Air NZ expects 3750 jobs to go

Air New Zealand is further reducing capacity across its network as coronavirus reduces demand for travel, and thousands of job losses are expected.

The airline placed itself into a trading halt yesterday to allow it time to more fully assess the operational and financial impacts of global travel restrictions. On its long-haul network, Air New Zealand will be reducing its capacity by 85 per cent and will operate a minimal schedule to allow Kiwis to return home and to keep trade corridors with Asia and North America open.

Full details of this schedule will be advised in the coming days.

Chief executive Greg Foran said, based on what the airline could see yesterday, its 12,500 workforce would drop by 30 per cent. To minimise redundancies, it was encouraging staff to take annual leave, long service leave or leave without pay where it could.

New Zealand Airline Pilots’ Association

president Captain Andrew Ridling said he understood it would not be a short-term measure.

‘‘The industry is aware that, until this unprecedented situation developed, Air New Zealand would have had forecasted annual revenue of approximately $6 billion I would no longer be surprised if that forecast is reduced to around $1b,’’ he said.

The Tasman and Pacific Island network capacity will significantly reduce between April and June. On the domestic network, capacity will be reduced by about 30 per cent in April and May but no routes will be suspended.

Benje Patterson, an independent economist with a focus on aviation, said he expected the Government would need to provide support for Air New Zealand in some way.

One of the biggest liabilities for the airlines would be the tickets it had sold that people would claim on in future.

The Government would probably put more money in through a share issuance to shareholders, he said.

Forsyth Barr head of research Andy Bowley said there were likely to be material losses for the airline both this financial year and next.

Foran said while airlines face an unprecedented challenge, Air New Zealand was better placed than most to navigate its way through it.

‘‘We are a nimble airline with a lean cost base, strong balance sheet, good cash reserves, an outstanding brand and a team going above and beyond every day. We also have supportive partners. We are also in discussions with the Government at this time.

‘‘We are now accepting that, for the coming months at least, Air New Zealand will be a smaller airline requiring fewer resources, including people.’’

A meeting will be held with the four main unions representing Air New Zealand staff. E tu¯ union aviation spokesman Savage said that would provide details on which areas and roles would be most affected.