Shane Jones v Air NZ: MP tells CEO to butt out of 'political boxing ring'

Author: NZ Herald,
Publish Date: Wed, 21 Mar 2018, 10:14AM

Regional Economic Development Minister Shane Jones has taken aim at the board of Air New Zealand, with his sights set on chairman Tony Carter first.

"Obviously you'd start with the chairman … I'm telling that board, in terms of the growth and connectivity in provincial New Zealand, it will not increase unless that board changes," Jones told RNZ this morning.

Jones, who has been highly critical of Air New Zealand's decision to cut flights to Kapiti, also warned Air New Zealand chief executive Christopher Luxon to butt out of politics.

"Do not poke your nose into the political boxing ring unless you're going to resign today and join the ranks of the National Party. This is a legitimate issue on behalf of those provincial areas who have been shortchanged. I've said all along, my focus is on the board."

Jones said there were other models besides cutting regional services which the Air New Zealand board could pursue to satisfy investors.

"If they are unwilling to adapt the model to deal with the degradation of provincial connectivity in aerial routes then they're not serving the purpose of the majority shareholder."

Jones was responding to comments earlier today from Luxon, who said independence from the Government had been good for the company.

"This company is an independent company and needs to be an independent company and doing so has been really good for Air New Zealand in terms of we can innovate the way we want to, we make commercial decisions so that we can invest in the right way, so we can buy aircraft that are really expensive … it's been a very good success story any way you'd look at Air New Zealand over the last wee while," Luxon said.

Luxon denied Air New Zealand had been shortchanging the provinces and said the company was proud of what it had delivered in the regions.

"That's partly why we took issue with Shane's comments yesterday, because while they are his opinions they're not consistent with the set of facts that we see."

Air New Zealand had delivered almost two million more domestic seats and reduced regional airfares 8 per cent over the last three or four years.

"We've got one of the best regional networks of any country on Earth," he said.

On Tuesday Air New Zealand took the unusual step of spelling out to the Government the commercial relationship it has with the Crown after sustained attacks of its approach to the regions by Jones.

The airline has written to Finance Minister Grant Robertson, who represents the Government's 51 per cent stake, and told him it will always act independently.

"Any appearance of a lack of commercial independence is viewed seriously by the Air New Zealand board and is ultimately potentially damaging to the interests of all shareholders, including the Crown.''

Luxon said despite clear ''terms of engagement'' there could be a misunderstanding about the Crown's stake and what it means.

"The Crown has the same rights as any other shareholder. That doesn't mean they can dictate the operations of the company, they can't use their majority shareholder position to make the company make non-commercial decisions," Luxon said.

"Decision making is with the company board and the Treasury expects all those decisions to be commercial."

In the wake of the axing of services to Kapiti, Jones said Kiwis in the regions got better treatment from second-hand car dealers than Air New Zealand, and issued a call to arms for regional mayors to save provincial flights.