Introduction

This strategic plan aims to guide Air New Zealand (ANZ) to enhance business performance. Due to the pandemic and the New Zealand borders closure, the business had a significant impact, cancelling international operations and dismissing one-third of its workforce. Nowadays, after two years of operating at a fraction of its capacity, the perspective of returning travellers to Aotearoa, the organisation must be ready to take advantage of the perspective and generate profitability. However, while lacking talents in the industry, facing unstable international fuel prices, and a pandemic not yet sorted out, the organisation encounters a challenging world to operate. Therefore, the pillar for this strategy is people-first by approaching organisational culture and transformational leadership—one to encourage people to generate innovation to create competitiveness. The other should captivate thousands of employees as part of an organisation that traditionally provides top-notch customer service. As a result, the business should generate sustainable profitability while ranking top positions in customer satisfaction in the next three years.

Cover letter

Dear Air New Zealand’s CEO, Greg Foran,

This consultancy is delighted to introduce a strategic plan to support Air New Zealand to achieve sustainable growth while bouncing back from the pandemic aftermath. Therefore, people are at the heart of the strategy because they are decision-makers and creative innovators while maintaining a customer-centric operation and providing excellent customer service. In addition, adopting the transformational leadership method should support Air New Zealand in fostering great organisational culture while captivating current and new employees to perform at their very best. As a result, the business should perform at the state-of-the-art and generate profitability. Finally, Air New Zealand shall have recognition as a top-notch organisation in the industry, satisfying customers and shareholders.

Kind regards,

Marcelo Lane

1. Background

ANZ is New Zealand’s top-notch international airline competing with industry leaders and winning numerous awards for a top corporate reputation (Air New Zealand, 2022a).

Since its foundation in 1940, ANZ has built a solid corporate reputation and high profitability (Craft, 2022). However, the pandemic in early 2020 affected the company significantly. In parallel, New Zealand’s government decided to close borders, preventing ANZ from operating at its full potential. Hence, annual revenue growth of about $ 5.6 to $5.8 billion from 2018 to 2019 dramatically dropped to $2.5 billion in 2021. Additionally, massive 4400 redundancies took place in 2020 from 12500 employees, whereas 85% of the long-haul cabin crew fleet turned redundant during 2020 due to crisis (Bradley, 2020).

Nowadays, ANZ has become mainly a domestic airline business with 7840 employees and $1.6 billion in revenue (Owler, 2022). Previously, the organisation supported operations by performing 2/3 of international and 1/3 of domestic flights, while 1/3 of these resulted from international visitors (Yandall, 2020). Nowadays, ANZ explores New Zealand’s domestic tourism at 100% of its capacity and international cargo opportunities to keep the business afloat. Moreover, NZ’s Government gives financial support because they are 51% shareholders of ANZ (Sharesies, 2021).

Currently, NZ’s Government announces that borders will open from August 2022. Then, 1200 employees have just returned on board while the CEO expects operations at their pre-pandemic status in 2025 (O’Driscoll, 2022). Therefore, hiring about 3200 employees shortly.

Therefore, a strategic plan to support organisational growth is paramount because the landscape shows the challenges and opportunities.

Firstly, attracting top talents to the business involves finding people and training them to fit into the organisational culture.
Secondly, the “post-pandemic” reality requires an outstanding customer experience in the competitive long-haul flight market.
Thirdly, most airlines kept operating rather than ANZ, which stood grounded due to New Zealand’s borders closure. Therefore, competitors are more experienced than ANZ. Additionally, most airlines are also fighting to bounce back from financial losses, indicating a ferocious competition.
Fourthly, the perspective of ANZ’s growth, while there is an uncertain future, is the opportunity to innovate and streamline operations. Therefore, attracting talents is an opportunity to embrace leadership to support sustainable growth.

2. SWOT Analysis

Strengths

1. Business experience: ANZ has 60 years of successful operation. It includes competing among the best airlines globally and performing with high profitability. Moreover, they harness an excellent reputation that contributes to scaling performance and retaining talents (NZ Herald, 2121).

2. Financial support: New Zealand’s government has 51% of ANZ’s shares and, therefore, facilitates raising capital to invest in people, new technologies and cutting-edge aircraft.

3. Top-notch aircraft, including 14 Boeing 787-9 Dreamliner, provide an excellent customer experience (Air New Zealand, 2022b)

4. Critical clusters: ANZ has successfully defended essential points of operation throughout the pandemic, mainly in the US. Then, this is vital to the business operating at 100% of its capacity once tourism and business travel to New Zealand again. Otherwise, travellers might head to New Zealand using other airlines, like Emirates and American airlines.

