Toomey appointees in firing line

By DANIEL RIORDAN

Gary Toomey's handpicked executive team at Air New Zealand are obvious redundancy candidates as the national carrier implements its restructuring, likely to cost millions in redundancy payouts.

As many as 800 positions are going, about half of them in management, as Air New Zealand regroups after cutting subsidiary Ansett adrift and grappling with the slump in the world aviation market after September 11.

Executive director Roger France, who is piloting the national carrier until a replacement is found for former chief executive Mr Toomey, has cautioned the final number of cuts could be more.

Several of the airline's top tier of executives are likely to go as their positions are made redundant or they decide to pass on the challenges at an airline less than half the size it was when they joined.

Under the restructuring plan unveiled by Mr Toomey in February, the company had 11 divisions run by 11 senior vice-presidents, reporting directly to him.

The new structure will have seven divisions and seven direct reports: sales, marketing and distribution; customer service; operations and technical; ventures; finance; strategy and planning; human resources, organisation change and communications.

The game of musical chairs is made slightly easier by the recent retirement of Laurie Doolan, senior vice-president for corporate, government and international affairs, who was not replaced.

The only new divisions to match up directly to the old are finance and ventures, which covers cargo, regional airlines and Freedom Air. Those divisions are headed by two former Qantas staffers who came over with Mr Toomey: chief financial officer Adam Moroney and Andrew Pondekas.

The biggest head-to-head clash looms in operations and technical, where senior vice-presidents Bill Jacobson (head of engineering) and Trevor Jensen (head of operations) will fight for one job.

Mr France has just begun his review of the candidates and hopes to have the complete restructuring finished by Christmas.

Airline spokesman David Beatson said this week no senior executives had left following Mr Toomey's resignation on Tuesday.

The casualties - willing or otherwise - are likely to include managers brought to the airline by Mr Toomey, some of whom Mr France said might not want to stay, since Air New Zealand and New Zealand in general was not their natural home.

Alongside Mr Moroney and Mr Pondekas, they include Kevin Turnbull, senior vice-president business performance enhancement and IT, two vice-presidents - Karen Waddell (finance) and George Deladakis (financial planning and analysis) - and about a dozen more managers further down the command chain.

George Frazis, senior vice-president strategy, network and marketing, joined from Boston Consulting, where he had worked closely with Mr Toomey and Qantas.

Six of the senior vice-presidents are based in Australia: Mr Jensen, Mr Miller, Mr Pandekas, Lesley Grant (customer service), Brendan Fitzgerald (airport services) and Mr Frazis.

Those who joined with Mr Toomey will almost certainly have negotiated generous redundancy provisions in their contracts. The total redundancy bill is likely to come to millions.

Air New Zealand's last annual report, dated August last year, showed 168 managers earning more than $100,000 a year.

Sean O'Sullivan, an employment law specialist with law firm Phillips Fox, says senior executives on fixed-term contracts who are forced to leave typically have clauses in their contracts entitling them to payments for the balance of their contract term, in situations where they are unlikely to get employment for a while.

Where a contract is not fixed-term, executives made redundant generally can expect to receive about a year's salary.

Mr France will finish his caretaker role as soon as a chief executive is appointed - which he hopes will take no more than six months.

One aviation industry analyst said there would be no shortage of experienced candidates given the layoffs taking place in world airlines at the moment.

Andrew Miller, vice-president in charge of sales and distribution, looms as the leading internal candidate.

Employment law specialists suggest Mr Toomey's golden handshake could be anything from around $2 million (believed to be close to his annual salary) to $4 million.

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