Balancing act: Phil Neutze FCPA on managing priorities

My role: strategic initiatives and operations

As CFO, I lead four teams – strategy, planning and performance, finance, and regulatory and procurement. We are responsible for corporate strategy, business planning, M&A, debt and equity financing, investor relations, aero pricing, budgeting, board reporting, statutory reporting, regulatory disclosures, tax, procurement and capital expenditure governance.

I am also a director of our Novotel and Pullman Hotel joint ventures with Tainui Group Holdings.

My role involves a lot of “airtime” with our board and leadership team, lately focused on the budget and timing for restarting COVID-19-affected operations, paused strategic initiatives, a multi-billion-dollar infrastructure development plan and the aeronautical pricing implications for our airlines.

Plus, there is also engagement with our equity investors and bankers who are eager to understand the same things.

Game changers: learning moment

My first job was as a scientist for the New Zealand Ministry of Agriculture and Fisheries. My statistician actively traded shares. I’d ask him, “How do you know what to buy?”, “What’s a PE ratio?” He tired of explaining and told me to go and do an MBA.

I researched it that night, resigned the next day and signed up for an MBA at Massey University.

After a stint with ANZ’s graduate program, a friend suggested investment banking. It sounded great, but I didn’t think my agricultural science degree and MBA would cut the mustard. He said Treasury analysts make good investment bankers. A tax policy analyst role came up at the Treasury.

After a good interview, they asked me to stay and complete an essay on microeconomics.

That sounded ominous, so I said I was too busy at work and asked if I could do it after hours. They said fine, so I bought a little Penguin economics dictionary on the way home, found phrases like “Keynesian economics” and “microeconomic distortions” and wrote what turned out to be a great essay. I was hired!

Soon afterwards my boss was talking about “deadweight losses”, and I asked him what it meant. He was dumbfounded and said, “What about your master’s in economics?” I replied that I studied economics for an agricultural science degree and an MBA.

“But what about your essay?” I explained that I figured it out from the pocket dictionary. After a stunned silence, he said, “Well, thankfully you are a quick learner!”

Eventually an investment banking role came up in Wellington. After 10 years in investment banking, and some time with Auckland Council heading up financial strategy and rating policy, I moved into a strategy, planning and performance role at Auckland Airport.

My challenges: maintaining balance

Clearly the NZ$1.2 billion (A$1.1 billion) equity raising and banking restructure that we implemented in April 2020, less than two months after New Zealand’s borders were closed due to COVID-19, was a very intense and challenging time, but highly successful. Lately I’ve had a difficult balancing act.

On the one hand it has involved keeping my team and the wider organisation engaged and optimistic for the future, but I’ve also had to tap the brakes with our board and leadership team to avoid restarting suspended operations and the multi-billion-dollar infrastructure plan too early. That could jeopardise liquidity, banking covenants, credit rating and our long-term recovery.

Surrounded by smart, ambitious and energetic directors and colleagues champing at the bit to get going, this can be quite uncomfortable.

Another challenge has been the pervasive but misplaced belief of some airlines that Auckland Airport is hell bent on exploiting our monopoly. Nothing could be further from the truth.

We anguish over decisions that impact our airlines, especially multi-billion-dollar capital investment decisions. However, we have dozens of airline customers, each with different needs and customer service propositions, so we can’t please everybody. We have to be bold and take a position that we believe is in the best interests of our wider travelling public.

Lessons learned and best advice

Don’t angst over university degree choices or your first job. As long as you work hard and do your best, you’ll have an interesting and fulfilling career path.

Don’t ever take on a new job or role that misaligns with your personal values.

Hire great people. The greatest contribution you can make to any business is to recruit and motivate great people and then delegate accountability and responsibility, so they can deliver what they were hired to do.

Hold your ground if competing business objectives threaten your company’s prospects. You can’t please everybody. As a finance practitioner, you must strive for what is best for your company and shareholder value over the long term.