Air New Zealand to sack 200 full-time employees, change schedules, cut capacity

Air New Zealand, the national flag carrier of New Zealand and the country’s biggest airline, plans to dismiss 200 full-time employees, change schedules and reduce capacity in order to cut costs as demand for international flights has slowed down.

In a statement, Rob Fyfe, chief executive officer of Air New Zealand, said: “The job cuts and a broader review of costs should deliver annual savings of more than NZ $20 million (US $11 million). Half of the jobs will be from long-haul cabin crew and another 68 from technical operations.”

Air New Zealand Limited, based in Auckland, New Zealand, has its focus on Australasia and the South Pacific and operates services to Europe, North America and Asia. It is a member of the Star Alliance. Air New Zealand, in which the majority stake is owned by the government of New Zealand, has its main hub at Auckland Airport.

“We have been working hard on a series of initiatives to minimise the need for redundancies,” Rob Fyfe explained in the statement. “It has become clear that these measures will not fully address the excess staff levels we now have as a result of capacity reductions. Air New Zealand’s long-haul capacity is 8% lower than a year ago. In response, the airline has introduced part- time hours, has not renewed temporary contracts and has frozen executive salaries.”

“The series of initiatives to minimise the need for redundancies,” according to Fyfe, “include pilots taking leave without pay, giving staff on individual contracts the opportunity to work fewer hours, introducing part-time hours for cabin crew, not replacing non-safety-sensitive roles, not renewing temporary contracts and a freeze on executive salaries. However, it has become clear that these measures will not fully address the excess staff levels we now have as a result of these capacity reductions.”

Air New Zealand will carry out most of the job cuts, which will take effect early in 2009, through voluntary resignation of workers.

The Air New Zealand statement said “consultation is about to start on losing 100 jobs from long-haul cabin crew, 6 from recruitment, and 7 in the airline operations area.”

In all, 68 jobs in the technical, planning and management areas will be eliminated from the airline.

“The company,” Rob Fyfe added, “will keep reviewing its costs because there is a chance of further capacity reductions in the coming months. I am not saying that this will be the end because I don’t know when the end of this recession cycle will be.”

The airline said its fuel bill would be NZ $200 million higher than that in 2007, based on the present oil prices.

Air New Zealand reported a net income of NZ $218 million in 2008, up to June 30. Profits may fall to NZ $57 million in 2008, according to aviation analysts.

At present, Air New Zealand is in the process of reorganising its subsidiary businesses, including Safe Air in Blenheim, an aviation maintenance, repair and overhaul business unit located at Blenheim Airport, Marlborough, New Zealand.