Carter appointment hints at Air NZ sell down

Tony Carter's (above) appointment follows a succession process initiated two years ago when Palmer signalled this would be his final term on the airline's board. Photo / APN

Former Foodstuffs managing director Tony Carter will replace John Palmer as chairman of Air New Zealand as further signs emerge the airline will be sold down by the Government this year.

Palmer will step down after the company's annual shareholders' meeting in September.

Carter is chairman of Fisher & Paykel Healthcare and a non-executive director of ANZ Bank NZ and Fletcher Building and his appointment follows a succession process initiated two years ago when Palmer signalled this would be his final term on the airline's board.

Palmer has been chairman of Air New Zealand since November 2001. After its Australian subsidiary Ansett collapsed, it racked up a $1.4 billion full year loss - then the biggest in New Zealand corporate history - and needed an $885 million government bailout.

The airline has outperformed its peers since and last month substantially upgraded its pre-tax profit guidance to $260 million, fuelling speculation the Government could sell down its 73 per cent shareholding to 51 per cent sooner rather than later. Its shares have gained 16 per cent this year.

State-Owned Enterprises Minister Tony Ryall told TVNZ at the weekend he could not rule out a sale this year.

"Ministers are going to consider the Air New Zealand shareholding in the next few weeks and then we'll take advice and make a decision on that."

Palmer said he had committed to the board last year that he would see through the transition to a new chief executive.

"Now that Christopher Luxon and his management team are off to a flying start delivering our Go Beyond plan I am confident I will leave the business in tremendous shape," Palmer said.

Carter said he felt privileged to become Air New Zealand's chairman and paid tribute to Palmer.

"John took over as chairman in 2001 during one of the darkest periods in the airline and corporate New Zealand's history. Over the course of more than a decade John has ensured the board supported successive management teams under three outstanding chief executive officers to see the airline return to its place as one of the best in the world."

• A Morningstar note out late last week said Air New Zealand was the "best of breed". Its cost structure meant it was well positioned to endure pricing pressure from heightened competition and is well positioned to realise growth ambitions over the next decade with new Boeing 787 aircraft.