Air New Zealand's Greg Foran: We want to run this airline like a Swiss watch

Air New Zealand chief executive Greg Foran wants his company to become the world's leading digital airline.

"We're focused on running the airline like a Swiss watch with safe, efficient operational
performance and building a rewarding place to work, with an uncompromising focus on keeping staff and our customers safe," he told the company's annual shareholder meeting today.

The airline has been working on revamping its loyalty scheme to better reward high-value customers and while Foran didn't reveal details, he said it was "making headway" on the project.

He said loyalty was a source of untapped potential for new revenue.

During the past year the 3.6 million-strong Airpoints scheme gained more than 160,000 new members. Foran said there had been work on the developing back end technology and there would be more detail of changes for members within the next 18 months.

Changes to its customer app would be rolled out later this year.

To help build up its domestic business, subscription services were being developed. Overseas, for a fixed monthly rate and a time commitment, subscribers can take a number of trips on designated flights at required intervals.

Air New Zealand has announced an underlying profit for the current six months and Foran - just back from its new non-stop Auckland-New York service - said he had never been more optimistic about the future.

"We're seeing optimism in travel return – not just in bookings but in the joy of getting out to experience the world."

He said the three-times-a-week New York service could grow as the route develops. The airline's chair Dame Therese Walsh said it was unfortunate some bags had to be unloaded before the first flight from New York to Auckland this week to save weight. This would happen ''from time to time'' on flights and a review as underway to minimise the chances of it happening again.

Latest figures from the airline show domestic bookings running at 105 per cent of the 2019 financial year. International bookings are at 75 per cent.

But winter illness and bad weather affected reliability in July and the airline trimmed capacity by 1.5 per cent until the end of the year to give itself more flexibility.

It does expect capacity at around 75-80 per cent of pre-Covid levels for this financial year, which would be higher growth than anticipated back in March when it launched its $2.2 billion recapitalisation, reflecting the stronger demand.

For the year to June 30, the airline reported a statutory pre-tax loss of $810 million but now says it is firmly in the "revive" phase of its recovery from the pandemic.

On the basis of strong forward sales, Air NZ has forecast pre-tax earnings of $200m to $275m in the current six months.

Walsh said as the airline emerges from the pandemic it can't go back to what it has always done.

"The world has changed so much since the pandemic began and we are making sure that Air New Zealand changes with it."

Its Kia Mau strategy is focused on growing domestic, optimising international and lifting loyalty.

She said dividends would not return until there was a sustained recovery in earnings, and in the context of a supportive broader economic environment and recovery.

Asked about the possibility of a share buyback she said at "this time" none was planned.