Air New Zealand could pare back its workforce of 12,500 by 30 percent to cope with reduced flying caused by COVID-19 and government travel restrictions.
It also warned it could take the airline 12 months to recover completely from the coronavirus outbreak.
The sobering estimates were contained in a message to staff from chief executive Greg Foran in the wake of the airline’s unprecedented capacity announcement early Monday.
Air New Zealand announced a drastic 85 percent reduction in long-haul flying and said it would reduce domestic capacity by 30 percent in April and May, with a significant reduction in trans-Tasman flying due to announced later this week.
READ: Unprecedented Air New Zealand cuts see most long-haul routes suspended.
The big cuts were triggered by the surprise decision by the New Zealand government to require everyone (other than Pacific Islanders) entering New Zealand to self-isolate for 14 days.
The Australian government later followed with a similar requirement applying to all people entering that country. Both countries have also banned cruise ships.
“To minimize the level of redundancies we are strongly encouraging staff to take annual leave, long service leave or leave without pay where practicable,’’ Foran said.
“The executive is currently working through what this means by functional work area.
“In some parts of the business, the level of exits may be more than 30 percent or could well be less given we still need a core team in some areas to keep the airline running in its current reduced schedule and for when we scale back up.
“Demand for travel will take a prolonged period to normalize and the Air New Zealand we look at in 12 months is unlikely to be flying the same capacity and number of customers we were before COVID-19.“
Foran said that in recognition of the financial challenges, the airline’s executive was taking a 15 percent salary cut immediately until the end of this year.
He said he expected an update on the final levels of redundancies by the end of the week.
Airlines around the world are looking at layoffs as a result of the travel restrictions and slumping demand and Scandinavia’s SAS has temporarily laid off 90 percent of its staff.
READ: United to halve capacity as some carriers halt international flying.
US carriers have also warned of significant cuts.
