CORONAVIRUS: Air New Zealand makes large cuts to capacity, plans to shed workers

International network trimmed by 85% while domestic network will fall by 30%

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Air New Zealand stopped trading of its shares and announced Monday (16 March) that the airline would reduce its international capacity by 85 percent and will start laying off employees as the airline and other carriers around the world try to deal with the fallout of the COVID-19 coronavirus that has killed more than 6,000 people

The carrier said it will cut its long-haul network by 85 percent and will operate a “minimal schedule” to allow citizens to return home and to keep trade corridors with Asia and North America open. The airline said it was suspending flights between Auckland and Chicago, San Francisco, Houston, Buenos Aires, Vancouver, Tokyo Narita, Honolulu, Denpasar and Taipei from 30 March to 30 June. It is also suspending its London-Los Angeles service from 20 March (ex LAX) and 21 March (ex LHR) through to 30 June. The Tasman and Pacific Island network capacity will be “significantly” reduced between April and June.

The carrier also said its domestic capacity will be cut by 30 percent in April and May but no routes will be suspended.

Air New Zealand CEO Greg Foran. (PHOTO: Air New Zealand)

Chief Executive Officer Greg Foran says that while airlines face an unprecedented challenge, 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,” Foran said in a statement announcing the cuts. “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.”

As part of its plans to cut costs the airline also announced it would be shedding employees as well. “We are now accepting that for the coming months at least Air New Zealand will be a smaller airline requiring fewer resources, including people. 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 organisations”, Foran said, adding the company’s board will take a 15 percent pay cut until the end of this calendar year.

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