Airline head man of 'vision and strategy'

By DANIEL RIORDAN transport writer

It's a hot Thursday morning and even in his air-conditioned office, Gary Toomey is sweating. Air New Zealand's new chief executive is a big man and the dash down Albert Street from his temporary hotel digs has taken its toll.

Life for the new boss right now is as transitional as corporate matters at his new airline group.

He spent most of the previous day at Ansett head office in Melbourne, and by the time he finished the four-hour flight to Auckland and dealt with the day's paperwork it was close to 10 pm.

In the next three days he faces another trip to Australia to talk with key corporate clients and one to Singapore to schmooze with 25 per cent shareholder Singapore Airlines and 30 per cent owner Brierley Investments.

Meanwhile, his wife and three-year old daughter are in Brisbane, where his father-in-law died on Wednesday, and it will be some time yet before the family can exchange their Sydney home for one in Auckland.

The former Qantas finance head and deputy chief executive who left when fellow deputy Geoff Dixon got the nod for the top job, says the ultimate measure of his success will be the performance of Air NZ's share price and the level of its dividend payout.

To that end the financial team he brought with him from Qantas is developing a performance plan to put to the board by the middle of this year. It uses the Holt Model, a sophisticated statistical predictor with a greater than 80 per cent correlation to share price, employed by major US corporates and Qantas.

While that happens, his team are fixing and mending things on a day-to-day basis, particularly at the group's problem child Ansett.

Mr Toomey says he has seen no signs of a culture clash between the two airlines - certainly nothing to rival the conflict when Qantas took over his old company Australian Airlines almost a decade ago - although he acknowledges most of the integration took place before his arrival.

The group is this week processing the first applications for voluntary redundancy offered to all 23,000 staff, but Mr Toomey says he has no number in mind for staff he wants to shed.

The company will know by the end of this month how many people want to leave, but Mr Toomey says he doesn't subscribe to slash and burn and won't be putting the acid on those who want to stay.

It might however require people to relocate - as happened recently with some of the revenue accounting jobs and some senior management who moved from Auckland to Melbourne.

"It doesn't have to be a nasty exercise if it's done professionally and, with the right techniques, it can be quite productive."

His new company's two-country operation presents special challenges, including working in different time zones, the strain of continual travel for management, and the complexities of different labour markets and tax rates.

That said, Mr Toomey acknowledges much of the Qantas operational template applies to Air NZ.

Analysts have criticised Air NZ's fuel hedging policies, praising Qantas' in the same breath.

Mr Toomey won't comment on what Air NZ did in the past, but says Qantas' approach is to use options and swaps as insurance, rather than punting on the fuel price.

His financial track record at Qantas - during his seven years there in charge of the purse-strings the company more than doubled its profit and gained a reputation as one of the world's most cost-efficient airlines - looks to be something of a double-edged sword.

Clearly Mr Toomey is unhappy with the term "numbers man" and his reputation for cost-cutting.

"I think people who say that are trying to mislead intentionally or they don't know me. I'm not a particularly great accountant or anything else. What I like to do is get great people around me and many of the people that worked for me for the last decade or more are now working for me here.

"For some people numbers just sing - like Kevin Turnbull and Adam Moroney [key executives he brought across from Qantas]. They don't do that for me. I'm more about vision and strategy, trying to think about opportunities and motivation."

He says some of his fearsome reputation comes from his unwillingness to tolerate those who are negative or lack a sense of urgency. One suspects few of them will be around too long.

"I'd just prefer they move on to other opportunities."

The portrayal of him as a financial whizz with limited feeling for the airline's operational side is something he says has been pushed hard by Qantas since he left in September, although his relations with his former colleagues remain cordial.

"I don't like the numbers man tag at all. For the last three or four years I ran all the operations, more than half the business of Qantas. Geoff [Dixon] was the marketing guy. I had the pilots, the engineering, the airports, the freight, the catering, the human resources, finance, safety and security."

Realising his ultimate vision for the group seems to entail marrying the financial precepts he followed at Qantas to the customer service ethos of Singapore Airlines.

To compete effectively with Qantas, Mr Toomey says the group has to pursue several coordinated strategies.

The high-yield corporate market has to be serviced by a network flying to key destinations such as Los Angeles, Tokyo, Hong Kong and London.

Getting close to Singapore will give the group access to bells and whistles for customers, such as inflight entertainment systems.

The closer the group aligns itself with Singapore in its products and the quality perception of customers the better, provided it retains its own identity.

"We want to present a high-quality image to customers, offer them all the primary destinations, and for secondary destinations, offer links through Singapore of similar quality."

That way the group can regain a lot of its corporate market in Australia, where Ansett's market share has slipped alarmingly.

"Do all of this and we'll have a world competitive airline, partnered with the wealthiest airline, Singapore, and within the best airline alliance, Star."

While all this is going on, the group is working hard to improve the efficiency of its day to day operations.

Another focus is punctuality - not of people but of planes, with a major study under way to improve the group's performance.

Ansett is now flying with a half-hour buffer between flights in the middle of the day, so when there's a problem with one, the domino effect on succeeding flights won't be so great.

Having reached what he calls a "holding pattern" at Qantas and in need of a new challenge after Mr Dixon's ascendancy, Mr Toomey says he is undaunted by the task ahead.

"It's a bit like turning around the Queen Mary. To change the direction of an organisation like this takes time and energy."