Unhappy Air NZ chief flies the coop over contract row

By DANIEL RIORDAN

Air New Zealand managing director Jim McCrea abruptly left the airline yesterday, apparently over a dispute concerning his $1 million contract.

His sudden departure after a lifetime with the carrier is said to be linked to changes proposed to his employment contract under a new structure with recently acquired Ansett Australia.

Mr McCrea was unhappy with those changes, a source close to the company said.

Members of the Air NZ management are being reshuffled as part of integrating the two airlines, with changes expected to be announced during the next few weeks.

Mr McCrea left after nine years in the top job and 44 years with Air NZ and its predecessor.

Sir Selwyn Cushing has stepped in as executive chairman while a worldwide search for a replacement gets under way.

While Mr McCrea's departure was no surprise, its timing certainly was.

Most of the market analysts the Business Herald contacted said they had expected him to leave once the deal with Ansett Australia was clinched late last month, but had expected it to be much later this year or even early next year.

Much of their focus yesterday was on the role played by Singapore Airlines in Mr McCrea's departure.

Relations between Mr McCrea and Singapore head Cheong Choong Kong became strained after Air NZ effectively blocked Singapore's attempt to buy half of Ansett Australia.

Singapore instead took 25 per cent of Air NZ.

Air NZ issued a press statement in which Mr McCrea described the completion of the Ansett Australia deal as a "natural turning point" in a development strategy he had been driving in his nine years in charge.

"Now ... it's time for me to look for a fresh challenge."

Sir Selwyn, in the same statement, said Mr McCrea had made a major contribution to the airline's development.

One rumour had Mr McCrea joining Hong Kong-based Cathay Pacific.

A Cathay Pacific spokeswoman said the company did not comment on market rumour.

Local analysts paid tribute to Mr McCrea's stewardship during a turbulent time for Air NZ.

Strategically, he will be remembered for taking the airline into Australia, an often tortuous process that culminated in last month's deal with Ansett Australia.

Air New Zealand shares rose after the news, with the A shares, available only to New Zealand residents, closing 5c higher at 180c.

The B shares, available to all comers, closed 12c higher at 221c.