Air NZ hires troubleshooter

By KEVIN TAYLOR

The company director who was "man of the hour" during the Kiwifruit Marketing Board's 1992 debt crisis is Air New Zealand's new chairman.

John Palmer's appointment to replace acting chairman Dr Jim Farmer, QC, was announced yesterday.

The airline has been in the wars this year as Australian subsidiary Ansett collapsed, Air NZ lost $1.4 billion in the June year - the biggest loss in New Zealand corporate history - and the Government committed $1 billion to a bailout.

Mr Palmer is chairman of Wrightson, Saxton Fruit and Nelson Fruit Services, and holds other directorships.

An agriculture industry share analyst said Mr Palmer was a pragmatist, but had a difficult job ahead with the airline.

Mr Palmer, who lives at Brightwater, near Nelson, with wife Sally, was Kiwifruit Marketing Board chairman from 1992 to 1997 and helped resolve the debt crisis in the industry.

Doug Voss, now executive chairman of kiwifruit exporter Zespri and back then deputy chairman of the Kiwifruit Marketing Board, said Mr Palmer helped ensure the bank debts were repaid, with interest.

"He was very much the man of the hour in 1992 and did a very good job of putting the business back on track."

Mr Voss has had little to do with Mr Palmer in recent years, but said he was intelligent and would probably face similar issues at Air New Zealand.

"Getting a business back on the straight and narrow - John has definitely had some experience in that area."

The agriculture analyst, who wanted to be anonymous, said Mr Palmer was a good operator.

"He understands all the governance issues associated with any public company.

"From his point of view it's important to get some aviation experience in terms of other directors onto the board."

Dr Farmer said Mr Palmer's track record demonstrated strong leadership skills, and he would bring to the airline much experience in "changing management structures".

Air New Zealand said in October that it was looking to cut about 800 jobs, half in management.

Mr Palmer became an Officer of the New Zealand Order of Merit in the 1999 Queen's Birthday Honours after leading the kiwifruit industry into a robust commercial position.

One of his first tasks will be to steer the Government bailout, which will give it an 82 per cent holding in Air New Zealand.

Another pressing job is appointing a new chief executive to replace Gary Toomey, who quit in October.

Mr Palmer's other directorships include AMP Bank. He has also been on AMP New Zealand's advisory board since October 1996.

He was chairman of TrustBank Canterbury and then chairman of Community Trusts Investments, a holding company which consolidated the interests of eight diverse trusts as part of the development of TrustBank New Zealand.

Air New Zealand said he was integral in the public float of TrustBank in 1994 and its sale to Westpac in 1996.

Mr Palmer was appointed to the Air New Zealand board on Thursday, filling the vacancy for a "B" director which has existed since the board composition changed on October 4.

Finance Minister Dr Michael Cullen said Mr Palmer had the right skills for the job.

"Air New Zealand is one of our most significant pieces of infrastructure so it is important to the whole economy that it performs well."

Dr Cullen said the recapitalisation programme was a vital first step in returning the airline to peak performance, but to complete the process the board needed the strongest possible leadership.

Act commerce spokesman Stephen Franks said the appointment was a good sign.

"He will have his work cut out for him - without previous airline experience - but I consider his chairing skills to be outstanding."

Mr Franks said Mr Palmer was not noted for toadying talents, so it would be interesting to see if he could fend off Government attempts to stack the board with politically correct token appointees.

Dr Cullen thanked Dr Farmer for leading Air New Zealand through its difficult period at "substantial personal cost".

"He took on the responsibility knowing what it would involve, and is to be respected for that decision."

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