Far from home, the teenager arrived at Auckland Airport.
It was spring, wet, when daily temperatures average 14C. It was usually much hotter in Nikhil Ravishankar’s home town of Bangalore, today’s Bengaluru, a city which even in the 1990s had hustle and a population in the millions.
On
the motorway, looking out the car, Ravishankar wondered where all the people were.
“I barely saw anyone on the roads, and I had this deep sense of loneliness actually when I first started a life here.”
For Ravishankar, aged 15, there was more change to confront when he started the sixth form at Mt Albert Grammar School.
He dressed different, sounded different, knew nobody in Auckland.
“But my saviour was sport. I was a pretty good cricketer. So as soon as summer rolled in and they figured out I could bowl a good offspin, I had mates. And so that helped me settle in.”
Now as Air New Zealand’s new chief executive, Ravishankar faces what he calls a looming existential crisis for the airline.
Air New Zealand is 51% state-owned, so all taxpayers have a stake in it. It is also a listed company, with more than 100,000 investors on Sharesies alone.
“This is an airline staffed by New Zealanders, it’s an airline owned by New Zealanders for New Zealanders,” Ravishankar says.
It is widely scrutinised for both relatively frivolous reasons, such as its polarising safety videos, and for serious reasons as the entity transporting more New Zealanders to the world than anybody else.
By conservative estimates, aviation in New Zealand employs about 177,000 people or more than 6% of the workforce.
Ravishankar previously had his own startup, building mobile TV apps on 2G networks. He worked in critical infrastructure and telcos, joined the technology consulting firm Accenture in Sydney, had a stint in Hong Kong, then was Vector’s chief digital officer.
If Ravishankar didn’t already know how crucial the sector was, a call from previous chief executive Greg Foran during the 2021 Delta lockdown made that clear.
When the airline called, Auckland was isolated from the rest of the country. The aviation sector’s future was murky. It was anyone’s guess when borders might reopen, how brutal the lockdown might be, when MIQ might end, and how vaccines and new Covid strains could play out.
“He quite simply said, as did the chair at the time, the team that joined to help rebuild was basically national service. The significance of aviation for New Zealand can’t ever be overstated. So much of the national GDP, somewhere between 14% to 16%, relies on aviation connectivity within the country.
“He said: Well, you’ve got to come and come and help us rebuild the business, because it is just important for the country.”
In May of 2022, the Government announced New Zealand’s borders would fully reopen from July 31 that year. But for the airline, the reopening and associated rebuilding had no precedents.
“Airlines were never designed to be switched off. There’s no on button, so the day we opened to the world post-Covid, it was really, really complicated to restart the airline,” Ravishankar says.
“About 70% of our workforce have either joined fresh or have rejoined the airline post-Covid.”
The airline had laid off more than 1300 cabin crew and 300 pilots in the pandemic’s first few months.
“A lot of institutional knowledge leaves the organisation when something like that happens, and it’s a very complicated business, so it takes a long time to get back into rhythm.”
Even after the borders reopened, there was the Auckland airport flooding and Cyclone Gabrielle in early 2023.
Then there are issues afflicting Rolls-Royce Trent 1000 engines on 787 Dreamliners and Pratt & Whitney PW1100G engines on the Airbus A320 and A321neo.
“A bit more of the sinister issue that’s crept into our world is the fact that the two engines we use on our narrowbody and widebody jets have both had major issues globally. And that’s just something that we could not have really planned for.”
Foran previously indicated discussions with Pratt & Whitney were going well but Rolls-Royce not so much. Rolls-Royce defended its actions, telling the Herald in June mitigating these problems was the top priority for its civil aerospace division.
“They’re in a difficult position as well,” Ravishankar says of the manufacturers.
“They’re not doing this to hurt Air New Zealand per se. They are dealing with significant challenges with their own rebuild.”
The industry has faced attrition and skills shortage issues. And just last week, Jarden and Forsyth Barr downgraded Air New Zealand after the airline said it expected a first-half pre-tax loss of $30-$55 million.
Ravishankar says the rebuild has involved retraining, and investing in infrastructure, new hangars, new ground service equipment, and digital infrastructure.
He says despite the many problems hobbling its recovery, the airline has strong foundations and is in a good position to seize the future.
But another issue, possibly more consequential than others, looms in the place he first arrived as a 15-year-old.
Airports
Earlier this month, the Commerce Commission ruled out a so-called Section 56G inquiry into airport regulation. Airports generally hailed the decision, saying it vindicated the current structure.
But Ravishankar says the watchdog made it clear more should be done to ensure airports act in the public interest.
The commission said: “We have undertaken a short, targeted review to examine whether current regulatory settings give confidence that major airport investment decisions promote the long-term benefit of consumers and found that there is more that could be done to achieve this.”
It’s that line he says is crucial.
