There’s something a little more than just a profit-making organization at stake here. It’s very much a national organization that people feel they have ownership of.”

Also on the list, according to Walsh, was “down-to-earth humbleness” as well as a leader who was “curious and commercial”.

“We are in a phase where we have to be deeply commercial and we really need to be thinking about everything we do both from a revenue point of view and a cost perspective,’’ she said.

“We’re just at that part of the cycle where you take a laser-like look at everything and think about it.

“That was a long shopping list of things we were looking for. Greg ticked most of those boxes, if not all of those boxes.”

Walsh expects that Foran, who has been in the handover phase with McDowall,  will hit the ground running as he becomes the latest leader of an airline that rose from the ashes of the Ansett debacle to punch well above its weight on the global stage.

Each of Foran’s predecessors has put their own stamp on Air New Zealand.

Ralph Norris restructured the airline after it had been thrown a lifeline by the New Zealand government in the wake of it’s the disastrous attempt to take over Ansett and put it back on a commercial footing.

Rob Fyfe added pizzazz, improving the flying experience, boosting the culture and making Air New Zealand an innovative carrier watched closely by its peers.

Christopher Luxon pursued an international expansion that included a Pacific Rim strategy and further changes to the business culture.

Walsh believes the next phase under Foran will include aspects of the previous phases.

She said it was critically important that the airline remained on a commercial footing but it was also critical that it identified contemporary issues such as climate change.

“It’s really important that we have customer-facing propositions that are innovative and contemporary and all of those things,’’ she said

“All of those phases that we’ve been through in terms of building up the special organization that Air New Zealand is, really all come together now.

“You could call the phases different things, you could call them the consolidation phase, the customer phase, the commercial phase, the restructure phase.

“Well this is kind of the consolidation phase of all of those things.”

Steve Creedy traveled to Seoul courtesy of Air New Zealand