New Air NZ CEO warns of two years to turn it around

By Graeme Kennedy

Friday 15th February 2002

IRONIC CHOICE: Ralph Norris

The former head of the Business Roundtable - a body reviled by the coalition government - has the job of turning around an airline the government effectively nationalised to rescue it from bankruptcy.

Ralph Norris, an Air New Zealand board member, incoming CEO and managing director, warns it could take two years to turn it around.

But the former ASB Bank managing director said the company should show signs of improvement within 12 months after management refined its product and worked on strategies to enable the airline to compete more effectively.

"Air New Zealand has many strong attributes, including its engineering division, and we have got to ensure we harness those," Mr Norris said. "We have got to play the game sharper and faster.

"We must focus on customer needs and ensure we have the offering the public wants. There is a lot of work to do - we have a number of ingredients to return Air New Zealand to a successful company but many things will have to change.

"We must develop strategies to put Air New Zealand back at the forefront of the industry. I have a strong view of where the company is at and where it should be going and I believe I can contribute and work with a team of people committed to turning it around."

The carrier last year reported a $1.4 billion loss following the collapse of its Ansett Australia subsidiary and was bailed out by an $885 million cash injection from the government, which now owns 82% of the airline.

Mr Norris, The National Business Review's 2001 New Zealander of the Year, was an Air New Zealand director for three years and was one of a three-man board subcommittee considering the new CEO appointment to replace former Qantas CFO Gary Toomey when he decided to apply for the position himself.

He left ASB Bank in September and said he then had no intention of taking on another CEO role, intending instead to "seek a few directorships and sharpen my golfing skills."

He is a director of Fletcher Challenge and Team New Zealand Defence 2003, a consultant to the Commonwealth Bank of Australia, a member of several trusts and a former chairman of the New Zealand Bankers Association. He chaired the roundtable at a time it was shunned during the first two years of the coalition government.

While on the selection subcommittee, he said, he felt he had some of the attributes needed to turn Air New Zealand around. "I felt I was [at 52] too young to leave a CEO job and after four months of hard thinking found I missed the challenges of being a CEO. I thought long and hard about it and canvassed the idea with the two other directors on the selection subcommittee.

"They agreed and I offered myself as a candidate to go through the same process as the others - I was a late contender and became part of the rigorous examination every other candidate went through. We were getting close to the final selection stages of the interviews but had not reached decision point when I applied."

Mr Norris said his remuneration was market-related and he was being paid what the job was worth - "I am not selling myself short."

Chairman John Palmer said Mr Norris was one of New Zealand's outstanding CEOs of the last decade and would bring to the company the characteristics it needed. He said Air New Zealand's half-year results would be announced on March 7.

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