“This last financial year we’ve spent $265 million on landing charges, and that’s about 4% of our revenue. By 2032, we will spend about $730m on landing charges, and that’s about 8% of our revenue. At that point it’s an existential crisis for Air New Zealand and it will substantially impact demand across the country. Fewer people will be able to afford to travel at that point.”
If Auckland Airport were here in the Air NZ boardroom to defend itself, it would likely argue the money it’s spending is on critical infrastructure for the country’s long-term wealth and resilience.
But Ravishankar says current rules assume there are two countervailing powers – one airport and one big powerful airline.
“Unfortunately, the way the rules are set, Auckland Airport only have to consult with us, and if I say, look, this can be problematic, can we look at an alternate path, they don’t have to do anything at that point because they’ve consulted with us.”
He says the commission is hamstrung because, basically, the game is rigged.
“The way the rules are set, they don’t really have the ability to exercise that threat of additional regulation, so the two countervailing powers that are meant to keep things in check aren’t actually effectively working today.”
But if this is such a problem for Ravishankar, why not just pick up the phone and give current Auckland Airport chief executive and former Air NZ chief operating officer Carrie Hurihanganui a call to work things out?
“Carrie and I are starting to sit together now and work out how can we navigate this bilaterally to find the right answer for New Zealand,” Ravishankar says.
“The central theme should be what is in the best interests of the country, and then we all should work out how we then contribute to that answer.”
The commission this month said some targeted changes to the Commerce Act could enable a more proportionate regulatory response, letting it target one airport or issue without needing to run the whole price-setting event at Auckland, Wellington and Christchurch airports.
Cleaning up
Even if airport pricing disputes get resolved, another challenge confronts the sector.
The world’s airlines have committed to a net-zero carbon emission goal by 2050. Sustainable aviation fuel (Saf), electric aircraft, carbon offsetting and even combatting contrails have all been cited as possible solutions to global warming, or the dangers of relying on fossil fuel, or being at the whims of volatile fuel prices.
“My background is in science, and so I come from a sort of technical bent,” the new CEO says.
“It’s worth noting that decarbonising aviation is at the really wicked end of the decarbonisation problem set. It’s not easy and a lot of these issues we’ve been discussing today are wicked problems.“
He says between now and 2050, Saf will have to be a fairly big part of the formula for decarbonising aviation.
But don’t bet on the airline setting up its own refinery or Saf production centre.
“We’re an airline. We don’t have the competency you need to be a refiner of fuel or sourcer of feedstock and an asset manager of a complex estate like that. We’ll play in position.”
And that will have to be in collaboration with fuel producers, here or overseas.
At home, Ravishankar has already generated feedback for suggesting regional routes might require some subsidies. But he insists the airline doesn’t think government should do all the heavy lifting when it comes to promoting tourism and getting inbound visitor numbers back to pre-pandemic levels.
“We all have a responsibility to think about the whole game and represent New Zealand as a brand into these markets that we want tourists to come from. And Air New Zealand has a big role in that, so it’s not the Government’s role alone to stimulate tourism.”
He says the country needs to get into the US market, and Asia, and convince people not just to visit New Zealand for a bucket list holiday, but to keep coming back.
“If you randomly picked 100 people from around the world who have ever visited New Zealand, 99 of them, if not all 100 of them, would say it was one of their greatest holidays, the people were the most friendly, the scenery was the most mind-blowing.
“We are a welcoming nation for tourists, but we also provide a type of experience that is so genuine and so sort of almost raw, it’s almost like money can’t buy. It’s a type of understated Kiwi luxury that you can’t find anywhere else in the world, and I think we should amplify our messaging around that.”
The health of regional routes and spending by the country’s biggest airports are among key issues for Nikhil Ravishankar. Photo / Jason Dorday
‘Never waste a crisis’
Ravishankar jokes about having a “face for radio” as he stands for a photo. It is a high-profile job. And it requires resilience and dedication.
The culture shocks Ravishankar had back in the ‘90s might now prove to be blessings.
“Our mantra has been ‘never waste a crisis’. You can sit there and be a victim of it, or you can say actually, we’ve got to do something about that.
“And doing something for us has been also avoiding sugar hits, not doing anything knee-jerk, being thoughtful, considered, and laying the groundwork for the long-term health of the business.”
You get the sense he’s confident the airline is resilient after its unwanted shutdown and unprecedented reboot.
But it may need more than resilience. It must try to convince regulators and airports to adopt the policies it wants, fend off incursions from rivals, and with the rest of New Zealand, entice tourists to make the long journey here.
Will he be able to pull off a trick like that when he showed Mt Albert Grammar his offspin?
“My overarching emotion is not frustration, it’s one of hope.”
John Weekes is a business journalist covering aviation. He has previously covered consumer affairs, crime, politics and courts.
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