5. Employees: although 85% of pilots and crew members of long-haul flights became redundant in 2020, the remaining received regular training. It guarantees ANZ’s minimum critical operations when New Zealand borders re-open. Additionally, employees recognise ANZ as a top company for work (Randstad, 2019).

6. Internal tourism: ANZ has optimised its operations in New Zealand and explores currently 100% of its capacity.

7. Tech-savvy: the business has the skills to harness technology and promote innovation (Parker, 2019). Therefore, customers expect a superior experience when travelling by ANZ (Aldworth, 2015).

Weaknesses

1. Operational costs: since 2020, the business cannot operate cost-effectively because the grounded fleet implicates financial losses. They are costly assets and exist to generate profit. However, the pandemic has prevented them from operating.

2. Finance: currently, ANZ relies on shareholders’ to operate because the pandemic impacted finances significantly.

3. Workforce: nowadays, ANZ lacks a significant part of their employees, about 85% of its international crew and other necessary roles in the short term.

Opportunities

1. Boarders opening: New Zealand expects to gradually welcome travellers from August 2022 and scale operations.

2. Finance: Opening borders is a massive opportunity for ANZ to operate at its full potential, generating profit.

3. The New Zealand government’s support is vital to raising capital to hire talents, acquire cutting-edge aircraft and invest in new technologies. Therefore, providing solid ground for sustainable growth in the long term.

4. Talent: bringing talents on board is an opportunity to provide an outstanding customer experience and stand out from the competition.

5. Cost-effectiveness: growth brings the opportunity of incorporating talents that will deliver the best business outcomes by streamlining operations while approaching contemporary strategies matching a pandemic reality.

6. Australia, China and the US are central markets for attracting travellers. ANZ has successfully secured positions from its locations to generate profits again.

7. New technologies: new technologies can support sustainable growth by automating tasks, facilitating employee decision-making, or tackling flight efficiency challenges.

Threats

1. Pandemic: the surge of new Covid-19 variants is a risk to the airline sector.

2. Fuel prices: Ukrainian war has impacted fuel prices, resulting in higher operating costs.

3. Competition: numerous airlines have not stopped operating during the pandemic, which gives them experience in dealing with pandemic issues and an advantage in customer experience.

4. The New Zealand government may close borders to prevent the spread of aggressive Covid-19 variants or another pandemic.

5. The talent shortage is an issue in New Zealand. The country has about 3.2% unemployment because of successful economic development while maintaining borders closed since 2020. Currently, talents have higher wages and minor availability than before, which indicates a threat to sustainable growth in the long term.

Problem statement

The SWOT analysis effectively points out factors that might contribute to the business’s success contrasting with threats and weaknesses that might hinder ANZ from harnessing a leading position in the industry (Phadermrod et al., 2019). Therefore, the following SWOT analysis embraces enough elements to sustain critical guidance to ANZ to bounce back from the pandemic crisis, backed up by sustainable advice.

The mix of strengths and opportunities points out a scenario for growth:

1. The eminence of high demand: after two years, New Zealand is fully opening its borders to international flights from July 31, 2022.

2. Readiness to operate from critical regions: offices and airport slots in the USA, Australia and China.

3. Readiness of critical assets for long-haul flights: pilots, aircraft and crew members.

4. Financial support from shareholders.

5. Benefit from having an excellent reputation as a vital asset to support business growth.

6. Digital-first strategy in the business core generates innovation and surprises customer expectations (Putt, 2021).

While shareholders mitigate financial issues, addressing additional risks is vital. They are a mix of threats and weaknesses.

1. Finance: is a significant threat because it prevents businesses from operating and providing excellent customer service. Since the pandemic, ANZ cannot generate enough profit to support operations (RNZ, 2022).

2. Employment: Finding people is challenging due to current skills scarcity in New Zealand. Moreover, lacking top talents is a threat because they generate innovation, resulting in quality customer service and competitiveness.

3. Fuel prices: the international fuel supply chain shows no improvement perspective shortly.

Risk analysis

Risk	Mitigation
1. Finance is a significant threat because it prevents businesses from operating and providing excellent customer service.	· ANZ is doing well in raising shareholders’ financial support to keep operations afloat (RNZ, 2022).
2. Employment: Finding people is challenging due to current skills scarcity in New Zealand. Moreover, lacking top talents is a threat because they generate innovation, resulting in quality customer service and competitiveness.	· The business may rely on its outstanding reputation to attract top talents and operate at its best. · Organisational culture is key to maintaining a thriving business environment to foster collaboration, innovation and excellent customer support. · Transformational leadership will support operations to perform at an optimum state while captivating new and current employees.
3. Fuel prices: the international fuel supply chain shows no improvement perspective shortly.	· So, the long-term bet is to rely on the latest technologies to optimise operations (Wixom et al., 2008) in parallel with encouraging manufacturers to develop efficient engines and aircraft designs and explore/develop green energy sources.
4. Pandemic: NZ’s borders closure.	· Benefit from borders opening from August 2022.
5. Competition	· Rely on extensive business experience. · Attract top talents to provide excellent customer service and generate innovation. · New technologies: benefit from its capabilities to innovate and generate a competitive edge.

