Air New Zealand jobs on the line in cost-cutting drive

Air New Zealand in April downgraded its full-year profit outlook. Photo / Brett Phibbs

Air New Zealand is consulting a number of staff as it looks to cut jobs.

The airline’s chief people officer Nikki Dines said the airline was currently in consultation with staff in “some parts of its business” about potential role reductions.

“This is not an action we have taken lightly and acknowledge times like this will be unsettling for our team. Our focus is on supporting our people through this.”

The changes proposed don’t impact every area of the business, she said.

An anonymous tipster has put the number of roles under review at 100. While the airline is not commenting on overall figures, it is understood the number of jobs under threat is substantially less than that - at this stage.

The airline is also not specifying where the jobs are, but it is understood those most at risk are at its Fanshawe St headquarters in central Auckland. The airline has over the past year rapidly expanded the number of contract call centre staff.

Unionised staff are not thought to be in the firing line.

Last year’s annual report showed that of 12,000 staff in total, there were 1364 management roles. Just over 200 managers were paid between $200,000 and $500,000 and 21 paid more than $500,000.

The highest profile departure in the latest wave of cost-cutting was chief corporate affairs officer Mat Bolland whose exit was announced last month in an NZX notice.

Then, the company said he would leave on July 31, as part of a wider review of costs being undertaken by the airline.

Bolland joined Air New Zealand in May 2021, helping the airline navigate its recovery from Covid.

Chief executive Greg Foran said Bolland had made a “remarkable contribution” but the economic challenges faced by the airline had led to an extensive review of costs, requiring the company to make some difficult decisions to manage them.

The airline in April downgraded its profit outlook for the financial year by up to $50m.

In February it announced it expected earnings before tax in the range of $200m to $240m.

But since providing that guidance, the airline has continued to see softening in revenue conditions over the fourth quarter both domestically and on the North American market.

Domestic performance has seen ongoing softening, with challenging economic conditions and ongoing cost-of-living pressures.

North American performance continues to be impacted by very competitive pricing pressures, as the market adjusts to the significant capacity added into the New Zealand market by US carriers.

It told the NZX in April that these softer revenue conditions are expected to result in lower underlying profitability for the 2024 financial year of approximately $40m to $50m.

When the pandemic hit in 2020 the airline axed jobs of about a third of its 12,000-strong workforce as it battled for survival. Most of those were in frontline roles but as the demand for air travel quickly recovered, the airline went on a hiring drive, returning numbers to near pre-Covid levels.

Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.