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Luxon’s successor will move Air New Zealand upmarket
June 21st 2019
Search begins for new Air New Zealand CEO following Luxon’s resignation – possibly for politics. Read More »
Air New Zealand (Air NZ) is beginning a local and international search to identify a successor to CEO Christopher Luxon, who announced on June 19 that he would leave the airline on September 23. Luxon has been running the airline for more than six years. He will take the New Zealand summer off before considering a range of careers, although local media mostly focused on the possibility that he will enter politics.
Possibly complicating succession planning is that chairman Tony Carter announced last July that he would retire in September 2019. There is some continuity as his replacement has long been identified as current director Dame Therese Walsh.
Luxon’s successor inherits a stable and profitable airline, but there are short and long-term decisions to make. Slowing growth in the cash-cow domestic market saw Air NZ trim expansion. The successor will need to move the carrier up-market.
Luxon has said the airline is developing new seat products. The carrier’s business class seat was once industry-leading for being lie-flat and with direct aisle access, but has become dated. Previous users of similar versions, including Cathay Pacific, Virgin Atlantic and Delta Air Lines, either have replaced the seat or introduced new products. Qantas and North American competitors also have introduced superior products.
Elsewhere in the airline’s premium proposition, Air NZ controversially changed from stocking a range of local wines to selecting a few major labels.
Luxon’s successor also has partnerships to evaluate. Tentative U.S. approval for the Qantas-American Airlines joint venture creates higher competition concentration levels that Air NZ and United Airlines (UA) could leverage for a wider partnership. Luxon’s successor might even rekindle the relationship with Virgin Australia since both airlines will have changes CEOs.
Reduced competition through partnerships might provide the budget for passenger product that Luxon did not favour. One major capital investment underway at Air NZ is a tentative order for 787-10s that the carrier announced last month.
