Cool hand takes controls for Air NZ

Rob Fyfe says Air New Zealand has to become a more nimble organisation that is prepared to make mistakes, if it is to be successful. Picture / Kenny Rodger.

A 22-year-old Rob Fyfe got a call from the Townsville control tower - the Royal New Zealand Airforce officer had to make a decision, and quickly. A Skyhawk jet had flipped on the runway while landing and it was up to him to figure out what to do with it.

With a plane disabled on the runway, other jets overhead had nowhere to land.

Fyfe's cool head while organising cranes and a flatbed truck to move the crippled plane went a long way to make his name among the Air Force top brass.

The United States-produced Skyhawk manual had demonstrated a less delicate method of getting a stricken Skyhawk off the runway: using a bulldozer to push it off into a big hole.

" ... We couldn't afford to do that ... as New Zealanders we had to be a bit more ingenious," said Fyfe.

His work meant the plane eventually flew again, as did the pilot, who was lucky to survive the landing.

It is this sort of nimble decision making that saw Fyfe promoted to Flight Commander in charge of maintenance of the Air Force's Skyhawk Squadron aged 24.

Now, 20 years on, he has been given the job of heading Air New Zealand, now over 80 per cent owned by the Government, just four years on from the collapse of its Ansett subsidiary.

A week into the new job, Fyfe has demonstrated he can still make tough decisions.

He announced on Wednesday a plan to send all the airline's heavy maintenance work overseas, a move that is likely to mean axeing more than 600 jobs at its Auckland engineering base.

He also told shareholders at Wednesday's annual meeting that pre-tax profits this year are likely to be around $100 million - sharply down from $235 million last year. Soaring fuel prices are continuing to hammer the airline, which now finds itself unable to keep imposing surcharges on its tickets without turning off demand.

Its share price - due in part to the Government's high ownership meaning the shares' market liquidity is poor - has been dropping all year.

Air NZ, one of the few airlines in the world to be making profits, is about to take delivery of the first of a fleet of new Boeing 777-200s, and even has $1 billion in the bank.

In this environment, says Fyfe, the airline has to be more nimble.

Air New Zealand is an organisation where a lot of analysing goes on before decisions are made, and this must change, he says.

He wants the national carrier to be able to make quick decisions and be prepared to make mistakes.

He sees an opportunity to create a much more innovative culture in Air NZ, a culture where new ideas can be tried.

"My style is more to give things a go, see what customers think," he says.

"If the customers don't like it, we can rapidly change most things and try things differently."

He uses as an example the time Air NZ downgraded its business-class meals across the Tasman - which met with fierce customer resistance.

"Response was negative - so we took it off. We got respect for responding to customers.

"That's great, I'd like to do more of that. Because the one that works when you take that risk is the one that your competitor may not have the guts to try."

Innovation like this is not always easy in an airline, largely because such a big part of its business must be extremely risk-averse. There is no scope for innovation, breaking boundaries and pushing the limit for pilots and maintenance engineers. This means there can be no risk taken on the operational side.

"But in the commercial sense, there are plenty of things you can try that don't have the same consequence," he says.

"The challenge in airlines is to separate the commercial side of the business from the operating side of the business and potentially have a different appetite for new ideas in different parts."

At first glance, Fyfe looks like a textbook high achiever, but he puts a lot of his initial successes put down to a combination of luck, ambition and being in the right place at the right time.

"Particularly in the context of yesterday's announcement [the plan for job lay-offs in the engineering divisions] it is important to reflect on where I started, which is as an aircraft engineer. In fact, I know some of the people directly affected by the decision made yesterday."

Fyfe points to this Air Force period as laying the groundwork for his ascent in the world of business.

"In the Air Force context of managing people, you get involved in everything: if someone dies on duty, your job is explaining to their parents what happened.

"If someone ends up in court for any reason, you end up in court as a character witness. A couple of guys died in a house fire - you end up as executor of their estate."

When Fyfe left the military, he discovered his peers in the business world lagged far behind in leadership experience.

"I found that from a people leadership sense, my career moved very quickly, because I had experience that was probably out of proportion to my years."

Fyfe has not been a manager of stable, predictable businesses since leaving the military and has since worked predominantly in organisations going through change.

"These were often organisations that needed significant change to their underlying business model as well as change to the culture of the organisation."

The plan to outsource maintenance stems in part from his belief that tough decisions are sometimes needed in one part of a business to ensure the rest of the company survives.

"We're an organisation of close to 11,000 people. And the fact that we have one part of our business that is not performing is tough - because it's not the fault of those people in that part of the business.

"There just isn't the demand for the service that part of the business provides."

It is not the first time Fyfe has had to announce big job cuts. His last job at ITV Digital in Britain required him to stand in front of 500 people to tell them the business was no more.

ITV, a free-to-air broadcaster, had started an ill-fated foray into pay TV, eventually let down by unreliable technology.

After helping lead the marketing charge to sign up new customers, Fyfe was given the task of managing director - which meant spending more than six months working out whether the business was actually ever likely to become viable.

Fyfe decided it was not - so everyone lost their jobs.

It's too early to predict what sort of public difference we might see with Fyfe taking over from Ralph Norris.

"I think Ralph's style and my style in that regard are compatible and we have a very common set of values. We have that underlying New Zealand psyche.

"I'm a very open person I say what I think, I'm my own person with my own viewpoint.

"Ralph carried with him that mana of a very successful work career in a range of businesses and he'd influenced a number of industries around New Zealand.

"I don't have that established track record and - for want of a better term - status in the business community in New Zealand."

"There's advantages and disadvantages to that. I am a very creative person, a very innovative person, I don't like to be constrained by boundaries."

Accepting the first week in the top job has not been easy, Fyfe says the future of the Air NZ's engineering had to be confronted.

"It's tough, but the nature of a job like this is that you have to take whatever it throws at you. Whether you get this in week one or get it in week 51 it wouldn't be any easier to deal with the issue. This is an important issue and the last thing I'd want to do is delay putting it on the table."

The past week has also quickly made Fyfe aware of the public nature of his new job. His valued privacy and anonymity has well and truly gone.

"Based on going out to buy my lunch this afternoon and having a number of strangers come up to me and actually - in essence wish me well for what is a very hard task ahead - suggests it's a public role."

"My kids told me I should smile more often for my photos in the Herald. I said this is not the time to be smiling.

"It is a very public role and I think probably for me personally, one of the challenges. "I'm a very private person and I used to like my anonymity. I accept that in this role you lose dimensions of both of those things."

Rob Fyfe

* Aged 44.
* New Zealander.
* Married with two children.
* Former jobs include MD of ITV Digital in London, general manager of consumer markets for Telecom.
* Like predecessor Ralph Norris, has experience in banking, having worked for the BNZ, National Australia Bank, National Irish Bank and Postbank.
* Began his career in the Air Force, reaching the rank of Flight Commander of 75 Squadron and responsible for maintenance.