Air NZ boss slashes pay by $250,000

Air New Zealand chief executive Greg Foran has offered to slash his base pay, as the airline moves to cope with falling demand as a result of the coronavirus.

The airline said yesterday it was suspending its full-year profit forecast because of uncertainty over how long bookings might be reduced because of Covid-19.

Foran, a New Zealander, was head of the United States operations of Walmart, leaving a US$13 million (NZ$20m) annual salary to take up his role last month. He has offered to slash his $1.65m base pay by 15 per cent and the airline’s executive team will extend a freeze on their salaries.

Other measures include offering operational staff the chance to take unpaid leave, and a hiring freeze on non-critical roles.

Foran said it was a significant event and different from challenges Air New Zealand had faced in the past, such as Sars or the global financial crisis.

‘‘This is affecting every part of the world ... this is different but it doesn’t mean we are not equipped to deal with it.’’

He said the airline had watched the impact spread, first through China, then Korea, then affecting flights to Australia and the United States. There was also an impact domestically.

He said Air New Zealand continued to make capacity changes but was not flying empty planes to

retain airport slots, as it has been reported other airlines around the world are doing. The airline was offering flight discounts where needed, to stimulate demand.

Foran said he continued to fly as normal, as did many other New Zealanders. ‘‘Planes have incredibly good air filtration systems.’’

Air New Zealand was ensuring it kept planes clean and in good condition: ‘‘There is no significant risk from flying Air New Zealand.’’

Falling passenger numbers meant redundancies could not be ruled out, one analyst said.

Andy Bowley, head of research at Forsyth Barr, said the airline had been relatively lucky in that it had gone into the downturn in a healthy financial condition. But it would do what it had to to survive. ‘‘I don’t think you could rule anything out . . . there’s so much uncertainty.’’

Air New Zealand’s and other airlines’ survival depended on the length of the outbreak, he said.