1500 jobs to go in Air NZ's big trim

By CHRIS DANIELS and MARTIN JOHNSTON

Air New Zealand will cut 1500 jobs in a cost-cutting scheme aimed at saving $245 million a year.

The job losses may include about 300 compulsory redundancies.

The airline's four-year business strategy, announced yesterday, also shakes up the airline's management - taking chief operating officer Andrew Miller as its highest-ranking casualty - and promises benefits for passengers.

Chief executive Ralph Norris said savings would come from all areas as the airline became more efficient and used new technology.

But the job losses would be mainly in the corporate and administrative areas, rather than in the "front office", which included pilots and cabin crew.

"Engineering operations will not be affected by this," he said.

Air New Zealand's 10,000-strong workforce will be cut by 15 per cent over the next four years.

The majority of the staff losses will come through attrition. At least 10 per cent of employees resign or retire each year.

Around the world, airlines have sacked thousands of workers as they struggle to survive, especially after the terrorist atrocities in the United States two years ago.

Mr Norris said last night: "The board and I are committed to ensuring that there are minimal redundancies over the next four years.

"A figure of around 300 would possibly be close to the mark, but it may be that there are no redundancies."

Since being bailed out by the Government last year when it was facing bankruptcy, Air NZ has brought itself back from the brink.

Last financial year it made a profit of $220 million.

Mr Norris and airline management have consistently said this return is too small, as aviation profits can quickly swing to losses.

Yesterday, Mr Norris said greater use would be made of computer technology, including electronic ticketing and electronic data transfers between airlines.

"Also, we have a lot of complicated processes that have built up in the business over the years.

"We are endeavouring to improve passenger experience by making check-in processes quicker and simpler."

Other changes included improved internet booking, improved frequency of flights, faster boarding, better border processing on international flights, "better recognition of loyalty" and new in-flight offerings.

New staff uniforms are also being introduced.

Mr Norris is known in the business community from his previous job as chief executive of ASB Bank as a keen advocate of using technology to make businesses cheaper and simpler to run.

Engineering, Printing and Manufacturing Union national secretary Andrew Little said yesterday that the union's 2500 Air New Zealand members - who include clerical staff - would be trying to reconcile the job cuts with the two-year wage freeze they had accepted for the good of the company.

"I think a lot of people are going to feel somewhat betrayed by this.

"There will inevitably be some compulsory redundancies. My hunch is that it will be quite a significant number."

The airline's new management structure introduces less grand and complicated titles.

Mr Miller left after his chief operating officer job was scrapped and he did not win a new one.

He was appointed in May last year and was viewed as the second in command and successor to Mr Norris.

But Craig Sinclair, the former chief executive of the state-owned enterprise Airways, joined Air NZ as its technical and operations vice-president in September last year.

Last week, he described himself as the deputy chief executive while giving evidence for the airline at an Employment Court hearing into company plans for staff drug and alcohol testing.

Airline job cuts Since September 11:

Qantas: 1000

Ansett: up to 13,000

Air Canada: 8871

American: 20,000

Continental: 12,000

Delta: 13,000

United: 20,000

US Airways: 11,000

British Airways: at least 10,000

Virgin Atlantic: at least 1200