Gap analysis

The gap analysis determines that finance is a well-managed risk while the fuel crisis is a global concern without a short-term solution. In parallel, people and leadership are at the heart of business success because ANZ must welcome thousand of employees in a skills shortage scenario. In contrast, ANZ is a successful customer-centric organisation with excellent organisational culture and reputation, which contributes to attracting top talents. Therefore, exerting leadership while onboarding talents will pave the solid ground to operate at the forefront of the industry because transformational leaders contribute to scaling employees’ performance and generating innovation (Kucharska, 2021). In addition, encouraging people to self-manage, take risks and work creatively is key to generating innovation and streamlining operations.

Goals

After critically analysing the organisation and defining the gap, the landscape drives the organisation towards two goals:

1. Increasing revenue is vital to support ANZ’s operation. Approaching new technologies to generate innovation is a must-do because it defines businesses’ competitiveness and higher profits (Punel & Ermagun, 2018).

2. Organisational culture is vital to attract and retain top talents in the business by enhancing job satisfaction and employee performance (Tong et al., 2015) while supporting ANZ’s achieving pristine reputation by providing excellent services. Therefore, focusing on people and culture will guarantee sustainable profitability.

3. Strategy

SMART Objectives

1. Generating sustainable profitability by exploring digital innovation. Then, growing the business by 5,5% monthly for the next 36 months (or 200% in three years) from July 31, 2022.

2. Ensure that leaders will successfully incorporate 3200 new employees into the organisational culture by achieving top-notch customer satisfaction rates throughout the same period.

Currently, ANZ needs to combine these two objectives to thrive. Firstly, scaling profitability is imperative to support healthy business operations. Meanwhile, incorporating thousands of people can stimulate innovation while people fit a thriving organisational culture. So then, ANZ will focus on people to generate a competitive edge through innovation (Al-Khatib & Al-ghanem, 2021) and enhanced customer service resulting in sustainable growth. As a result, the business is likely to increase to three times the current business size, reaching performance rates of the pre-pandemic momentum.

Approach SMART objectives are vital to support business strategy implementation. Accordingly, their constraints ensure that the organisation has enough resources while providing a clearer perspective to stakeholders who agree with the strategic plan (Moore, 2017).

Strategic plan

Action Plan – Goals: Increase profitability & scale customer satisfaction by reinforcing the organisational culture

SMART Objective

Strategies & methods

Benefits

Resources

1 – Increase revenue by 200% in 3 years by generating digital innovation.

a) Explore new technologies to optimise operations and generate innovation using data analytics, AI, data mining, blockchain and cloud computing (Ebarefimia, 2017).

b) Improve the decision-making process to facilitate operations by applying business intelligence methods (Anderson-Lehman et al., 2008).

c) Generate innovation to add value to the business by approaching the design thinking method (Prud’homme van Reine, 2017).

New technologies (Wixom et al., 2008):

a) Maximum passengers load per flight

b) Optimum maintenance schedule

c) On-time flights

d) Luggage logistics

e) Effective customer support

f) New software & service development

g) Operations scalability and cost-efficiency

Business intelligence (Wixom et al., 2008):

a) Facilitate decision-making

b) Forecast trends

c) Generate data insights

d) Digital business strategy support

e) Optimise operations by improving the decision-making process

f) Enhance sales through digital channels

g) Superior ROI

h) Maximise loyalty programs and customer satisfaction outputs

Innovations (Al-Khatib & Al-ghanem, 2021):

a) Incremental innovation = better services

b) Radical innovation = new services

c) Competitive advantage

d) Maximise business value

· Project managers

· Business analysts

· Business intelligence analysts

· Data analysts

· Data scientists

· Digital Product Owners

· Software developers

2 – Scale customer satisfaction while leaders fit talents in the organisational culture.

Embed an organisational culture that embraces innovation (Kucharska, 2021):

a) Facilitate communication

b) Embrace uncertainty

c) People feel accepted

d) Failure as part of the learning process

e) Recognise and celebrate individual wins

d) Reward outstanding performance

e) Continuous learning

f) Career development

g) Self-management

h) Life-work balance

i) Diversity and inclusion

j) Transparent processes

Methods:

a) adoption of the transformation leadership style (Le, 2020).

b) training program for leaders and new talents (Guisado-González et al., 2016).

