Christopher Luxon: ‘I am a big believer that you have to get connected to a mission and a purpose bigger than yourself’
From the archives: Air New Zealand made a record profit at the time it was under chief executive Christopher Luxon. As Parliament resumes, with Luxon now Prime Minister, we look back to this 2016 feature from the Listener archives, where he discusses with Guyon Espiner how his financial and moral compass guided an airline that’s so important to New Zealand’s economic success.
God-fearing man from Christchurch named Christopher performs something close to a daily miracle: his airline makes money from the furthest reaches of the earth.
Not only has Christopher Luxon made Air New Zealand money, he’s also delivered a record profit of $327 million and shared the wealth. It’s not quite dividing the loaves and the fishes but 8000 unionised staff received a $1400 bonus in 2015 and will do so again if the success continues.
Coming of age in the late 1980s and witnessing the wreckage of the first faltering steps of the unshackled New Zealand economy, Luxon divined he would be a moral force in business. Making money was important but so was doing good – hence his bent for profit-sharing and sustainability.
But three years into his tenure as chief executive, the skies are darkening with competition. Swooping in are operators from Australia, Asia and the Middle East, all trying to sink the fortunes of the national carrier.
And then there’s the pesky problem of uppity Wellington. Civic leaders are pushing ahead with a $300 million plan to extend Wellington Airport’s runway to service long-haul flights. Luxon is strongly opposed, fearing Air New Zealand may have to help pay for a white elephant. He’s warning that those extra costs could put more of the airline’s already pared-back regional routes at risk. There’s a lot to keep the 45-year-old father of two awake at night. But he insists he sleeps soundly, if only for five hours a night.
Understanding customers
Luxon travels the world meeting people who can’t believe his airline prospers. “People say to me, we don’t know why you exist. There are no countries with 4.5 million people that even have an airline. How do you survive?” Back home it’s almost the opposite. “There has been a lot of talk about our profitability and sometimes in New Zealand you almost have to apologise for making money,” Luxon says.
“It’s not good when you lose money, it’s not good when you make money.”
Air New Zealand has experienced both. The nadir came in 2001 when it was bailed out by the Government to the tune of $885 million. It’s one of the few airlines in the world to be profitable every year since, in an industry with staggering capital costs.
A new turbo prop plane for regional New Zealand travel costs $25 million; every plane flying between Auckland and Wellington is worth $50 million and a new long-haul Dreamliner is $200 million. So how has Air New Zealand turned in record profits?