Photo / Peter Meecham
A year of strong strategic direction and the highest profit record in a decade, has seen Air New Zealand secure the company of the year award at the Deloitte Top 200 Awards for 2014.
This year, the national carrier celebrated its third consecutive year of revenue growth with shares reaching their highest level in more than five years. It also saw the roll-out of the new Dreamliner fleet and further investment in new planes as well as alliances with China and Singapore.
The airline has around 11,000 staff and carries around 13 million passengers on 200,000 flights a year. During the judging process for the award, Air New Zealand's success at at time when other airlines had been struggling, was noted as a key point in the company taking the award.
"Air New Zealand seriously punches above its weight in the international aviation arena and in a tough industry," the judges -- Dame Alison Paterson, Sandy Maier and Neil Paviour-Smith said in their unanimous assessment that the company was the clear winner.
"Tony Carter as chairperson and chief executive Christopher Luxon have transitioned well leading to 2014 as a standout year with the successful execution of the government's share sale, new strategic alliances and a massive investment in new planes."
Earlier this year, the company announced it would be spending $2.2 billion over the next four years on new aircraft, starting with the arrival of the long awaited Dreamliner.
The first of 10 787 Dreamliners arrived in July, set to replace aircraft that were no longer as fuel-efficient. At the time Luxon described the airplanes as "game-changing", and according to the company, the planes are already living up to expectations, saving up to twenty per cent in fuel costs.
The strength of the Air New Zealand brand and reputation as the national carrier was also mentioned as a factor in the decision.
"It has now gotten to the point where all New Zealanders consider [Air New Zealand] to be 'our airline' with an amazing amount of engagement between the flier, the passengers and the airline," the judges noted.
"The quality of their service; their approach to dealing with customers and their role in the community all go to making it a brand that Kiwis feel very comfortable with."
The significant full year result, which saw net profit increase by 44.75 per cent to $262 million, has been attributed to several factors, including the airline's decision to stop flights out of Beijing, London and Hong Kong and redeploy the planes to higher margin routes. Luxon said the company's focus had been on increasing demand for the aircraft, and improving international routes.
"We don't want to be a supply-driven airline, where we just buy aircraft and then figure out where to send them. We actually want to be demand-driven," he said.
Luxon's leadership role in the company's success was commended by the judges, who noted his direction and commitment were major factors in the company's continued success.
Luxon is known as a highly inclusive leader and insiders say that from day one he sought to build a culture of honesty, trust and respect with both his executive and senior leadership team (top 70 managers) which has been a key enabler to the airline moving to an even better level of high performance.
The company will celebrate its 75th anniversary next year, and chairman Tony Carter said they were expecting another positive year in 2015.
"With new aircraft offering better operating economics, an optimised network with the right alliance partners, disciplined cost management and a daily focus on improving the customer experience, we are very well-positioned to continue growing."
The start of 2015 will be boosted by a revenue-sharing alliance with Singapore Airlines. The return to the island state after a break of seven years is seen as having major benefits for Air New Zealand as well as giving the company scope to build on business in Southeast Asia.
The Singapore route is regarded in the industry as one of the most attractive Asian courses, with a relatively high mix of premium passengers.
There are also no signs of any other airlines challenging Air New Zealand across the Pacific with direct flights to North America.
The airline also has alliances with Cathay Pacific and Virgin Australia, in which the company has a 25 per cent stake, as well as the latest agreement with China.
A spokesman for Air New Zealand said their new strategic direction was focused on delivering results in every quarter, allowing the company to reinvest in further growth.
"The airline is more than ever focused on delivering results month-by-month, quarter-by-quarter to be able to make sustainable profits to reinvest back into the business.
"[This enables] Air New Zealand to buy new aircraft like the 787s, additional ATRs for the regional fleet, bring forward orders, upgrade lounges in places like Sydney and Auckland international, improve our in-flight offerings and enhance the loyalty programme among other things."
Over the past two months, the airline has benefited from a 20 per cent drop in jet fuel prices as well as strong sales. Based on these early signs, the company has predicted it is heading into a period of continued growth, predicting an increased profit in the 2015 year.
"Further, should the current level of jet fuel price persist, there will be significant additional improvement in earnings in the second half of the financial year," Air New Zealand said in an update to the NZX.
The Top 200 judges singled out Briscoes as a "long term success story in a tough sector".
Led by the redoubtable Rod Duke - who also features as a finalist in this year's Executive of the Year - Briscoe has continued to prosper on the back of its aggressive promotional activity.
Duke highlighted this when he recently told the market he expects the homeware and sporting goods retail chain will "easily exceed" last year's annual profit.
The contributing factor was third-quarter sales which rose 4.5 per cent on the strength of its sporting goods unit maintaining momentum through the start of the year.
Briscoe is chaired by Dame Roseanne Meo and numbers the experienced retail executive Mary Devine among its directors.
The judges acknowledged Briscoe's prowess in the highly competitive retail market which operates on thin margins. "We are very pleased with the group's performance across this third quarter in a market which continues to demand aggressive promotional activity to drive sales," said Duke. "We are certainly encouraged by our performance to date and are confident that the group's full-year tax-paid profit will easily exceed last year's tax-paid profit result of $33.58 million."
Duke said all of the company's key performance indicators were ahead of the same period for the nine months to October 26, and the company was "optimistic in our outlook."
Fidelity Life's chief executive Milton Jennings was so pleased at the company's inclusion as a finalist for Company of the Year he put out a statement.
"The company has been on a rapid growth path and the last two years have been the most eventful in the 40-year history of Fidelity life," he said. "We have enjoyed strong performance results and set out an ambitious future direction for the business. We have demonstrated to the New Zealand market that we're a major force in the local financial services industry.
"An important innovation has been our work in creating integrated services with third party providers of industry software advisers. We have led the industry in this area, continuing to add value to the adviser relationship through technology services."
It's a self-assessment that would have found favour with the Top 200 judges. They noted the increase in Fidelity underlying profit up 24 per cent to a record $22 million on the back of growth "all driven by the business".
"It's a company that does things. It has added value. The results look good. It's not often that the financial stocks are recognised but this is a deserving finalist."
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