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Air New Zealand to cut staff and 85% long-haul capacity

written by Adam Thorn | March 16, 2020

Air New Zealand announced a trading halt on Monday morning and said it would begin the process of making staff redundant.

Days after Prime Minister Jacinda Ardern announced stringent new travel restrictions, the country’s flag carrier also said it would cut long-haul capacity by 85 per cent. The airline will operate only a minimal service “to allow Kiwis to return home”.

Air New Zealand is deferring deliveries of Airbus A321neo aircraft. (Air New Zealand)
Air New Zealand is deferring deliveries of Airbus A321neo aircraft. (Air New Zealand)

Chief executive Greg Foran said in a statement, “We are now accepting that for the coming months at least Air New Zealand will be a smaller airline requiring fewer resources, including people. 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.”

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From 30 March to 30 June, services cut include flights between Auckland and:

  • Chicago;
  • San Francisco;
  • Houston;
  • Buenos Aires;
  • Vancouver;
  • Tokyo Narita;
  • Honolulu;
  • Denpasar; and
  • Taipei.

It is also suspending its London-Los Angeles service from 20 March (ex LAX) and 21 March (ex LHR) through to 30 June.

The Tasman and Pacific island network capacity will also reduce between April and June, while domestic network capacity will be cut by 30 per cent. No routes will be suspended.

The airline said it was switching its focus on allowing Kiwis to return to New Zealand and to keep trade corridors with Asia and North America open. Its board of directors will take a 15 per cent pay cut, and the business has announced it will consult with unions on job losses.

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Foran said, “We are a nimble airline with a lean cost base, strong balance sheet, good cash reserves, an outstanding brand and a team going above and beyond every day. We also have supportive partners. We are also in discussions with the government at this time.

“We are working on redeployment opportunities for some of our staff within the airline and also to support other organisations.

“I would like to thank the leadership teams at E tū, AMEA, NZALPA and Federation of Air New Zealand Pilots for the way in which they are engaging with the airline and positively representing the interests of their members.

“These are unprecedented times that we are all having to navigate. And it is clear that if we don’t take all the appropriate measures to lower costs and to drive revenue, our airline won’t be in the best position to accelerate forward once we are through the worst of the impact of COVID-19.”

On Friday, Prime Minister Ardern announced restrictions requiring travellers to be quarantined for 14 days upon entry into the country.

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