128,000 job losses for aviation

New Zealand will lose nearly 130,000 jobs linked to the aviation industry after just three months of coronavirus travel restrictions, an international aviation association says.

The International Air Transport Association (Iata), which represents nearly 300 airlines, said in the Asia-Pacific region 11.2 million jobs linked to the aviation industry and tourism sectors were at risk and it was forecasting 128,300 fewer aviation-related jobs in New Zealand. That is based on a scenario where severe restrictions on travel are lifted after three months, followed by a delayed recovery due to economic recession.

New Zealand’s tourism industry directly and indirectly employs almost 400,000 people about 14 per cent of the workforce.

International air travel has come to a near standstill due to a fall in passenger demand and border restrictions imposed by countries in an attempt to contain the spread of Covid-19, which has killed 100,000 people worldwide.

Since March 26 New Zealand’s borders have been closed to all travellers except New Zealand citizens, permanent residents, residents with valid travel conditions and their immediate family. In response airlines scrambled to reduce flights in order to preserve cashflow.

Then, as New Zealand moved to alert level four, all non essential domestic travel was banned.

The restrictions resulted in Air New Zealand reducing its total network capacity by 95 per cent and setting in motion a plan to reduce its headcount by 3750 staff. The company’s annual revenue was expected to fall from about $5.8 billion to less than $500 million – a 90 per cent reduction – as a result of Covid-19.

Data from air navigation services provider Airways showed in the first week of April New Zealand air traffic dropped 85 per cent compared to the same week in 2019 – from 6600 flights to just 982.

Iata Asia-Pacific regional vice president Conrad Clifford said based on a scenario in which severe travel restrictions lasted for three months, passenger demand for the Asia-Pacific region as a whole would reduce by 37 per cent in 2020, with a revenue loss of US$88b (NZ$145b).

Worldwide 25 million jobs linked to the aviation industry were at risk, it said.

Iata said passenger demand for aviation in New Zealand would drop 38 per cent on 2019, resulting in nearly 10 million fewer passengers in 2020.

It was forecasting New Zealand passenger revenue to fall by US$2.7b in 2020 compared to 2019.

The overall impact of declining passenger numbers on New Zealand’s GDP would be US$8.1b, it said. The impact of Covid-19 has already resulted in hundreds of job losses in New Zealand’s aviation and travel sectors.

Air New Zealand is planning on making up to 1460 cabin crew and 387 pilots redundant.

Virgin Australia on April 5 shut up shop in New Zealand leaving roughly 600 New Zealandbased staff out of work.

The New Zealand Airline Pilots Association has concerns for about 127 Qantas pilots and 81 Jetstar pilots losing their jobs.