AIR NEW ZEALAND: Ex CEO Christopher Luxon to become Prime Minister of New Zealand. Will trouble with unions come next?

Over the weekend, New Zealand held its national elections. It looks like Christopher Luxon, leading the National Party has won. He will govern in coalition with preferred coalition partner, libertarian ACT party and Winston Peters’s unpredictable, New Zealand First.

What’s this got to do with Airlines?

Well, dear reader, Mr Luxon was the CEO of Air New Zealand for eight years starting in 2012. He joined the Virgin Australia board in 2014. Joe Ashton described him as James Borghetti’s (then CEO of Virgin) nemesis. In his first board seat, Luxton perked up and declared that it was time for Virgin Australia to ‘get profitable‘. That comment raised quite a few eyebrows on both sides of the Tasman. This departure from traditional notions of board solidarity was seen as some peacock freelancing.

His leadership of Air NZ saw its profits soar. The brand became one of the most trusted in, of all places, Australia. His leadership was tinged with acrimony with unions, especially the Aviation and Marine Engineers Association, over pay disputes. His resignation from Air New Zealand coincided with the start of his political career in 2019.

What he did to Air NZ might indicate what he will do with the nation of New Zealand

As Air NZ CEO, Luxon had many successes, including shepherding the airline successfully through the global financial crisis. The company was one of the best places to work, was profitable, and returned dividends to shareholders under his leadership.

On the negative side, the company had to revise its profit guidance in his final year. Sharing a similarity with Qantas’s Alan Joyce, was the highest-paid CEO of any company in New Zealand.

Post his leadership of the airline, Luxon was involved in a bit of controversy regarding a subsidiary of Air NZ assisting the Saudi Navy when they were blocking vital supplies like food, water and medical assistance to Yemen. It gets complex, but it may have been that Luxon wasn’t aware of the military contract. Not knowing can be a sin of omission in itself.

From his customer focus in his work with Unilever and Air NZ, he sounds like he will be a populist, which seems to be the new definition of conservative. That might mean he plays well with the libertarian ACT Party in coalition. A pro-lifer, having been brought up as a catholic, he has vowed to maintain NZ’s largely progressive abortion law changes passed in 2020.

Luxon like Australia’s Morrison

He seems to share some of the qualities of Australian Ex-Prime Minister, Scott Morrisson. They both have had a social media location scandal. For Morrison, it was pretending to still be in Australia when he was on holiday in Hawaii. A similar thing happened to Luxton, and Hawaii was also involved when his social media feed implied he was visiting Te Puke – NZ’s Kiwi Fruit capital, but he was actually in the islands of aloha. They also share a leaning towards the evangelical Christian. Unlike Morrison, Luxton is rich, owning a combined property portfolio worth over $21 million.

2PAXfly Takeout

I’m not sure what there is to learn from Luxon’s time at Air NZ as a guide to where he will take New Zealand. Competent business people don’t always make for competent and successful politicians. His ‘small target’ approach to the NZ elections didn’t protect him from getting into hot water over Maori rights among other issues. He’s been described as ‘a bland CEO with zero intellectual curiosity and bare competence’ on the NZ political blog platform The Daily Blog.

It looks like Luxton is good with people and understands the need to keep employees happy in an organisational context. As others have found, keeping a country’s citizens happy can be much more challenging, especially those as fickle as New Zealanders. Remember, they just cut their support by 50% for the incumbent Labour Party, formerly led by Jacinta Ardern.

Luxon is an inexperienced politician with only a couple years of experience and has never run a coalition government. Now he will have to run a fractious country during an inflationary recession, lead a nation still recovering from the impacts of COVID lockdowns, and hold together a coalition with probably three very diverse members, including a libertarian party and the maverick Winson Peters.

In retrospect, running the state airline of a small Pacific nation might seem like a walk in the park