Air NZ extends capacity cuts in response to dwindling demand

Friday 29th May 2009

Air New Zealand, the national carrier, will cut capacity by 3% next year, eliminate some 80 jobs cabin and airport handling jobs, and lobby the government to increase marketing on tourism as demand dwindles.

The cut-backs are “in response to reducing demand as consumers tighten their belts in the face of the global economic recession,” the airline said in a statement. It has begun talks with unions on how to minimise job losses, it said.

A review of crewing numbers has identified a potential surplus of up to 40 cabin crew and pilots on regional airline routes and domestic jet operation, it said. A further 40 airport handling jobs could go in Christchurch and Auckland as a result of Qantas Airways terminating its domestic services.

Air New Zealand is also studying ways to pare costs on routes across the Tasman, including greater workplace flexibility on its A320 fleet to better match the peaks and troughs of passenger demand.

Staff numbers are being trimmed at the carrier’s corporate centre, with the introduction of initiatives such as four-day weeks, leave without pay, pay freezes and a hiring freeze.

The airline if currently matching the government dollar for dollar on a marketing drive into Australia, which may have helped lift visitors from the biggest source of tourists. It plans to “strongly” lobby the government in coming weeks to increase its funding for tourism promotion.

“New Zealand is at risk of seeing its share of international tourism diminish as competing destinations significantly increase their marketing spend and pour further support behind their tourism industries,” it said.

The shares were unchanged today at $1.06 and have gained 29% in the past three months.

Businesswire.co.nz

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