Flight plan of an entrepreneur

WILLIAM MACE
Last updated 05:00 10/12/2012
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When Michael Pervan returned to Air New Zealand after working at Boeing’s mammoth Seattle aircraft engineering hub in 2003 he was confident Kiwis could revolutionise aircraft interior design.

Pervan — with a 22-year career at New Zealand’s national carrier — and several of his recently repatriated engineering and design colleagues, only needed a few years abroad to realise they could do it better. They set about proving it to themselves and Air New Zealand’s top brass — and ended up with a multi-million dollar company poised to capture a niche in one of the most technically challenging industries in the world.

As leader of Air New Zealand’s Auckland design team and later manager of its design services department, Pervan completed a “challenging” upgrade of the airline’s Boeing 747-400 fleet in 2004, followed by a fit-out of the new Boeing 777-200ER fleet.

“We were basically doing things that other vendors told Air New Zealand couldn’t be done, or couldn’t be done in that time, or not quite like they wanted it. We’d proved it was possible even though it was our first time doing it,” says Pervan.

“There were a lot less of us but we felt we could compete and we could be just as capable, as a bunch of design engineers, as the ones we’d seen at Boeing and Airbus in places like Seattle, Toulouse and Bristol.”

Today Pervan heads Altitude Aerospace Interiors — a three-year-old, wholly owned subsidiary of Air New Zealand which turns over tens of millions selling its designs and expertise back to Boeing, among others. In fact Altitude does at least 75% of its business with companies other than Air New Zealand and is operationally separate from the airline that has fostered its remarkable growth. Altitude’s revenue has more than doubled and staff numbers have grown from 40 to 90. It’s effectively a startup, born from a majority state-owned corporation that employs 11,500 people globally but has notoriously low margins.

It’s a classic example of intrapreneurship, the term coined by American entrepreneurs Gifford and Elizabeth Pinchot in 1978 to reflect the phenomenon of individuals exploring entrepreneurial ideas within larger, established corporates. Corporate ground is often fertile for the right idea, but corporations can be rigidly structured around vested interests — and their bureaucracy can stifle the growth of ideas.

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the year before, but Altitude’s earnings are not reflected in that number because they are reinvested in the business. But it’s clear Altitude is a low capital risk investment in internal talent which could pay off on a global scale.

The Air New Zealand brand was vital for Altitude to get a push start in aircraft parts. It gave Pervan a testing ground for his design processes and its credibility offset perceived and real risks for external customers and aviation regulators.

“Being part of an aviation company, even though it was an operator and a maintainer as opposed to a designer and an engineering company, it helped,” says Pervan. “It says that these guys have got a good, stable parent, which is ultimately government majority owned, it’s a successful airline and a participant in the industry, even if it is on the other side of the equation.”

- Unlimited

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