Air NZ CEO, Rob Fyfe, has grounded a suggestion from former Qantas CEO, Geoff Dixon, the NZ flag carrier could be at risk of takeover as the global airline industry struggles to combat sky high aviation fuel prices. Although Fyfe agrees the aviation industry will see larger players sweeping up smaller struggling airlines, the one reason Air NZ will not be involved is Govt ownership is set to remain. “Air NZ is in really good shape.” Fyfe remains optimistic the airline will survive as a stand alone business despite the wider industry turmoil. “We see ourselves as an airline that will not only be a survivor through this phase of the economic cycle, but we believe we’re going to come out the other side of this far stronger than our competitors.”

Consolidation Inevitable. Dixon has claimed Air NZ is a potential takeover target saying despite its relatively small size, the fast-changing global airline sector means the airline will come under more scrutiny. “I do believe very strongly and always have that consolidation will happen… it’s a small country, it’s a difficult business (and) scale will be very, very important.”

Turbulence Ahead. Despite the bullish outlook, Fyfe cautions the airline faces major challenges ahead saying it may need to raise prices again, cut costs and reduce capacity on some routes to counter rising fuel prices. Fuel costs have doubled to about $NZ2bn in the year ended June 30 and it has raised fares four times this year as it tries to offset the cost of a 50% increase in jet fuel prices the past six months. “We’ll be doing everything we can to mitigate the deterioration of financial performance on our business.”

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