Flight, staff cuts at Air NZ

By Phil Boeyen, ShareChat Business News Editor

Monday 8th October 2001

Air New Zealand (NZSE: AIRVA) is cutting back flight schedules by more than 10% in response to the drop in international travel demand caused by last month's US terrorist attacks.

The airline announced last week it was considering a schedule revamp and now says services will be cut by 10.5%, mainly on trans-Tasman routes and between Sydney and Los Angeles.

Acting chairman Jim Farmer says there will be little effect on New Zealand domestic services, and no provincial centre will lose its Air New Zealand service.

As expected the cutbacks will also have an effect on the company's staffing levels although Mr Farmer says it likely to be lower than the predictions of between 1,000 and 1,500 job losses being made over the weekend.

"Initially, we plan to achieve workforce reductions by attrition and a recruitment freeze to stop the hiring of replacements when people leave. We are also encouraging staff to take accumulated leave and reduce over-time.

"However, there will be redundancies in some areas, and these will be managed through processes which have been agreed with our unions in current collective employment contracts, or contained in individual contracts."

Mr Farmer says the reductions are not as significant as some of the layoffs that have been announced recently by international airlines because the airline is heading into a period when air travel demand from its home market increases.

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