Major upgrade unveiled for Air New Zealand

Friday 9th February 2001

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GARY TOOMEY: Big plans for our national carrier including service improvements based on Singapore Airline standards

By Graeme Kennedy

Air New Zealand and subsidiary Ansett Australia plan a major fleet and service upgrade based on 25%-shareholder Singapore Airlines standards later this year, new group chief executive Gary Toomey says.

The former Qantas finance director who took over his new job last month, said the new-look carriers would not be a Singapore Airlines clone but would adopt the Asian airline's renowned service concepts.

"We won't be having Singapore girls but if we have the same hard product we will have all the benefits of their technology and investment - we don't have to duplicate it," Mr Toomey said.

"We want similar quality product to Singapore Airlines, which is arguably the best customer service carrier in the world and as we will upgrade anyway, why try to re-invent the wheel?

"Elements of our customer service product are excellent and we won't remove the positive things about Ansett and Air New Zealand which make them unique.

"It's not about becoming another Singapore Airlines but trying to use our commercial ties with them to our advantage while retaining our own identity.

"We have got to upgrade to remain competitive."

Mr Toomey said the group had begun early preliminary talks with major aircraft manufacturers Boeing and Airbus and pointed out that long lead times for new aircraft deliveries made the upgrade a five to 10-year plan although interim equipment could be sourced, possibly from Singapore Airlines.

He said the upgrade would be expensive and any fleet expansion had to be cash-flow positive and backed by a strong business case.

"As we improve efficiency, we will spin off a lot more cash," he said. "We must have an appropriate mix of equity and debt and if there is the right business case I believe the equity markets will respond - and I believe we can find the right business case.

"And we will talk to Singapore Airlines about it as well. They buy large numbers of aircraft and we could get a better deal by ordering with them."

Mr Toomey said he did not envisage "massive" job losses in the Air New Zealand-Ansett integration - "I'm not into slashing and burning," he said. "That's for companies that are in dire straits.

"We need more people for the growth plans we have but we have to remove inefficiencies and get growth through improved efficiency and productivity. We need better planning and to be smarter.

"Growth for the group means having a proposition for the customer that's better than our major competitor's," Mr Toomey said.

He said Qantas was "vulnerable" as the carrier operated to many destinations that were not as profitable as others and was forced to support a large infrastructure.

"We don't need to do that," he said. "A lot of infrastructure they have in place we don't need to have - we can grow relatively selectively."

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