Air New Zealand chairman Tony Carter will step down next year and be replaced by current director Dame Therese Walsh.

The airline said Carter had earlier signalled to the board that 2019 was likely to be his final year as chairman to adequately plan for his succession.

His departure could make for an easier relationship with the Government.

This year he became embroiled in a sharply worded spat with regional development minister Shane Jones who questioned the airline's commitment to the regions and called on Carter to quit.

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Carter issued a strongly-worded warning to Jones about the airline's need to operate with financial independence from its 51 per cent owner - the Government - with which relations have become more difficult.

Air NZ chairman Tony Carter will retire at the end of the year / Jason Oxenham.
Air NZ chairman Tony Carter will retire at the end of the year / Jason Oxenham.

Former Prime Minister John Key joined the Air New Zealand board last year and was seen as a possible contender as next chairman but the change of government shortly after his appointment is seen as having put paid to that.

Walsh has been on the board for two years and after a directors' vote will be the airline's first woman chairman.

''Importantly, she is highly customer centric and intimately understands the role of iconic brands to supercharge our nation's success," Carter said.

She is currently chairman of TVNZ, which she will quit when she steps up to the top Air NZ role and is a director of ASB and Contact Energy and a previous director of the NZX.

She is also a trustee of Wellington Regional Stadium, a Board member of Antarctica New Zealand and Pro-Chancellor at Victoria University.

In her management career, she held roles including chief operating officer for the 2011 Rugby World Cup and head of New Zealand for the 2015 Cricket World Cup.

When she was made a Dame in 2015 the citation said she was able to ''manage large workloads, work effectively in high-pressure situations and strong relationship skills are well regarded by her peers".

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Before that, she was the chief financial officer at NZ Rugby and an auditor at KPMG.

Walsh said she was ''humbled'' to have been unanimously elected chairman-elect of Air New Zealand.

"I have had the privilege of working with an outstanding chairman, board, chief executive officer and executive team at Air New Zealand for the past two years.''

She will take up the position of chairman at the airline's annual meeting in September next year.

''I look forward to continuing the great work we are doing to supercharge New Zealand's success. The fortunes of our airline and our nation are inextricably linked," she said.

Chief executive Christopher Luxon welcomed her selection.

"I'm excited about working more closely with Dame Therese, who will be an absolutely excellent chairman. I am in no doubt that she will both challenge and support the executive to make our airline even more successful," Luxon said.

In another change in June the airline appointed Labour's party general secretary Andrew Kirton as head of government relations.

Kirton, who was Labour's campaign manager, replaces Duncan Small, who is married to National List MP Nicola Willis.

The airline will announce its annual result on August 23 and, in spite of sharply higher fuel costs, has repeatedly stated it is on track to report its second best result in its history.

One analyst said Carter had done a ''great job'' navigating some big changes at the airline, dealing with significant growth and changing industry dynamics.

''Certainly the business is in a strong commercial and financial footing on his departure.''