Air New Zealand to axe 3500 jobs, could shrink 30 percent

March 31, 2020
New Zealand
Photo: Steve Creedy.

Air New Zealand will axe up to 3500 jobs, saying it expects to emerge from the COVID-19 virus almost a third smaller than it was before it began.

The airline employed about 12,500 people worldwide prior to the virus and was heavily dependent on tourism, which made up two-thirds of its revenues.

But it warned Tuesday in an email to staff and customers from chief executive Greg Foran that a pre-COVID annual revenue of $NZ5.8 billion is shaping up to be just $NZ500m if current booking patterns continue.

READ: Amazing pictures highlight the slump in air traffic from Flightradar24.

Foran said the only way the airline could see an improvement on this revenue estimate was if New Zealanders embraced domestic travel after country’s Level 4 alert is lifted.

He said the harsh reality was most countries, including New Zealand, would take a cautious approach to allowing international tourism in the next year.

This would lead to the loss of billions in ticket sales and see about 1.5 million fewer tourists arriving in New Zealand.

“In that light, it is clear the Air New Zealand which emerges from COVID-19 is a much smaller airline and could take years to get back to its former size,’’ he said.

“Therefore, we are planning to be domestic airline with limited international services to keep supply lines open for the foreseeable future.”

Foran said the airline was beginning “large scale reductions” in its international workforce this week with New Zealand following once the airline’s executive agrees on a final plan in the coming days.

“These are necessary measures to ensure our nation retains an airline, albeit a smaller one,’’ he said.

“To be clear, it is shaping up that the size of the Air New Zealand workforce will reduce by up to 3,500 roles in coming months.

“No areas will be immune whether it is our most senior leaders through to new joiners. The situation we find ourself in is nobody’s fault.”