Market gets behind new Air NZ chief

Market analysts gave Air New Zealand's new chief executive, Rob Fyfe, full support last week, as he faces the challenge of high fuel prices, modernising the long-haul fleet and cutting costs.

Fyfe took over just a month ago from outgoing CEO Ralph Norris at a time when the company advised the market that its operating profit could fall by more than half in the current financial year if fuel prices remained high.

At the same time, Air NZ proposed restructuring its engineering services business by cutting up to 600 jobs.

Rob Mercer, head of research at Forsyth Barr, said Fyfe was one of the leaders behind all the strategies that have been put in place.

"Over the next 12 months we are going to see the fleet fully upgraded. Sixty per cent of their capacity is long haul and that's the final leg of their restructuring," Mercer said.

Analysts expect Fyfe and his team to come up with a number of initiatives over the next 12 months.

When Fyfe took over Air New Zealand, the company's share price was languishing at around a four-year low of $1.06.

The stock has since shown some signs of life, closing on Friday at $1.16.

Bernard Doyle, from Goldman Sachs JB Were, said fuel prices and the outcome of the current restructuring would prove pivotal for the airline.

"It's going to be how those bigger issues pan out that is going to decide the future of the company, particularly the oil price," he said.

- HERALD ON SUNDAY