The former CEO of Walmart U.S. left the $300 billion retailer to lead Air New Zealand. Just days in, business screeched to a halt: ‘We went from doing $100 million a week to nothing’

After eight years in the U.S. and China, Foran was ready to return to his home country of New Zealand and was drawn to the opportunity to be a CEO with no one above him (Walmart U.S.’s CEO reports to the CEO of Walmart Inc.). While Foran acknowledges a large difference between running a gigantic retailer and a national air carrier, he says there are common threads.

He was only a few days into his job as the airline’s CEO in February 2020 when the pandemic hit, forcing him to tap many of the skills he developed at Walmart U.S. CEO and map out the airline’s revitalization plan. “It’s similar to the playbook I had at Walmart U.S., which was similar to the one I had in China, which was similar to the one at Woolworths,” Foran tells Fortune, referring to the giant retailer down under. “You’ve got to decide what kind of culture you want the business to operate in,” he says. More importantly, “You’ve got to be great at the basics.”

With air travel stalled, Foran set about devising a plan to reinvent the airline, focusing on dominating select routes, building more market share in its home country, and improving customer service.

But even with air travel back in full swing, the leadership tests keep coming: Air New Zealand recently started its long-desired direct New York-Auckland route, a service at the center of Foran’s ambitions for the company. But a few days after his interview with Fortune, the airline already had to reduce the number of passengers and bags it allows on those flights to carry more fuel. 

This interview has been edited and condensed for clarity.

Fortune: Air New Zealand recently had its inaugural nearly 18-hour New York-Auckland direct flight. Why is this so crucial to your plans for the airline?

Foran: North America’s a great market for us. We’ve been coming to the U.S. for 50 years. It started in L.A., then Houston began a few years ago, and Chicago not long before COVID started. As we looked at the plane fleet, it made sense to fly to New York since we can now make it directly from Auckland to the East Coast. One of the things people sometimes don’t realize is New Zealand’s about two and a half hours closer to America than Australia is, and that’s a competitive advantage.

You seem to be banking on New Zealand’s growing attraction as a business center and not just tourism.

New Zealand could offer itself as a wonderful alternative environment for startups. I hope that happens, though tourism will probably be the lead edge.

When you took over in February 2020, some of your Asian destinations were already closing. Within five weeks, America and Europe locked down, too, forcing Air New Zealand to shut down entirely for weeks. Walk us through that experience as a rookie at the company.

On the first day I started, a Monday, we stopped flying to Shanghai. The following Monday, we stopped flying to Korea; the following Monday, we stopped flying to Tokyo. On the following Monday, we stopped flying to Hong Kong. Then six weeks later, about the 24th of March, business stopped entirely, so we went from doing $100 million a week to nothing. There was a rule book from what happened on 9/11, from when we hit SARS (2003), from when we hit bird flu (2007). But then you get to the 24th of March and have to put the book away. We needed to rewrite the rules.

You still didn’t know how the airline industry nor the company worked. Whose outside counsel did you seek?

Within the industry, there are some excellent, experienced, wise people. So I called friends. And when you’re trying to learn it quickly, there’s a lot of value in chatting with Willie Walsh, who ran British Airways (Walsh is currently head of the industry group International Air Transport Association), and Aer Lingus. There’s another chap in Australia called Rod Eddington (an alumnus of British Airways and Cathay Pacific.) So I rang Rod, and I said, ‘Help me. What do I do?’ 

So how did you go about your job during that time, and what were your priorities?

I took the playbook I had at Walmart, which was very similar to the one I had in China, which was similar to Woolworths. You’ve first got to decide what sort of culture you want the business to operate in, and you’ve got to be able to demonstrate that through your actions and behaviors. Once you’ve got that reasonably clear in your head, you then need to plan. The plan for us was simple: grow our domestic business and get about 85% market share (from about 80% now.) It’s a good business, and it’s profitable. And then we also work to optimize our international business. That means don’t try and fly everywhere; pick where you want to fly, and optimize that. You’ve got to be brilliant at the basics: the planes should leave on time and arrive on time. 

New Zealand is a country of 5 million people, a small market. How does a relatively small national airline like yours create a need for itself?

You carve out a niche and drive market share in that particular niche. Don’t think about Air New Zealand as an airline that does $6 billion a year and goes up against United, Delta, British Airways, and all the others that do 10 times our turnover. The relevant question is, ‘What is your market share in New Zealand? What’s your market share on the Auckland-New York route?’

What made you take the job? 

I don’t live life in isolation. I have a wife and children, and she has a say in what I’m going to do and where I will go. A bit of my thinking was also that it might be time to hand that job on to the next person to let them have a shot. I don’t believe that you have these jobs for life or that you should. And I was quite keen to see what would happen if I tried something different. You know, I’ve been 14 years in retail. So, how transferable are those skills? 

So how transferable are they?

While it’s helpful to have all the technical knowledge about whether that plane’s a 787 or a 747, or whether those are GE engines or another kind, you can learn them quite rapidly. Learning culture is not something you do in five minutes but is an entirely transferable skill. Knowing how to build a strategy is also transferrable. It’s helpful to have some technical background, but you don’t have to have all of that in your toolbox.

What else did you take from your turnaround of Walmart to Air New Zealand?

One thing that happens in airlines, which is a bit similar to what happens in retail, is that you create silos when you create teams. For instance, people in merchandising might concentrate nearly all their attention on that and become very good. But they’re not all that interested in ensuring the distribution centers run smoothly, and vice versa.

How does it translate for airlines?

Airlines are a bit the same. They’ll be keen on the revenue side of the business to sell as many tickets as possible, but how much consideration do they give to the fleet team responsible for maintaining the airplanes? Because if I’m now flying more, I’ve got more maintenance. What if I don’t have all those planes available because I’ve got four of them in the hangar that I have to do engine checks for? So we’re rewiring Air New Zealand. Now we have what we call tribes, which are cross-functional and responsible for integrated planning.

Get to know Foran:

• Foran, the son of two school teachers, started his career stacking shelves in a New Zealand supermarket.
• One of his four children has been a professional rugby league player in Australia for 13 years.
• He arrived at Walmart in 2011 at age 48 after being passed over the CEO role at the Australian-New Zealand supermarket chain Woolworths.