Redundancies loom for Air New Zealand as it cuts capacity by 85 percent

Redundancies loom for Air New Zealand as it cuts capacity by 85 percent
Photo credit: Getty Images/Newshub.

Air New Zealand has announced it will start "the process of redundancies" as it reduces capacity by 85 percent across its long-haul network as a result of the impact of COVID-19.

In a statement released on Monday morning, the airline said the drastic reduction would be put in place over the coming months, as it operates a minimal schedule to allow Kiwis to return home and to keep trade corridors with Asia and North America open. 

The airline's CEO Greg Foran said despite the extremely tough conditions currently hitting the travel industry, Air NZ is better placed than other companies to navigate its way through it.

However, he said the company will be further reviewing its cost base and "will need to start the process of redundancies for permanent positions acknowledging the important role partnering with unions has in this process".

Air NZ employs over 8000 people.

Flights from Auckland to the following destinations will be suspended:

  • Chicago
  • San Francisco
  • Houston
  • Buenos Aires
  • Vancouver
  • Tokyo 
  • Honolulu
  • Denpasar 
  • Taipei (from March 30 to June 30)
  • London - Los Angeles (from March 20)

Air NZ said its Tasman and Pacific Island routes will be significantly reduced between April and June. 

Capacity on the airline's domestic routes will be reduced by around 30 percent in April and May, but they will all remain operational.

Air NZ asked customers not to contact it unless their travel is within the next 48 hours or need immediate repatriation to Aotearoa or their home country. 

Foran described the airline as "nimble with a lean cost base and strong balance sheet", but conceded changes need to be made to deal with the current global situation.

"We are now accepting that for the coming months at least Air NZ will be a smaller airline requiring fewer resources, including people," Foran said.

"We have deployed a range of measures, such as leave without pay and asking those with excess leave to take it, but these only go so far. We are working on redeployment opportunities for some of our staff within the airline and also to support other organisations".

Air NZ's board of directors will take a 15 percent pay cut until the end of this calendar year.

Full details of schedule changes will be announced in the coming days.

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