Air NZ slims down management structure

By Phil Boeyen, ShareChat Business News Editor

Wednesday 10th October 2001

Air New Zealand (NZSE: AIRVA) is cutting the number of management units from 11 to 7 as it continues to streamline its operations.

The changes come in the wake of job and schedule cuts announced earlier this week and Tuesday's departure of chief executive, Gary Toomey.

"Change will start at the top," the airline says. "We need a new management structure that is simple and economical to operate."

The company says the proposed new structure will be developed on functional lines and will mean a smaller number of larger units.

The seven units are: Sales, Marketing & Distribution; Customer Services; Operations & Technical; Ventures; Finance; Strategy & Planning; and Human Resources, Organisation Change & Communications.

The company says the major units will report initially to the executive director, newly appointed board member and former accountant, Roger France, and later to the chief executive.

The final structure is due to be signed off separately by a specially formed board sub-committee and should be in place within 12 weeks.

The management reorganisation follows the announcement on Monday that the airline is cutting its schedule by 10.5% in response to the softer travel market. It is also looking to lower employee costs by the equivalent of 800 full-time positions.

"The immediate need is to bring the organisation back to the same or smaller size that it was prior to our integration with Ansett and into line with the reduced flight schedules that Air New Zealand will be operating as we go forward," says the carrier.

"The company must also be trimmed to cope with the impact of growing competition and the reduced international travel demand that has followed the terrorist attacks in the United States."

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