Air New Zealand: considering hundreds of job losses early next year?

Written by Your VIPTRIP Team on December 13th, 2011

Air New Zealand is understood to be considering hundreds of job losses early next year.

The airline is looking to slash tens of millions of dollars in costs in a difficult year ahead which could see the koru pulling out of London.

Chief executive Rob Fyfe has told staff a “company-wide corporate overhead review” was under way.

A source said the scale of the suggested savings indicated that large projects would be shelved, and the associated jobs with them, as the airline adapted to slowing global demand for air travel. Air New Zealand has been losing $1 million a week on its long-haul network, including its flagship London route, and is conducting a top-down review to improve revenue by $110m by 2015. However, its domestic and trans-Tasman routes were making money and allowed the company to make an $81m profit after tax this year. It is understood that job losses, mostly at head office as well as in the United States and Britain, could number in the low hundreds.  An airline spokesman would not comment on the implications of the corporate review, saying no decisions had been made.  Air New Zealand has about 2000 corporate and head office staff, excluding pilots, air crew and engineers.  Mr Fyfe said in a letter to staff on Friday, obtained by The Dominion Post, that Air New Zealand shareholders, including the Government as 74 per cent owner, had lost half a billion dollars of the value of their investment in the last year. “We need to reduce our costs to reflect the lower level of demand for air travel that we are likely to see in the coming 12 months and the increasing price competition as our competitors struggle to fill their aircraft.” Air New Zealand would need to adapt its business more quickly than its competitors and continue to innovate and find new sources of revenue, Mr Fyfe said.  “It requires that we are prepared to make some tough choices.”  A range of cost-cutting proposals and income initiatives were being considered, he said.  Everything was potentially on the table. “There are no sacred cows.”  Changes would also be made to sales and marketing teams in Britain and the United States to generate more revenue from those “challenging markets”.  Asked by analysts at a recent investors briefing if there was an “emotional connection to London”, Mr Fyfe said there was not and the route had to be made financially viable.  A spokesman said yesterday that pulling out of London was not being considered. Travel agents said Air New Zealand could, however, stop flying the koru beyond the US or Asia and instead extend its relationship with Sir Richard Branson-owned Virgin Atlantic on the London leg. In return, Air New Zealand would carry Virgin Atlantic’s passengers across the Pacific. Atlantic Pacific travel agency chief executive Andrew Dale said such a deal would let Air New Zealand keep its “NZ” flight code on London tickets and keep marketing New Zealand in Britain. For Air New Zealand and Tourism New Zealand, Britain was a large inbound market which they would “to some extent protect at all costs”, Mr Dale said.  “You will always be able to fly on a NZ flight code all the way to London,” he said. Air New Zealand already has some shared flights with Virgin Atlantic between the United States and London. It also uses Virgin Atlantic’s business class seats under licence. Virgin Atlantic could get access to Air New Zealand’s world first economy skycouch bed-seat and its new premium economy seats.

byF airfax NZ News

X Cheap Business Class Flights to LondonX cheap business class flights to FrankfurtX cheap business class flights to ParisX cheap business class flights to MunichX Cheap Business Class Flights to ShanghaiX Cheap Business Class Flights to DubaiX cheap business class flights to SeattleX Cheap Business Class Flights to New YorkX Cheap Business Class Flights to SAn FranciscoX Cheap Business Class Flights to HonoluluX Cheap Business Class Flights to MiamiX Cheap Business Class Flights to TortolaX Cheap Business Class Flights to St. MaartenX Cheap Business Class Flights to PapeeteX Cheap Business Class Flights to TahitiX Cheap Business Class Flights to FijiX Cheap Business Class Flights to DEnverX Cheap Business Class Flights to ChicagoX Cheap Business Class Flights to WAshingtonX Cheap Business Class Flights to HawaiiX Cheap Business Class Flights to ManchesterX Cheap Business Class Flights to BirminghamX Cheap Business Class Flights to DublinX Cheap Business Class Flights to ZurichX Cheap Business Class Flights to Edinburgh
Website Pin Facebook Twitter Myspace Friendfeed Technorati del.icio.us Digg Google StumbleUpon Premium Responsive

 

Comments are closed.