|
COPYRIGHT 2001 Reed Business Information Ltd.
It is a sign of the times that Gary Toomey, the new chief executive at Air New Zealand (ANZ), is not receiving visitors at the carrier's Auckland head office, but at the Sydney branch office of Ansett Airlines. Wholly owned Ansett is bigger than its parent, and its problems are even bigger still. So, to address them, Toomey spends more than half his time on the Australian side of the Tasman Sea. In his first job as head of an airline, the 45 year old Australian has taken on the sizeable task of filling two vacancies rolled into one - the general manager positions formerly held by Jim McCrea at ANZ and Rod Eddington at Ansett.
Even for a man the size of Toomey, who resembles a fresh-faced bear, those are big shoes to fill. And the challenge has grown bigger since Toomey took charge in January. Empty bookshelves in his Sydney office testify to the fact that this is a man on a mission, moving from one urgent meeting to another, hardly aware that he even has an office, much less the time to furnish it. Leaderless for six months, ANZ and Ansett have drifted during a crucial period when they should have been integrating. Consolidated net profit at midyear plunged to just NZ$3.8 million ($1.64 million), against NZ$127.2 million a year earlier, and the company now expects a "substantial operating loss" for its full year ending 30 June. Toomey can hardly be blamed for the problems he inherited, but the responsibility to turn things around now rests firmly on his shoulders.
In assessing ANZ's poor performance, it is important to remember that certain macro conditions affected every airline in the region. Those include: higher fuel and airport costs; a strong US dollar; an Australian domestic traffic fall during the Sydney Olympics that erased overseas gains; and competition from Australia's erstwhile startups Virgin Blue and Impulse Airlines. Indeed, these same conditions caused a 22% midyear profit plunge at rival Qantas Airways.
However, ANZ chairman Sir Selwyn Cushing minces no words about the role Ansett Australia played in exacerbating ANZ's nosedive. Further, he admits that ANZ probably paid too much for Ansett last year. The purchase was finalised at a time when the carrier had just emerged from a drawn-out bidding war with Singapore Airlines that only ended with ANZ's purchase of Ansett's remaining half of the airline for A$580 million ($290 million), so that it could own all of Ansett Australia and 49% of Ansett International.
Ansett International has performed as best it...
Read the full article for free courtesy of your local library.
|
Bookmark this article
Print this article
Link to this article
Email this article
Digg It!
Add to del.icio.us
RSS
