Down to earth delights for high-flying dad

By DANIEL RIORDAN

For most of this year Gary Toomey had an albatross called Air New Zealand around his neck. But on the day the Business Herald called, a four-year-old fairy called Brooke had taken its place, and her father seemed worlds away from corporate meltdowns.

Mr Toomey resigned as Air NZ's chief executive on October 9, four weeks after the writeoff of subsidiary Ansett Holdings plunged the company to a $1.4 billion loss.

The decision to ensure Air NZ's survival by casting its problem child adrift brought Australian death threats against the 47-year-old, and for a while security guards kept watch on the St Heliers home he rents with Brooke and wife Denise.

A minder travelled into work with him - the airline's former acting chairman Jim Farmer had the same protection - when passions across the Tasman were most inflamed.

Since leaving Air NZ with the blessing of the board and a one-year severance payout (believed to be well above $1 million) Mr Toomey hasn't been sitting around waiting for the phone to ring with job offers.

He says he's been busy tidying up personal affairs, holidaying with family in Fiji and Brisbane (Brooke celebrated her fourth birthday there), and visiting Kiwi scenic spots.

Christmas will be spent in Australia, but the family plan to live in New Zealand until at least the middle of next year. A move to Mt Maunganui is possible, and in the longer term, Brooke's schooling options have been covered with her acceptance into St Cuthbert's College.

There has been one job offer, with a South Asian airline in a country where the family decided they didn't want to live, but Mr Toomey says he's in no hurry to slip back into a shirt and tie - especially if it means working in aviation.

His restraint of trade agreement with Air NZ blocks him from working for any airline that flies in and around Australasia, but the industry downsizing that was taking place globally even before September 11 has made him wary of reentering the cockpit. Instead, after 30 years working for large corporations, he's keen to get involved in smaller, entrepreneurial businesses - maybe with an equity stake.

"New Zealand has a wealth of people with bright ideas who maybe could do with someone with corporate experience. I might get involved with tourism," he says.

"I feel more affinity with New Zealand out of all of this. People have been coming up to me in restaurants and shops saying they feel sorry for me and would like me to stay on.

"That's really nice. I don't think anyone should feel sorry for me, but it boosts your ego a bit because it's down around here [points to his feet]. Professionally, after something like this, you feel a bit of a pariah."

At least his recent trip to Australia passed without unsavoury incident - "some of the Brisbane papers reported I was in town but that's as far as it went" - and he senses animosity there has died down as people learn more about the complex reasons for Ansett's demise.

Mr Toomey says the day of Ansett's writedown and those that immediately followed were probably the worst of his life.

"We sat there and thought 'It's all over Red Rover'.

"It's not only that you feel you probably have failed, it was the vitriol that went with it, going to bed each night and waking up to read about it in the paper.

"I've led a pretty conservative business life. As a chief financial officer with Qantas, my major push was to get the gearing down. Now I had Aussie media reporting garbage accusations about us stealing Ansett's fuel and engines. One commentator was comparing me to Christopher Skase and Alan Bond. I'm thinking, 'How do you figure that?' I haven't defrauded anyone or stolen any money.

"Ironically, trying to be a people person created most of the angst in this scenario. If I hadn't fronted the [Ansett] advertising campaign and tried to be so open and approachable with staff, the reaction in Australia probably wouldn't have been so personalised."

He says he bears no bitterness towards any of the parties involved in Air NZ's near-collapse, and detects none towards him.

The decision to leave was entirely his own. The airline without Ansett was going to be less than half the size, staff cuts were looming - including a lot of the people he'd brought from Qantas - and Government ownership presented its own challenges.

"I thought it would be better for someone new to come in with a fresh scenario on the table which they could own and work with," he says.

"I'd desperately love Air NZ to succeed and hopefully it will. The staff's motivation is fantastic. They're the company's best asset."

He hasn't met new chairman John Palmer but believes he has the right skills for the job.

Mr Toomey hasn't talked to Air NZ about consulting work.

"I'd like to do something but I don't want to push it because people might say no and I don't want to be embarrassed," he says. "I guess it depends on the new CEO."

The Government's indication that it plans to be involved for the long haul should give the market confidence.

But an immediate challenge for the airline is figuring out what it's going to do in Australia.

Protecting the profitable New Zealand market is also a priority, as Virgin Blue wants to fly here and Qantas is expected to increase its presence when the time is right.

"The fear I have is that once Qantas sorts itself out, it's such a monolith to fight against.

"For the moment, I think it's reluctant to really move in here because it doesn't want to be seen as predatory.

"Air NZ is going to have to link up with someone strong to protect that market. People are opposed to it being Qantas because of competition issues, but you can regulate around those."

Before being interviewed, Mr Toomey indicated he would be reluctant to talk about what went wrong at Air NZ.

But on the day he seems happy to get things off his chest.

Criticism of his performance as chief executive rankles.

He came from Qantas in January with the rap of being a great chief financial officer who might lack the people skills needed for the step up to the top job. He believes he never really got the chance to prove himself at Air NZ.

He says he and his handpicked ex-Qantas management team were running for their lives from day one. Each week a new layer of problems peeled off Ansett's fragile core.

The Easter groundings of a crucial part of the airline's fleet topped off a nasty introduction to his new job, but he maintains the airline was getting back on its feet and would have returned to profitability if the planned acquisition of discount competitor Virgin Blue had gone ahead.

"Virgin was the key," he says. "Every time Ansett added an aircraft Qantas matched us, even if it was uneconomic for them, and we could never get our capacity share back up.

"If we'd acquired Virgin we'd have gone to 48 per cent and Qantas would have had to try and match us.

"But they'd made the mistake when they bought Impulse [another Australian discounter] of integrating its costs and they'd lost those significantly lower margins - they were now only 15 per cent by their own admission. So every time Qantas added an aircraft we'd have added a Virgin aircraft, at half their cost."

The acquisition would have enabled Ansett to reconfigure its fleet, selling its expensive-to-operate Whisper jets and replacing them on regional routes with cheaper Virgin aircraft.

"That would have halved our costs overnight," he says.

And with Virgin no longer a competitor, discounting in the market would have plummeted.

"Once you had Virgin and the cost savings, you had a good business case. Singapore would have invested a large amount of money into Air NZ, signalling its confidence to the sharemarket, and things would have turned around."

Australia's competition watchdog had informally indicated its willingness to approve the purchase, but instead Virgin boss Sir Richard Branson theatrically tore up Air NZ's proffered cheque and Ansett's days were numbered.

So was leaving Qantas the worst decision of Mr Toomey's life?

"It's a good question. But I wanted to have a go at being a chief executive. I joined because I had clear commitments from directors and the two major shareholders [Singapore and Brierley Investments] that they were going to invest in the business and grow it on a revenue, not cost, basis.

"As it turns out, it's been completely the opposite of what I expected, but I'm not blaming anyone.

"Where do you stop? I think at the end of the day you have to move on. Sitting here contemplating what might have been isn't very healthy. I can even live with the fact I might have failed as a CEO, though I don't think I did.

"But I'm pleased the animosity of some of the people in Australia towards me has died down.

"When we were in Fiji two young women swam up to me in the pool and said 'We just want to let you know we're from Ansett. We understand what happened, we'd been in trouble for years ... '

"In the aviation industry people love what they do. They'd lost their jobs and some of them had lost more than that - their hobbies, their lifestyles ... Probably all of us are to blame to some degree, but there's no one involved in the whole thing I couldn't comfortably walk up to today."

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