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Air New Zealand to cut 200 jobs as demand slows

Wednesday 19th November 2008

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Air New Zealand will eliminate 200 positions, with half of them made up of long-haul cabin crew, as the national carrier reduces capacity as demand slows. The stock fell 1.1%.

The cuts include 68 technical, planning and management jobs as the airline reorganises its operations. The reductions will generate annualised savings of about $20 million, chief executive Rob Fyfe said in a statement.

Air New Zealand had tried to minimize job cuts by offering some staff the option of working fewer hours and putting pilots on leave without pay, and freezing executive salaries, Fyfe said.

"However, it has become clear that these measures will not fully address the excess staff levels we now have as a result of these capacity reductions," he said.

The airline is reducing capacity on long-haul flights by 8% this year, as increased rivalry of key routes and the impact of the global economic slump reduce growth in ticket sales.

It is expected that the majority of the redundancies will be achieved on a voluntary basis, Fyfe said.

Shares of Air New Zealand fell 1 cent to 90 cents today, extending their slide this year to more than 50%.

By Jonathan Underhill

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