\u201cAirlines were never designed to be switched off. There\u2019s no on button, so the day we opened to the world post-Covid, it was really, really complicated to restart the airline,\u201d Ravishankar says.<\/p>\n
\u201cAbout 70% of our workforce have either joined fresh or have rejoined the airline post-Covid.\u201d<\/p>\n
The airline had laid off more than 1300 cabin crew and 300 pilots<\/a> in the pandemic\u2019s first few months.<\/p>\n \u201cA lot of institutional knowledge leaves the organisation when something like that happens, and it\u2019s a very complicated business, so it takes a long time to get back into rhythm.\u201d<\/p>\n Even after the borders reopened, there was the Auckland airport flooding<\/a> and Cyclone Gabrielle in early 2023. <\/p>\n Then there are issues afflicting Rolls-Royce Trent 1000 engines<\/a> on 787 Dreamliners<\/a> and Pratt & Whitney PW1100G engines on the Airbus A320 and A321neo.<\/p>\n \u201cA bit more of the sinister issue that\u2019s 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\u2019s just something that we could not have really planned for.\u201d<\/p>\n Foran previously indicated discussions with Pratt & Whitney were going well but Rolls-Royce not so much. Rolls-Royce defended its actions<\/a>, telling the Herald in June mitigating these problems was the top priority for its civil aerospace division. <\/p>\n \u201cThey\u2019re in a difficult position as well,\u201d Ravishankar says of the manufacturers. <\/p>\n \u201cThey\u2019re not doing this to hurt Air New Zealand per se. They are dealing with significant challenges with their own rebuild.\u201d<\/p>\n The industry has faced attrition and skills shortage issues<\/a>. And just last week, Jarden and Forsyth Barr<\/a> downgraded Air New Zealand after the airline said it expected a first-half pre-tax loss of $30-$55 million.<\/p>\n Ravishankar says the rebuild has involved retraining, and investing in infrastructure, new hangars<\/a>, new ground service equipment, and digital infrastructure.<\/p>\n He says despite the many problems hobbling its recovery, the airline has strong foundations and is in a good position to seize the future.<\/p>\n But another issue, possibly more consequential than others, looms in the place he first arrived as a 15-year-old.<\/p>\n Airports<\/p>\n 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.<\/p>\n But Ravishankar says the watchdog made it clear more should be done to ensure airports act in the public interest.<\/p>\n The commission said: \u201cWe 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.\u201d<\/p>\n It\u2019s that line he says is crucial.<\/p>\n \u201cThis last financial year we\u2019ve spent $265 million on landing charges, and that\u2019s about 4% of our revenue. By 2032, we will spend about $730m on landing charges, and that\u2019s about 8% of our revenue. At that point it\u2019s 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.\u201d<\/p>\n If Auckland Airport were here in the Air NZ boardroom to defend itself, it would likely argue the money it\u2019s spending is on critical infrastructure for the country\u2019s long-term wealth and resilience.<\/p>\n But Ravishankar says current rules assume there are two countervailing powers – one airport and one big powerful airline.<\/p>\n \u201cUnfortunately, 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\u2019t have to do anything at that point because they\u2019ve consulted with us.\u201d<\/p>\n He says the commission is hamstrung because, basically, the game is rigged.<\/p>\n \u201cThe way the rules are set, they don\u2019t 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\u2019t actually effectively working today.\u201d<\/p>\n 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?<\/p>\n \u201cCarrie 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,\u201d Ravishankar says.<\/p>\n \u201cThe 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.\u201d<\/p>\n 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.<\/p>\n Cleaning up<\/p>\n Even if airport pricing disputes get resolved, another challenge confronts the sector.<\/p>\n The world\u2019s airlines have committed to a net-zero carbon emission goal by 2050. Sustainable aviation fuel (Saf)<\/a>, electric aircraft<\/a>, 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.<\/p>\n \u201cMy background is in science, and so I come from a sort of technical bent,\u201d the new CEO says.<\/p>\n \u201cIt\u2019s worth noting that decarbonising aviation is at the really wicked end of the decarbonisation problem set. It\u2019s not easy and a lot of these issues we\u2019ve been discussing today are wicked problems.\u201c<\/p>\n He says between now and 2050, Saf will have to be a fairly big part of the formula for decarbonising aviation.<\/p>\n But don\u2019t bet on the airline setting up its own refinery or Saf production centre.<\/p>\n \u201cWe\u2019re an airline. We don\u2019t 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\u2019ll play in position.\u201d<\/p>\n And that will have to be in collaboration with fuel producers, here or overseas. <\/p>\n At home, Ravishankar has already generated feedback for suggesting regional routes might require some subsidies. But he insists the airline doesn\u2019t think government should do all the heavy lifting when it comes to promoting tourism and getting inbound visitor numbers back to pre-pandemic levels.<\/p>\n \u201cWe 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\u2019s not the Government\u2019s role alone to stimulate tourism.\u201d<\/p>\n 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.<\/p>\n \u201cIf 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. <\/p>\n \u201cWe 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\u2019s almost like money can\u2019t buy. It\u2019s a type of understated Kiwi luxury that you can\u2019t find anywhere else in the world, and I think we should amplify our messaging around that.\u201d<\/p>\n \u2018Never waste a crisis\u2019<\/p>\n Ravishankar jokes about having a \u201cface for radio\u201d as he stands for a photo. It is a high-profile job. And it requires resilience and dedication. <\/p>\n The culture shocks Ravishankar had back in the \u201890s might now prove to be blessings. <\/p>\n \u201cOur mantra has been \u2018never waste a crisis\u2019. You can sit there and be a victim of it, or you can say actually, we\u2019ve got to do something about that.<\/p>\n \u201cAnd 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.\u201d <\/p>\n You get the sense he\u2019s confident the airline is resilient after its unwanted shutdown and unprecedented reboot.<\/p>\n 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. <\/p>\n Will he be able to pull off a trick like that when he showed Mt Albert Grammar his offspin?<\/p>\n \u201cMy overarching emotion is not frustration, it\u2019s one of hope.\u201d<\/p>\n John Weekes<\/a> is a business journalist covering aviation. He has previously covered consumer affairs, crime, politics and courts.<\/p>\n Listen and subscribe to the Today in Business<\/a> podcast \u2013 the top headlines from the NZ Herald business team summarised and delivered by an artificial intelligence (AI) voice as an easily digestible recap.Save<\/a>Share this article<\/p>\n Reminder, this is a Premium article and requires a subscription to read.<\/p>\n Copy LinkEmailFacebookTwitter\/XLinkedInReddit<\/p>\n","protected":false},"excerpt":{"rendered":"Far from home, the teenager arrived at Auckland Airport. It was spring, wet, when daily temperatures average 14C.…\n","protected":false},"author":2,"featured_media":107874,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[68,17622,2681,95,28824,51,1863,77630,138,3500,537,77629,71,1345,117,111,139,77627,69,90,77628,4054,1555,2963],"class_list":["post-107873","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-air","tag-airlines","tag-airport","tag-and","tag-arrived","tag-auckland","tag-back","tag-bouncing","tag-business","tag-ceo","tag-crisis","tag-existential","tag-from","tag-home","tag-new","tag-new-zealand","tag-newzealand","tag-nikhil","tag-nz","tag-on","tag-ravishankar","tag-teenager","tag-threat","tag-zealands"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/107873","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=107873"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/107873\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/107874"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=107873"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=107873"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=107873"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The health of regional routes and spending by the country’s biggest airports are among key issues for Nikhil Ravishankar. Photo \/ Jason Dorday<\/p>\n