Air New Zealand halted trading of its shares Monday while it announced an unprecedented 85 percent reduction in long-haul flying over the coming months due to COVID-19 restrictions.
The airline is also looking at redundancies as it responds to the increase in travel restrictions, including those imposed by the New Zealand and Australian governments requiring nearly everyone entering the countries to self-isolate.
READ: Australia joins Air New Zealand with 14-day isloation for all overseas arrivals.
Passengers should expect more cuts from Qantas and Virgin Australia, both of which are also significantly affected by the restrictions.
The New Zealand carrier said it would operate a minimal schedule to allow Kiwis to return home and keep trade corridors to Asia and North America open.
Destinations to be suspended from March 30 to June 30 are Chicago, San Francisco, Houston, Buenos Aires, Vancouver, Tokyo Narita, Honolulu, Denpasar and Taipei.
It is also suspending its London–Los Angeles service from March 20 (ex LAX) and March 21 (ex LHR) through to 30 June.
The drastic reduction in long-haul capacity will be accompanied by a 30 percent fall in domestic capacity in April and May, although the carrier said no routes would be suspended.
Details of a significant reduction in Tasman and Pacific Island flying are due to be announced later this week.
Restrictions being imposed by governments to attempt to slow the spread of COVID-19 are devastating the airline industry with airlines scrambling to slash capacity as demand plummets.
Leisure and business travel across the Tasman has been rendered essentially impractical by the restrictions imposed by the two governments.
Air New Zealand urged consumers responding to the unprecedented schedule changes not to contact the airline unless they were due to fly within the next 48 hours or needed immediate repatriation to New Zealand or their home country.
Chief Executive Officer Greg Foran said that airlines faced an unprecedented challenge but Air New Zealand is better placed than most to navigate its way through it.
“The resilience of our people is exceptional and I am consistently amazed by their dedication and passion for our customers,” he said.
“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,’’ he said.
“We also have supportive partners. We are also in discussions with the Government at this time.”
Foran said the downturn in travel meant AirNZ continued to review its cost base and would need to work with unions on the process of redundancies for permanent positions.
“We are now accepting that for the coming months at least Air New Zealand will be a smaller airline requiring fewer resources, including people,’’ he said.
“ We have deployed a range of measures, such as leave without pay and asking those with excess leave to take it, but these only go so far.
“We are working on redeployment opportunities for some of our staff within the airline and also to support other organizations”.
Foran said the airline was working constructively with the heads of the four main unions representing more than 8,000 of its workforce to ensure the right outcome for all staff.
He said the unions were engaging with the airline and positively representing the interests of its members.
“These are unprecedented times that we are all having to navigate,’’ he said.
“ And it is clear that if we don’t take all the appropriate measures to lower costs and to drive revenue, our airline won’t be in the best position to accelerate forward once we are through the worst of the impact of Covid-19.”
The airline’s board of directors will take a 15 percent pay cut until the end of this calendar year.
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