At the departure gate: Air NZ CEO Greg Foran’s parting reckons

Sunday, 7 September 2025

Join the discussion and have your say in the comments.

Air New Zealand chief executive Greg Foran presented his final annual result for the company, last week, after turning down $900,000 to extend his 5½ year tenure at the airline. It’s been a tenure marked by Covid, the collapse of travel for a while, an extremely tough return for tourism, a cost of living crisis, a change of Government and ongoing engine issues that have eaten into the airline’s bottom line.

Probably with some relief, Foran will be handing the reins to current chief digital officer Nikhil Ravishankar and leaving his role, but so far, his onwards plans are unknown.

Having come from a job heading Walmart in the United States to lead Air New Zealand, The Post was interested to know if there was anypossibility Foran would be returning to big retail in the US — and what he thought of some of the challenges he’d be leaving for his successor.

Roeland van den Bergh sat down with Greg Foran.

Giant American retailer Kroger has a vacancy after CEO Rodney McMullen resigned in March - any plans to take his role?

Foran: I don't know what I'm going to do to be honest. I will worry about that when I get there. I’ve got a job to do for the next couple of months.

How do you rate the economy right now?

It is tough out there. You can see it in Auckland and Wellington and parts of the country. If you're a farmer, life's OK. If you're supplying farmers, life's OK. But I think most other people would say it's pretty difficult in the New Zealand environment at the moment.

Associated with that, tourist numbers have been slow to rebound to just 87% of pre-Covid in June. Australia visitors remain slightly below pre-Covid levels at 94%; the US is the only country of significance that is ahead in passenger numbers, up 4% from pre-Covid, but China, a big market for New Zealand, is only at 61%.

And you've also got a pretty challenging domestic environment - with government and corporate domestic passengers down 10% and 5% respectively in the second half of the past financial year.

So what you're seeing is, this is a discretionary business. You don't have to fly.

Business, whether it's government or corporate, is saying, “I used to go twice a month from Auckland to Wellington, or Wellington-Auckland. I'm only going to go once a month.”

It’s different in Australia. I walk out of Sydney Airport and I go, “wow, feels like everything's back”. I don't quite get that sense when I'm in Wellington or Auckland.”

Two years ago Rolls-Royce, which supplies engines for the Boeing 787-9 Dreamliners, and Pratt & Whitney, which powers the Airbus A320neo fleet, indicated their issues would be fixed in a year, but it hasn’t happened yet. What’s going on there?

The ongoing engine issues are taking longer and the airline is still negotiating compensation.

This time last year, we had six to seven aircraft that we couldn't fly, and we did not assume that would end up being 10 to 11 aircraft on the ground in the second half of last (financial) year.

That meant the airline did 4% less flying than the year before. You just don't plan a business to shrink to that extent.

If you spoke to Rolls-Royce today, they would tell you that it will be all fixed on April 1. I don't think it will all be fixed on April 1.

Even with compensation payments, Air New Zealand’s profit after tax for the year to June 30 would have been $165 million higher at about $354m, if it had been able to fly its entire jet fleet, so we've delivered a very reasonable result in light of the conditions that we're dealing with. But we go into this year with some more head winds.

Costs from airports, air navigation services, Civil Aviation Authority and Aviation Security Service increased by $84m last year - are these charges fair?

Air New Zealand is faced with a group of service suppliers that have no competition. If I tried to pass all of those on to customers, it would have a dramatic impact on how many people could afford to fly.

We can offset some through various productivity schemes and programmes we have running, like automated passenger rebooking is working a treat for us, but some will be passed on in higher airfares.

We’re also renegotiating supplier contracts, but spare parts for aircraft have increased 10% this year, and that's on top of 40% over the past five years.

So, we've got to deal with engines. We've got to deal with an economy which is challenging, and we're seeing providers to the ecosystem layer in pretty significant cost increases, because they can.

But we’re coping, and continuing to invest in infrastructure such as upgrading our Boeing 787-9 Dreamliner fleet with new cabin interiors, and new aircraft are on their way.

Air NZ and Auckland International Airport have chipped each other publicly, more so lately - is it good for two such closely aligned businesses to be in conflict for so long?

The relationship has been reasonably difficult for decades, and becomes difficult because we are not happy with the regulatory environment.

Auckland Airport is doing what's completely logical. They're maximising returns for their shareholders. But Auckland Airport made $310m profit on turnover of $1 billion, up 12% on basically flat volume - that tells you they put their prices up.

Airports across Air New Zealand’s entire network are its fourth-highest cost, and that cost has increased 6% this year, on top of 57% over the previous five years. Of the $24m in extra airport costs, $10m is for Auckland Airport alone.

The airline’s highest cost is fuel, followed by labour and aircraft maintenance, so, if you're running a business where you can just simply improve your profitability by putting your costs up, it's actually a pretty easy business to run.

But I don't have that option. I have to land my planes somewhere, and people do have an option whether or not they fly.

In 10 years, flying is going to be a heck of a lot more expensive. You're going to have an incredible airport at Auckland, which is over-specced. It will spend over $20b and it will be the biggest capital project in the country.

The relationship [between Air NZ and Auckland Airport] operationally has to function, and it does, because we are over 50% of their volume. We just think that someone needs to look at the regulations. I don't think the regulations ever assumed [the airport] would be a 100% publicly listed company.

China Eastern Airlines in June said it would start flying the long-touted “Southern Link” route, connecting China to South America, via Auckland in December. Air New Zealand previously flew to Buenos Aires, but it was axed when the Covid pandemic hit. Will Air New Zealand look to create its own China to South America link?

In this game, you don't really close anything off, but I would say for the next three, four years our priorities are America. Capacity there will increase 8% in the next year.

The next destination will be a return to the UK, probably London Gatwick - we pulled out in 2020 after 40 years on that flagship route - followed by direct flights to India.

Comments are moderated during working hours and may not appear immediately.