People – training benefit (Guisado-González et al., 2016):

a) Higher talent attraction & retention

b) Lower turnover

c) Higher creativity

d) Better decision-making & critical thinking

e) Effective problem-solving

f) Minor conflicts

g) People are team players

h) Advocate for the business

i) Optimise performance

Transformational leaders (Le, 2020):

a) Influence positive behaviour

b) Captivate and empower people

c) Encourage self-development and autonomy

d) Facilitate tasks

e) Recognise team success and individual achievements

f) Is an example of ethics and values

g) Stands for people

h) Provide focus and guidance

i) Share the business’s vision and strategy

· Top managers

· Team leaders

· Project managers

· Customer support agents

Action Plan – Goals: Increase profitability & scale customer satisfaction by reinforcing the organisational culture

SMART Objective

Timeframe & Milestones

Risks

KPIs * comparison with pre-pandemic rates

1 – Increase revenue by 200% in 3 years by generating digital innovation.

Average growth: 5,5% monthly

Milestones: 100% of business growth every 18 months.

1. New Covid-19 variants.

2. Fuel prices volatility

3. Government closing NZ’s borders

1. Higher on-time flights

2. Maximum flight loads

3. Minimum service disruption

4. Lower operational costs

5. Increasing revenue and profitability

6. Increasing incremental and radical innovations releases

2 – Scale customer satisfaction while leaders fit talents in the organisational culture.

Monthly pipeline:

– Services enhancements by incremental innovation

– Focus on digital platforms and internal processes.

Milestone: at least one radical innovation per year adds business value and creates competitiveness.

Monthly: 90 new employees.

Milestone: 3200 new employees in 36 months.

1. Talent shortage due to immigration restrictions and low unemployment rates prevent ANZ from providing quality service

2. Employees sick due to Covid-19

3. Lockdowns

4. New employees lacking adherence to the organisational culture training program

Customer

1. Lower customer complaints

2. Higher customer satisfaction rates

3. Higher loyalty program adherence

4. ANZ guarantees a top airline position in relevant publications

People

1. Frictionless integration across Business sectors

2. Teams have high motivation

3. Lower turnover

4. Higher collaboration

4. Conclusion

The strategic plan supports the SWOT analysis findings to explore the best capabilities of the business while mitigating its threats and weaknesses. Therefore, the pillar is people-first. By fitting people into a great organisational culture, the business will generate enough innovation to compete for a leading position in the airline industry. Additionally, while ANZ grows, transformational leaders will play a central role in guiding employees to perform at their best and, therefore, paving the solid ground to provide excellent customer service. Notwithstanding, sustaining a reputation of being a customer-centric organisation and an excellent place to work is essential to attracting top talents in the industry because great people make better decisions and lead the business to better outcomes.

From the perspective of organisational culture and innovation, organisations that facilitate communication and collaboration, alongside transparent processes and horizontal hierarchies, tend to innovate more (Le et al., 2020). For example, Netflix is well-known for its innovation capability and for choosing only top-notch talents in the industry to run the business with unequal work flexibility (Hastings & Meyer, 2020). Therefore, offering great organisational culture is critical to attracting top talents to generate innovation and establish a competitive edge in the industry, which results in higher profitability.

Additionally, the transformational leadership approach effectively motivates employees to perform at their best because it involves employees in a high degree of mutual trust that sets both in thorough engagement to fulfil intended goals (Le, 2020). For example, Netflix’s CEO Reed Hastings gives people a strong sense of purpose to promote change while captivating them. Moreover, by encouraging transparent communication, he shares his vision across the business to facilitate the implementation of the strategy (Ryan, 2013). ANZ will guarantee that people will generate innovation while embracing the current organisational culture by applying transformational leadership. Therefore, the business will continue as a customer-centric organisation with excellent customer service while welcoming thousands of new employees in the upcoming years.

Additionally, new technologies can enhance airline profitability with a customer-first mindset similar to Continental airlines. They transitioned from bankruptcy to profitability by embedding the new technologies and business intelligence into the organisation’s core (Anderson-Lehman et al., 2008). Therefore, it demonstrates that technology and business analysis can similarly benefit ANZ to streamline operations and generate gross profits and must be part of the strategy.

Finally, approaching organisational culture, transformational leadership, and innovation are consistent pillars to support ANZ’s success. This strategic plan supports current demands while providing solid guidance to overcome current threats and weaknesses towards business opportunities resulting in sustainable business growth. The advice is to implement the plan and follow KPIs closely while observing the business ranking top positions in relevant publications as a statement of excellent customer service.

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