AIR - Air NZ.

[blackcap]

I have an extremely strong connection to this company and am a shareholder. My thoughts as an interested long term observer....

1. Luxon (or Low Wage Luxon as he was often cheekily referred to by Air NZers) did bring his personal values to the office. His memos to staff were frequently peppered with references to his do good religious activities of himself and his family.

2. He most certiainly stopped the PINK FLIGHTS. They were commercially profitable but he personally intervened to stop them.

3. Luxon will not make a excellent leader of the country if that is what he seeks. He presided over a business that makes the huge percentage of its money from a near monopoly domestic business. It struggles in the competitive international space (It's a bloody tough business though). Luxon has in part held the numbers up by relentless focus on costs and that's great until you understand what that means and how it was achieved:

- He oversaw the casualisation of full time jobs into split shift broken hours and reduced benefits of more vulnerable workers such as aircraft loaders and check in staff. It is common for these 'part time - full time workers to require secondary employment.
- He oversaw and encouraged the 2014 cabin crew Project Choice as it was called. This essentially when all was said and done created a huge pool flight attendants (thank you John Key and the tweeks to employment law which kindly allowed for parallel employment contracts with vastly reduced salaries and benefits for the exact same work. It was a sensational transfer of money from workers to shareholders and reduced the cost of labour by many millions annually.
Result? - sharply increased staff turnover, reduced customer satisfaction ratings, far greater absenteeism, an enlarged head office workforce to manage the same work groups now with vastly different contracts.

- He allowed his team to attempt to, once again, take the razor to the engineers who were less vulnerable and had a strong worker union and were able to fight back.

Luxon's legacy to those inside the company is one of wealth transfer from workers to shareholders. It was no suprise then that his first political speech was straight into the old National chestnut - welfare, low income and beneficiary bashing.

Will he be a great leader for NZ - He'll look great and speak well. He'll would represent NZ well on the global stage. Less visibly I have no doubt he will behave as a Nat behaves - expect less humanity, stricter provisions for the poor, mentally ill, disadvantaged etc

I realise I will be slated here but these are my observations (yes I know Christopher and have had more than one direct conversation with him - I do not dislike the guy, he's a charming speaker and has a charisma but it must be acknowledge that he was a world view that most Kiwis will not identify with)

Reading your comments here, I think Luxon has done a great job. Wealth transfers to shareholders are a good thing. In a free market if you can get more out of workers for less and shareholders get a better return that is a good thing. The balancing act is to pay the worker enough so that they will be happy and stay or just not enough to get rid of the disgruntled ones. Seems like Luxon fulfilled that quite nicely. As Beagle said, if the average wage is $120k the workers have absolutely nothing to complain about. Good job!

[stoploss]

Reading your comments here, I think Luxon has done a great job. Wealth transfers to shareholders are a good thing. In a free market if you can get more out of workers for less and shareholders get a better return that is a good thing. The balancing act is to pay the worker enough so that they will be happy and stay or just not enough to get rid of the disgruntled ones. Seems like Luxon fulfilled that quite nicely. As Beagle said, if the average wage is $120k the workers have absolutely nothing to complain about. Good job!

Is there a correlation between high salaries and poor performance , just thinking of Fonterra here ... what’s David Darling on ? 😂

[mondograss]

Average wage at Air NZ appears to be $75k according to this:
https://www.payscale.com/research/NZ...904%20a%20year.

However, if you move a lot of the low paid staff such as ground crew and cabin crew to contracted\casual roles or contracting them out via third party subsidiaries, it would also have the effect of lifting your average wage.

[Beagle]

I just divided the total wage bill of $1.35b by the number of Air New Zealanders which from memory is eleven thousand or so, probably a bit more now.
Acknowledge this is probably too simplistic and full time employees have probably gone up and there will be quite a number of part timers.
AIR has been voted favorite employer of the year for some years now and I remain of the view that unionised workers have definitely been getting annual increases for many years at noticeably above the inflation rate which has the cumulative effect of making the airline much less competitive.

[winner69]

Wonder what a respectable return is for human capital

[Beagle]

A living wage ?

[mondograss]

Living wage is about $43k I think. But if you've got staff doing split shifts or casual hours then you're effectively tying up their human capital for a lot longer than you're actually paying them for.

[Benny1]

I have yet to find anyone I'm working with on an average wage of $120,000.
The reality can be quite different from a hypothetical calculated average..
I'll leave it at that.....

[Beagle]

Page 67 of the annual report is pretty illuminating.
580 people on 100 - 110K,
512 people on 110-120K
547 people on 120-130K
1639 people, nearly 16% of the entire workforce on around that sort of money.
You need to get along to work functions to socialize within the company ranks more Benny Plenty of people on that sort of money, very, very common and not justn within management ranks by any stretch of the imagination.
74 people in Aircrew, engineering, overseas and others (excluding management) earning $280-290K is pretty notable too as is another 24 of them on $420 - 430K and another 20 staff on $440 - 450K. Management numbers earning that sort of coin are actually very low by comparison.
Of course the CEO and CFO earn the big bucks but there's a vast number of others that do extremely handsomely from the company as well and that's a fact recorded in the annual report, not just my opinion.

[Beagle]

AIR doing its best to keep Raz and his mates happy. https://www.nzherald.co.nz/business/...ectid=12285080