Air New Zealand CEO Greg Foran takes pay cut as coronavirus costs prove 'more significant' than expected

The airline has reduced capacity across its entire network.
The airline has reduced capacity across its entire network. Photo credit: Air New Zealand

Air New Zealand's chief executive officer Greg Foran has voluntarily offered to reduce his base pay of $1.65 million by approximately $250,000 as the airline steers through the coronavirus crisis.

The airline has implemented a hiring freeze for all roles that are non-critical and will offer operational staff the option to take unpaid leave.

On Monday morning, Air NZ announced it will be withdrawing its full year 2020 earnings guidance which the airline issued to the market on February 24 and reconfirmed at its interim results announcement on February 27, 2020.

The airline says it's taking numerous steps to mitigate the impact of COVID-19, which has seen a large drop in demand for air travel.

Air NZ's actions:

  • Asia capacity reduction of 26 percent through June, including an extension of Shanghai route suspension through April
  • Tasman capacity reductions of 7 percent through June
  • Pacific Islands capacity reductions of 6 percent through June
  • Reductions across the Domestic network of approximately 4 percent, with a 10 - 15 percent reduction in March and April
  • Various labour initiatives including a voluntary reduction in CEO pay, a hiring freeze for all non-critical roles and voluntary unpaid leave for operational staff
  • Deferral of non-urgent capital spend and any non-critical business activity

In a statement, the airline said it now believes the financial impact of the virus outbreak is likely to be "more significant than previously estimated".

Foran says that it is increasingly clear that COVID-19 has created an unprecedented situation and it is difficult to predict future demand patterns.