Greg Foran. Photo / Brett Phibbs
During the past two years of the Covid-19 pandemic, the staff at Air New Zealand have displayed commendable resilience and dedication. Amidst the uncertainty, Air New Zealanders developed a new philosophy: "Smile with your eyes above the face mask."
Domestic passenger services with strict Covid health and safety protocols continued, albeit restricted at times and schedules continually changed. The transtasman travel bubble came and went, and long-haul flights and their aircraft were grounded.
Air New Zealand completed repatriation flights, even from Wuhan where the Covid outbreak began, and continued to fly important exported goods to overseas markets.
"The last two years have just been incredibly challenging and difficult," said Dame Therese Walsh, chair of Air New Zealand. "We are definitely whanau here. It's such a special culture and it was fully tested.
"People had to deal with Covid personally and at work as they lost close colleagues in different roles.
They had to work harder and be more empathetic to customers in difficult situations," she said.
"The great thing that has emerged is the culture is stronger — Air New Zealanders' essence has shone through. Running an airline is one of the most complex businesses to be involved with. We had operational volatility and we had to deal with the human aspect of how to band together.
"When we did the repatriation flight to get Kiwis out of Wuhan, we asked for volunteers and it was oversubscribed. People just wanted to help. Through the pandemic, our people smiled with their eyes above their masks and made everyone feel welcome," said Walsh.
For the first time in the Deloitte Top 200 Awards' history, the judging panel has been given the ability to make a special award highlighting performance that is of importance to the business community.
Judging Panel convenor Fran O'Sullivan, who is NZME Head of Business Content, said the panel selected Air New Zealand in recognition of the "hard work and sacrifice Air New Zealanders have made — and continue to make — to keep New Zealand connected to the world and domestically during the pandemic".
"Air New Zealand holds a special place in the Kiwi psyche," said O'Sullivan. "For an island archipelago in the South Pacific, having a national flag carrier is not only a lifeline to the world. It is a source of pride for the many international awards Air New Zealand has chalked up as the world's best airline.
"When Covid struck in March 2020 and New Zealand borders shut hard, the airline had to pivot — very substantially and fast.
"Routes were closed, planes parked up, staff massively downsized and customers felt disenfranchised. Flight demand was down 95 per cent almost overnight.
"With Government funding support, Air New Zealand — a critical element of the country's logistics — kept servicing exporters taking their products to the world.
"By mid-2021 some pilots and crew had already spent more than 100 days in isolation — the upshot of keeping New Zealanders connected to the world. Some pilots even found tradesmen were unwilling to work at their homes through fear of infection," O'Sullivan said.
The judges noted the efforts of the board and management in its steadfastness in the face of the pandemic. "But we recognised that it is actually an honour that truly belongs to the entire staff who has strived to respond to these enormous challenges. In doing so, they have maintained strong support for the brand and service offering that Air New Zealand provides," added judge Neil Paviour-Smith.
The judges said though the airline's operating costs have about halved (over the past two years), the smaller number of staff have had to respond while themselves living with and working through Covid disruptions and uncertainties — some of whom have been the first affected with Omicron.
Soon after Covid struck 4000 Air New Zealanders — a third of the staff — were made redundant and more than 700 have since been rehired. Another 225 people have been brought back from furlough (125 pilots remain on furlough) and 346 people have returned from Covid leave without pay. Of the total fleet of 119 aircraft, only 23 per cent or 27 planes were flying at the peak of the Covid impact in April 2020. Of the 92 aircraft parked, 15 were Boeing 777s in long-term storage at Auckland, Roswell in New Mexico and Victorville in California.
Reporting its latest half-year result in late February, Air New Zealand recorded a loss of $376 million (it was $105m in the six months ending December 2020) and operating revenue declined 9 per cent to $1.1 billion.
Passenger flying was down 26 per cent compared to the previous corresponding period and was down 84 per cent compared with pre-Covid levels, costing the airline about $3.5b.
Cargo revenue for the six months increased 29 per cent to $482m, and Air New Zealand moved 121,000 tonnes of cargo during the whole of last year.
By late February the airline had used $760m of the Crown Standby Loan Facility and it had $1.4b liquidity, made up of $170m cash and $1.24b of the remaining Crown facility and redeemable shares.
Air New Zealand is planning a billion-dollar capital raise by the end of March.
Greg Foran, Air New Zealand chief executive, said he couldn't be prouder of the whānau for what they have achieved this year so far: "Everything from adding flights so Northland could remain connected to the rest of the country while the Auckland border was in place to the digital solution for our customers to seamlessly upload their vaccine pass to their Air New Zealand app.
"The restart of the domestic network in December in time for the holidays went like clockwork, as did the reopening of the Cook Islands bubble in January.
"We can see the path back to the Revive phase of our Survive, Revive, Thrive plan.
"We have the right strategy, the right people and we are ready to fly. Looking out to the end of the year, we will be ramping up more passenger flights to North America and looking forward to starting up our direct service to New York," Foran said.
Walsh said "the reason we have a little spring in our step is that we are seeing forward bookings in April, May and June as the international borders open up. There's light at the end of the tunnel."
The international passenger network has historically produced two-thirds of Air New Zealand's revenue.
Andrew Ridling, president of the New Zealand Air Line Pilots Association, said the aviation industry globally has been through its biggest crisis since World War II.
"There was no playbook for this crisis and Air New Zealand and its staff have done a very good job. I have a huge amount of respect for the leadership qualities of Greg Foran who is very intuitive and people-focussed.
"On Christmas Eve he flew from airport to airport just meeting and talking with staff.
"He operates at the grassroots level, and if you think about people, then the decisions become easy."
Ridling said the pilots and senior management are wedded to Air New Zealand, and it's important to use the experience of the pandemic and take the platforms of communication and engagement to the next level.
"I can see a completely different and stronger company coming out of the pandemic and achieving aspirations that have never been thought about.
"Air New Zealand has a large international network. It could grow that and become globally dominant like Singapore Airlines and Emirates, and really put NZ Inc on the map," he said.
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