Air NZ's Christopher Luxon says businesses which just cut back aren't doing anything useful

Air New Zealand chief executive Christopher Luxon. Photo / Brett Phibbs

Air New Zealand chief executive Christopher Luxon says businesses that just cut jobs, investment and customer service aren't doing anything useful and needed to think more broadly about their bottom line.

"I could get a much higher share price for Air New Zealand in an instant by cutting jobs, cutting investment, cutting customer service and culture," he said at the airline's sustainability event today.

"The reality is that the business world is sadly littered with companies that are just cutting costs and ultimately not fulfilling their purpose to do anything useful in society. That's pretty sad."

The reality is that the business world is sadly littered with companies that are just cutting costs and ultimately not fulfilling their purpose to do anything useful in society. That's pretty sad

Christopher Luxon

He said business had a responsibility to define success more broadly than solely in commercial terms. Air New Zealand's board demanded the company achieved three very interdependent goals; commercial returns, enhanced customer experience and a strong people culture within the business.

"We have this responsibility or liberty to run our businesses as we see fit but we have this responsibility to build a stronger civil society along the way," he told an audience of nearly 400 in Auckland.

More discussion about a sustainable future around last month's election was encouraging.

"What is encouraging for us is that New Zealanders are starting to understand that sustainable development in its fullest sense is about how we progress the country - socially, environmentally and economically.''

All business leaders should be very passionate about sustainable development as the world faced unprecedented challenges including climate change, quickening population growth, infrastructure problems, volatile commodity markets and rising inequality.

"The challenges are getting more extreme and organisational leaders have to deal with them," he said.

The increasing impact on people's lives was profound.

"I know that Kiwis don't want a society driven by short-term gains - statistics on regional inequality and housing supply are not ones to be proud of. We must find a better way forward," said Luxon in the report which assessed the airline's environmental, social and economic performance.

A section on gender pay released by the airline for the first time shows men were paid 0.44 per cent more than women on individual employment contracts.

This compared to a national average favouring men by 9.4 per cent.

"We are confident that this difference represents differences in tenure, experience and performance," the airline said.

There were 1203 women and 1143 men covered by the report. At the top level - executives, general managers and head of function - the difference was 0.33 per cent while at the support and administration level women were paid 5.25 per cent more.

The biggest difference favouring men was among senior managers where men are paid 0.99 per cent more than women.

Gender pay gaps were calculated on averaged annualised full-time equivalent salaries.

Staff on collective contracts are not included in the calculation.

"Pay rates within Air New Zealand collective agreements are skills, competency or service based, ensuring all employees with the same levels of service or skill in the same role will be paid the same," the report said.

Luxon said the airline had not always taken advantage of diversity among its 12,000 staff. In 2013, when he started in the top job, women made up 40 per cent of the company but only 16 per cent were in senior leadership roles.

Now women in top roles had reached 39 per cent, just short of the 40 per cent target.