Air NZ banks on digital to survive, revive and thrive

Air NZ banks on digital to survive, revive and thrive

Seamless digital experiences and improved customer knowledge key to airline's revival as more jobs slashed

Greg Foran (Air New Zealand)

Greg Foran (Air New Zealand)

Credit: Supplied

Air New Zealand has put digital front and centre in its efforts to revive and thrive as the country's national, and international, airline.

Once survival was assured it would double-down innovation and the development of seamless digital customer experiences, CEO Greg Foran said.

Air NZ has long been noted as a early adopter in digital and as an innovator in check-in technologies and cloud adoption, but will seek to increase that velocity further and become "a digital company that monetises through aviation and tourism in a very sustainable manner". 

Foran said it would be an understatement to say his first 100 days as CEO  had not gone entirely as expected. 

"However, it has proven to me that the care, compassion and heart of our people is everything I expected and more," he said outlining a company revival plan to the NZX. 

"Before our lockdown and even through it, I have experienced the wonderful culture that makes Air New Zealand very special."

It would be a hard journey getting the airline back on its feet, Foran said, of the three point plan to survive, revive and thrive.

"We have set the annual results announcement in late August 2022, which is in around 800 days’ time, as the target date for Air New Zealand to report we are starting to earn healthy profits again even though we may be only 70 per cent of our pre-COVID-19 size," Foran said.

Foran set a goal for Air New Zealand to be flying about 13 million customers annually by 2022 versus almost 18 million before the pandemic. 

"We will be highly efficient and operate fewer wide body aircraft. The good news is that Air New Zealand could be more profitable in the future than before, allowing us to start reinvesting in our customer experience, to share the rewards with Air New Zealanders via consistent profit share bonuses and to distribute dividends to our shareholders."

Air NZ has already laid off 4000 staff to survive in what Foran described as a whole-of-company approach in which "no area is immune". 

"Our wage bill is down by a third now but our revenue has fallen by more than two thirds. We need to balance the scales further."

A new phase, starting today, would see around $150 million more cut from the company's wages bill.

From 1 September, with a much lower cost base in place, the company would be focusing on revival, Foran said.

"We are also hopeful that around this time the nation will well and truly have returned to Level 1 and that Tasman and Pacific Island flying could be returning for leisure and business travellers. 

"However, we are not factoring a return to long haul flying of any note until next year. We believe that until there is a vaccine, effective treatment or elimination of the disease in key markets, the New Zealand government will not fully open its borders for growth in long haul air travel."

Air NZ would use this phase to develop new products and services, while creating innovative ways to encourage Kiwis to travel for business and leisure. 

"Importantly, digital will be at the core of all we do," he said. "Air New Zealand’s customer experience of tomorrow must mirror that which consumers expect of a leading digital company, otherwise, we will not be relevant and we’ll fail to meet our full potential."

It would be a time where customers, stakeholders, shareholders and all Air New Zealanders would benefit from the hard work and innovation of the survive and revive phases outlined in today's revival plan, Foran said.

The business would be supported by "best in class" digital products across all fleets, allowing for seamless customer and staff interaction which would both improve the experience and reduces costs. 

"We will not only recognise our customers but understand them and know how they feel, which will allow us to offer world class service always and to exceed expectations wherever it matters most in their journey with us," Foran said. 

"If we can nail all that, I am hopeful we may even be a bit bigger than the 70 per cent of our former size we are preparing for.

Very few airlines globally would return to the former ways of working, he said. 

"The survivors will be more focused, lower  cost and provide better customer service. We want to thrive in this environment, realising our ambition to take care better than any other airline on earth."

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